Profit

Sienna Vost-Worthy ⋅ 23rd October 2023

Profit is undeniably the most vital of the four pillars within the fashion industry, whilst there is emphasis on creativity and artistic expression, commerce and financial gain are the key elements in ensuring a brands survival within such a competitive environment. Profit determines the economic success of a fashion brand and can act as a driving force of motivation for them to remain competitive within such a saturated industry. The fashion industry holds enormous economic power due to them being one of the largest economies in the world, ‘if it were ranked alongside individual countries GDP in the global fashion industry would represent the seventh largest economy in the world’ (McKinsey and Company,2016). Consequently, it is essential for brands to establish innovative, differentiated content in order to stand out within the current climate of the contemporary fashion world.

As of 2022, the global apparel market was calculated to have generated $1.5 trillion in revenue, forecasted to increase to more than $1.7 trillion by 2023 (Statista,2023). One prominent sector within the industry, due to the influential rise of gen z consumers, is the second-hand apparel market, forecasted to grow due to the high demands for more sustainable and environmentally conscious options. Due to the current unpredictable state of the economy amid the geopolitical concerns and hyperinflation, consumers behaviours are changing and brands must adapt to their new demands. Consequently, this has led to a significant decrease in consumer spending, pushing shoppers to choose lower end expense options such as Vinted and H&M. However, the luxury fashion sector remains the highest performing sector as consumers are investing in high quality, sustainable pieces. The luxury sector is forecasted to grow between 5 and 10 percent in 2023, outperforming the rest of the industry (McKinsey and Company, 2022), as customers are less affected by the economic uncertainties therefore, spending habits will remain more consistent.

Due to such uncertainties within our economic climate, it is crucial for brands to remain competitive through innovative and progressive marketing strategies that aim to target a new group of consumers. To demonstrate this, ‘brands must question their traditional marketing strategies and define a marketing mix for their new audience’ (Kapferer, 2012). For example, if a brands target audience is gen z the use of social media marketing campaigns are essential in capturing their attention. For brands to ensure they are remaining competitive, they must demonstrate creative and innovative strategies which can be seen through the combining of art and commerce. One prominent example of how creative directors have bridged the gap between creativity and commerce is Karl Lagerfeld’s work at Chanel and Fendi. After 50 years as creative director, to commemorate Lagerfeld the Karlito fur toy was released, creating a wide trend of furry bag accessories which are still popular today. During his esteemed time at Chanel, Lagerfeld was openly shown as the face of the brand and is renowned for the most impressive installations, including the re creation of a supermarket at his autumn/winter 2014 show (Mitterfellner, 2023).