7 - Fast Fashion

Question 1

make-to-order

Answer 1

produce only the portion of the seasonal offer that has already been sold to retail clients

• high end fashion designers

1. build sample collection
2. present it
3. acquire orders
4. production launch

Question 2

make-to-stock

Answer 2

offer for season is planned on the basis of sales forecasts (faster approach)

• fast fashion

1. sales forecast
2. production planning
3. production launch

Question 3

traditional business model vs fast fashion retailers

Answer 3

traditional:

• design
• manufacturing
• stores
• customers

fashion:

• customers
• stores
• design
• manufacturing

Question 4

fast fashion (vertical) retailers advantages

Answer 4

frequent assortment changes

quick response

fashionable designs at affordable prices

standardized store concepts

higher profitability thanks to vertical integration

Question 5

retailer business model

Answer 5

100% retail, no wholesale

sell-out driven (wholesale is sell-in driven)

Question 6

is fast fashion a retail format?

Answer 6

no, it is a strategy based on:

• shorter product lifecycles
• tight + efficient supply chain allowing for fast turnover

Question 7

difference b/w H&M and Inditex

Answer 7

H&M pursues cost leadership
- value price more than quick lead time + inventory turnover

• able to keep prices low because they employ a subcontracting system dependent on 3rd party suppliers (avoid fixed costs of vertical integration)

Question 8

Inditex’s multi format strategy

Answer 8

organic + external growth

financial, real estate + logistic synergies

focused product development units for each brand

different targets, brands and product categories with the same approach (fast fashion model)

Question 9

Inditex business model

Answer 9

designed for greater flexibility + speed

proximity concept - products are manufactured in their own factories or by suppliers w/ processes integrated with the group

role of European logistics platform is crucial
- external suppliers for fabric and other elements in production

Question 10

niche fast fashion

Answer 10

rise of niche, independent fast fashion brands that operate solely through an e-commerce platform

• social media has driven demand for lesser known labels

Question 11

advantages of niche fast fashion

Answer 11

able to experiment and create more complex garments

enabled by higher price points

small quantities

fashion forward image