Fast Fashion Feedback and Imitation of Fashion Trends

Introduction:

"Fast fashion" means fast feedback and imitation of fashion trends, originating in Europe in the middle of the last century. Nowadays, as fast fashion becomes more and more popular, "fast fashion" is gradually transformed into a fashion company. Fashion design responds quickly to the store with a low price, which is also the sales model of mainstream consumers today. Spain's ZARA is the forerunner of the "fast fashion" revolution and the world's largest apparel supplier, belonging to the INDITEX Group. INDITEX started from a small factory until now became one of the world's largest fashion retailers, with eight brands, the most famous of the eight brands is ZARA. From INDITEX's annual report (2016), INDITEX currently operates 96 markets (49 of which are online) across five continents and has more than 7,000 stores, more than 171,000 employees and works with 1,805 suppliers and 6,959 factories worldwide. As a successful company in fast fashion, this essay analyzes INDITEX's strategy and discusses the reasons why it is more competitive than other similar brands. As the apparel industry, especially fast fashion, has a negative impact on the environment, economy and society, INDITEX has been forced to pay more attention to social responsibility in the last several years and invested 40 million Euros to support social projects worldwide. This paper will use secondary research and data to analyze why INDITEX integrates corporate social responsibility into strategy to make it more competitive and successful in the fast-fashion industry.

Literature Review：

According to Buck (2017), INDITEX Group's profit increased by 18% as Zara's sales soared. However, in the same market, Felsted (2017) analyzed through data that HM's sales dropped significantly in recent ten years. These data show that INDITEX has become a leader in the highly competitive fast fashion industry and INDITEX's success is based on a unique business model - innovation and flexibility combined with fashion (Eriksson and Jonsson 2011). Eriksson and Jonsson (2011) also analyzed the business model and strategy behind INDITEX's success. Castellano (2002) stated that the key to INDITEX's business model being more competitive than its competitors is vertical integration of design, timely systems, delivery speed, retail methods, low inventory rules, fast feedback on fashion, advanced information technology and timely response Customer demand.

From INDITEX's annual report (2016), it has been found that in recent years, the company's strategy has paid more attention to CSR (Corporate Social Responsibility). The company priorities are the protection of the environment and human rights, through focusing on traceability and transparency. INDITEX was one of the companies who were held loudly and publically accountable for their fast-fashion practices following the Rana Plaza disaster in 2013 (Taplin, 2014). INDITEX’s 2014 Annual Reports states that following the disaster, they signed a security agreement accord in May 2013, to protect workers and prevent another disaster such as this happening again. Interestingly, whilst brands such as INDITEX have been forced to up their game on social responsibility in recent years, luxury fashion brands, who have not traditionally associated themselves with concerns about the environment or human rights and wellness in the supply chain, have managed to avoid the same criticisms  (Janssen et al., 2014), they suggested that this has much to do with how customers perceive luxury fashion in comparison with fast fashion, who assume that the price of a product in an indication of how responsibly it was created.

Corporate Social Responsibility refers to the voluntary activities organized by the company to further make things beyond the interests of the company and what the law requires for social benefits. (McWilliams and Siegel, 2001). When customers understand their CSR activities, customers will positively evaluate them (Marin et al., 2008). Consumer perceptions of corporate CSR activities will infiltrate their perceptions of the company's performance in other areas (Smith et al., 2010) and can even protect the company from negative influence. The negative impact of the incident or crisis (Klein and Dawar, 2004). The use of low-cost raw materials by the fast-fashion industry causes environmental pollution, which reduces the image of fast fashion (Ro and Kim, 2009). In addition, fast fashion means fast and convenient fashion. It exists in a similar way to fast food, sometimes called “disposable fashion”, because these garments are made by cheap raw materials that lead to low sustainable use. (Choi et al., 2010). Other consumers are also concerned about the social problems brought about by the fast fashion industry, especially the problem of cheap labor and labor rights (Shaw et al., 2006). Most fashion industry laborers are made up of women and children. These vulnerable groups can only obtain lower wages under long-term work. (Ichimura, 2011).

According to Hollender (2004) research show that consumers are more willing to actively support companies that are socially responsible, and this is reflected in the targeted enhancement of strategic responsibility for corporate social responsibility. Solving social expectations is an important factor in the success of competition (Hirschland 2005). In the current environment, all companies are being affected by social problems. Porter and Kramer (2006) believe that CSR perhaps the main reason for success of competition, especially in the garment industry. The INDITEX Group has outlined a series of strategic actions in its 2016 environmental plan, including ecologically efficient design of stores, reducing environmental impacts on logistics activities, and environmentally friendly products (INDITEX 2016).

Methodology / Approach:

In this essay, I am using secondary data from current commercial economics theory to analyze and explain INDITEX's strategies. Since most of theories are based on concepts, it is inevitable that I will use some of my own experience and knowledge to explain the collected research data. Regarding data analysis, since it is a research and analysis of the company INDITEX, much data comes from INDITEX's annual report and its own official website.

In addition, the theoretical analysis will be based on academic articles from Eriksson and Jonsson (2011). The empirical analysis will be based on academic articles INDITEX official page and even some non-academic articles such as news. Through the analysis of different article data, I can perform an in-depth study of INDITEX's strategy.

Due to the nature of this research problem, it was not felt necessary to do any primary research in this area, and I have focused solely on secondary data.

Discussion:

As a successful fast fashion company, INDITEX's strategy combines corporate social responsibility to make them more competitive. In addition, according to Janssen et al (2014) show that corporate social responsibility may not affect the attitude of consumers when purchasing luxury goods, because luxury goods tend to emphasize the values ​​of consumer hedonism mainly with its scarcity, durability and price, so the ethical factors have little impact on consumers purchase decision. Following the research, this essay will focus on fast fashion and discuss whether applying corporate social responsibility to company strategy in the fast fashion industry will make it have advantages competitive.