A

RESEARCH PROPOSAL

ON

FAST FASHION CHANGE

BY

GAURAV GOMEZ

YAMINI SHAMI NATIONAL INSTITUTE OF FASHION TECHNOLOGY,

GANDHINAGAR

PROBLEM STATEMENT

Fluctuation in customer mood due to more insecurity in terms of social image and

decrease in validation of any event has led to increase in buying tendency of varied

products, frequently.

The prolonged instability in the world economy has taken its toll on the

Branded Apparel market. Slowing economic growth, reduction in household

wealth, falling consumer confidence, frugal discretionary spending patterns, and

shifting consumer demand to value for money bargains have all eroded sales growth

over the last 5 years(-0.5% CAGR domestically and 1.4% CAGR overall). The decline

in consumer spending has also battered down retailers’ operating margins. With

consumers changing to lower price points, cheaper private label brands have been

offering tough competition to premium brands.

Moreover fierce competition, with little brand loyalty, low barriers to entry,

constant pricing pressure from competitors and a critical need to be fashion-right

turn to be one of the main investment negatives for the branded apparel industry.

Entrance of new brands easily at lower price limits,

Threat of substitutes, Highly competitive ecommerce format, Increase in

competitors rivalry, challenge in effective pricing in development and distribution of

products, decrease in product quantity per style; restricts the fast changing brands,

to increase their products price for fast changing fashion.

RESEARCH OBJECTIVE

To study the fast changing fashion and suggest how brand should implement the

fast changing fashion method to increase the life span of brand maturity.

HYPOTHESIS

Ho –Customers are not ready to accept Fast changing fashion.

LITERATURE REVIEW

APPAREL RETAIL INDUSTRY

The apparel retail industry consists of the sale of all menswear, womens wear and

childrens wear. The menswear market includes mens activewear, casual wear,

essentials, formalwear, formalwear-occasion and outerwear. The womens wear market

includes women's active wear, casual wear, essentials, formalwear, formalwear-

occasion and outerwear. The childrens wear market includes baby clothing, boys

activewear, boys casual wear, boys essentials, boys formalwear, boys formalwear-

occasion, boys outerwear, girls active wear, girls casual wear, girls essentials, girls

formalwear-occasion, girls outerwear and toddler clothing.

The global apparel retail industry had total revenue of $1,031.5 billion in 2009,

representing a compound annual growth rate (CAGR) of 3.1% for the period spanning

2005-2009. In comparison, the European and Asia-Pacific industries grew with CAGRs

of 1.7% and 4% respectively, over the same period, to reach respective values of $384.2

billion and $262.8 billion in 2009.

Sales of womens wear proved the most lucrative for the global apparel retail industry in

2009, with total revenues of $534.4 billion, equivalent to 51.8% of the market's overall

value. In comparison, sales of menswear generated revenues of $335.6 billion in 2009,

equating to 32.5% of the industry’s aggregate revenues.

The performance of the industry is forecast to decelerate, with an anticipated CAGR of

2.4% for the five year period 2009-2014, which is expected to drive the industry to a

value of $1,162.8 billion by the end of 2014. Comparatively, the European and Asia-

Pacific industries will grow with CAGRs of 1.7% and 3.2% respectively, over the same

period, to reach respective values of $417.5 billion and $307.2 billion in 2014.

Fluctuation of customer moods and desire to buy and wear, more variable products has

led to fast changing fashion need of the hour.

BRANDED APPAREL INDUSTRY

The branded apparel industry has benefited from demographic shifts and changes in

consumer preferences over time due to globalization and a rise in brand awareness.

With fashion emerging as a means of self-expression, consumers are increasingly

choosing apparel with brand images or logos over private label. The United States

represents the world’s largest branded apparel market having an estimated share of

29.26%2, followed by Europe and Asia. However, growth in emerging markets such as

Asia-Pacific is very encouraging for the branded apparel industry.

Companies compete on the following key points: timeliness of fashions, trendiness,

breadth of merchandise, brand recognition, pricing, quality, and overall shopping

experience and environment. Despite some potential for companies to create

competitive advantages, the industry has relatively low barriers to entry and is

highly competitive.

Buyers in this market vary in size from the international department stores to the

individual retail customer. Due to the majority of sales coming from the company retail

stores the large department stores have very little power over the branded apparel

players. Their sales contributions are not large enough to have a significant impact on

the players’ annual sales. The individual retail customer has very little financial power

compared to any branded apparel player. However, individual customers are prone to

switching due to the many undifferentiated products offered by players and low costs

involved (difficult to maintain brand loyalty). The sheer number of consumers in the

market decreases the impact from consumer switching to make the power arguably

evenly split between apparel retailers and consumers. Therefore, these two different

buyer types – department stores and individual retail customers - experience similar

levels of buying power.

Due to the nature of the end product and inexpensive shipping costs, suppliers are

sourced from around the globe. The large number of suppliers available then weakens

their power. Players in this industry also make it their strategy to have no more than

10% of their manufacturing coming from any one supplier in order to decrease the

suppliers’ power even more.

The threat of substitutes is high as large national department stores are much larger

than any player in the industry (ex. Macy’s has $26.4 billion in 2011 sales compared

to the largest player’s, The Gap, $11.3 billion domestic sales). Also, discount retailers

and supercenters like Wal-Mart pose a threat to the industry, especially during

economic recessions when consumers have less disposable income. Finally, foreign

branded apparel firms (H&M, ZARA, etc.) pose a threat US branded apparel firm both

in store and online sales.

Potential new entrants to the branded apparel industry face very low barriers.

Requirements include an apparel manufacturing partner and a retail store with sales

staff. Even the retail store is becoming increasingly less important. Many people have

noticed the increased sales being generated by players’ direct-to-consumer

operations and new players are beginning to enter the market using online.

The high fragmentation of the industry leads to increased competitor rivalry. The

seasonality of the business is another reason for increased rivalry as players are

fighting for customers during short periods of time throughout the year. As many

apparel products lack major differentiation between competitors, price becomes an

increasingly important factor.

This fierce competition, with little brand loyalty, low barriers to entry, constant

pricing pressure from competitors and a critical need to be fashion-right turn to be one

of the main investment negatives for the US branded apparel industry. Having strong

brand equity enables a retailer to price merchandise higher than commoditized

retailers who compete solely on price. The coverage universe does not offer the lowest

price points, but it attempts to “value price” its goods, offering solid-quality, trend-right

merchandise with a desirable brand name

CURRENT SCENARIO

Customers have become more conscious about their public image and are more socially

active. This has led to increase in buying frequency of a product, thereby decreasing the

product lifecycle.

Emergence of the new brands via e commerce has drastically increase, as lees

investment is needed for the start-up. Thereby decreasing the market share of other

brands.

Globalization has also increased the pressure of the brands to satisfy the customer

locally, at effective and efficient time. Moreover increase in cost of procurement and

development of product and at the same time effective cost competition from other

brands burdened the brands in getting better profit margin.

Thus, the brands maturity stage period has reduced and they are finding it difficult to

sustain in this competitive environment.

ZARA BRAND OVERVIEW

Vertical Integration of a brand from design to the product availability at store is

required to reduce the inventory time and cope up with the fast changing fashion.

Zara, is one which initially introduced this method, and have become the fashion leader

in terms of sales and youth choice. Zara’s clothing is uniquely positioned to serve this

segment of the market because of its fast paced fashion ideas, its latest technology, its

efficient business strategies and its affordable prices.

Unusually for a clothes retailer, Zara designs all its own clothes, makes most of them in

Spain and distributes all of them itself. And many observers attribute Zara's success to

this control of the business from factory to shop floor.

Inditex with its brand Zara has targeted a wide gap in the retail market. The company

targets customers that are interested in high fashion want to be up to speed with the

latest fashion trends but are not able to afford clothes and accessories from the couture

and high end boutiques. In order to target the market, Zara strategy launches its outlets

in high profile locations and provides customers with a turnover time of 4-5 weeks for

its new collections made available at a fraction of the couture cost. This, along with the

brand persona, the collection of the clothes and accessories and the marketing

campaigns pulls the target markets to the Zara stores.

Other than Zara , H&M is also adopting the fast fashion change, with retail format stores.

Competition in the fashion industry has always been tough. H&M Hennes & Mauritz ,

has always been Zara competitor in this industry. H&M has been in business since 1947,

while Zara started business in 1975. Experience can play a big role in business, but

strategy has been the edge of Zara to gain competitive advantage in the business. Zara

has gone against the conventional strategy where other company dare not pursue. The

strategy of Zara is unconventional, other companies in fashion retail uses a different

strategy. Zara’s strategy works in making the products of the company more anticipated

by the customers. The strategy also gives the company the full responsibility in

managing all the business processes; form designing, to production, to shipment, etc.

This allows the company to focus on each process, making each process vital.

RESEARCH DESIGN

Type of research

Descriptive – Qualitative Research.

Since fast fashion change concept has been introduced in the market, and is adopted by

major brands like Zara, H&M; our research proposal is of descriptive in nature as we

will study the fast fashion change concept, why this concept is the new fashion trend

and moreover inspite of being the fashion trend still most of the major brands till date

has not introduced it.

From this study we have to inference out that if customers satisfaction has increased by

the introduce of fast fashion and whether they are awaiting the other brands to also

introduce the same. We would also track the brand perception towards fast fashion

change, whether it is the new future of apparel industry and if so what major reasons

are there that are restricting them to adopt this method.

So it will be Qualitative in nature

Research Instrument

Questionnaire with the customers and Interview with the managers.

Contact Method

Physical & Online Survey, from the customers

Online Survey, Physical & Telephonic Interview with the Brand Managers & Forecasters.

Population

Demographic Segmentation

1. Age

Teenagers between 18 – 24 years

2. Gender

Female

3. Type

Students and young working professionals.

Geographic Segmentation

Tier I cities – Cities which are fast pacing and multi cultural and youth centric.

Tier I cities are Kolkata, Chennai, Delhi, Hyderabad, Bangalore, Mumbai, Pune,

Ahmedabad.

World Population – 7.2 Billion

India Population – 1.27 Billion

India Female Population – 614.4 Million(940 females per 1000

males)

India Female Population (18 to 24 yrs) – 232 Million

Tier I City Population – 131.1 Million

Tier I Female Population – 63 Million

Tier I Female Population (18-24 yrs) – 23.86 Million

Ahmedabad Population - 8.4 Million

Ahmedabad Female Population – 4.1 Million

Ahmedabad Female Population (18 – 24 yrs)– 1.4 Million

SAMPLING TECHNIQUE

Non Probability Convenience Technique

Since the listing of people is not there, and we are taking random group of

female people aged between 18 – 24 years.

SURVEY ON FAST FASHION CHANGE

We, the students of NIFT Gandhinagar are conducting a research on the FAST FASHION

CHANGE and want you to be part of our research. Your answers are very valuable for us

and will help us a great deal in our study. So, we request you to fill up the following

short survey that would not take you more than 2-3 minutes.

Fast Fashion change is the immediate arrival of the product that the customer desire to

be in the store.

* Required

SECTION A

PERSONAL INFORMATION

1. You are *Ms.

2. Occupation*

3. Age *

SECTION B

1. How often do you buy branded fashion apparel product?

Twice in a month

Once in a month

Once in a two month

More than two months

Uncertain

2. What is the quantity of garment per purchase?

1-3

3-6

More than 6

3. How much would you spend on branded fashion apparel per visit to a store ?

1500-3000 Rs

3000-4500 Rs

4500-6000 Rs

6000-7500Rs

More than 7500 Rs

4. Which Retail format do you prefer to buy the branded fashion apparel products?

MBO (Multiple Brand Outlet)

EBO (Exclusive Brand Outlet)

Online

Others. Please specify

Are you aware of fast fashion change in fashion apparel sector?

Yes

No

If yes please then go to Section C

SECTION C

What do you mean by fast fashion change in fashion apparel sector?(You may select

more than one option

Varied Apparel Products available at the store

Change of style and products frequently at the store

Same type of Products available at varied price range

Other, Please specify

According to you which brand follows FAST FASHION CHANGE ?

Zara

H&M

Others

7. Please mark whether you agree--disagree with the following statements based on

how you feel.

Strongly

Agree

Agree Uncertain Disagree Strongly

Disagree

Due to fast fashion change my

buying frequency for branded

apparel has increased

Fast fashion change has

increased my product & brand

satisfaction

Fast Fashion change is the

need of the hour for the

brands to keep continuously

fulfilling customer needs

According to you what are the reasons for adopting the fast fashion change?

Social need

Culture diversity

Fashion conscious

Boredom

Status symbol

Other, Please specify

8. Do you prefer to buy for the same brand for most of the time ?

Yes

No

If Yes,

“My needs most of the time gets fulfilled by the brand.”

Strongly disagree Disagree Uncertain Agree Strongly Agree

(1) (2) (3) (4) (5)

If No,

A) How often do you shift preference of your brand ?

Monthly

Quarterly

Half yearly

Yearly

Uncertain

B) What would be the reasons for shift of brand preference over another? (rank

accordingly)

E-commerce

New brand entrance

Fast fashion change

Decrease in product life cycle

Boredom with the same brand

Easy multiple options availability

Varied price range

10. Would you prefer and accept FAST FASHION CHANGE brands over other brands that

have not adopted this concept?

Yes

No

11. What do you think would be the reason that inspite of Fast Fashion Change a hit

in the market most brands till date are not following it ?

Unawareness

Cost effectiveness

Strategical & business challenge

Doesnt create any difference for them

No Idea

Others, Please specify

SURVEY ON FAST FASHION CHANGE(for brand managers)

We, the students of NIFT Gandhinagar are conducting a research on the FAST FASHION

CHANGE and want you to be part of our research. Your answers are very valuable for us

and will help us a great deal in our study. So, we request you to fill up the following

short survey that would not take you more than 2-3 minutes.

* Required

SECTION A

PERSONAL INFORMATION

1. Company Name* :

2. Designation* :

3. E-mail Id :

4. Contact No. :

SECTION B

1. Are you aware of the concept of FAST FASHION CHANGE ?

Yes

No

2. What is your opinion regarding the statement- “For a brand , its compulsory to adopt

FAST FASHION CHANGE for the survival or sustainance in the market” ?

Strongly disagree Disagree Uncertain Agree Strongly Agree

(1) (2) (3) (4) (5)

3. Are the brands following FAST FASHION CHANGE fulfilling the customer needs or

desires comparatively in a better way ?

Yes

No

4. What do you think would be the major reason that inspite of FAST FASHION CHANGE

a hit in the market most brands till date are not following it ?

Cost effectiveness

Strategical challenge

Vendor management

Central distribution management

5. Do you think FAST FASHION CHANGE is the next future trend of the market ?

Yes

No

If No,

What could be the possible new trends if any,

6. Do you think life span of a brand maturity has decreased over the period ?

Strongly disagree Disagree Uncertain Agree Strongly Agree

(1) (2) (3) (4) (5)

What would be the possible reasons for the decrease in life span of a brand maturity?

E-commerce

New brand entrance

Fast fashion change

Decrease in product life cycle

Boredom with the constant brand

Easy multiple options availability

Varied price range

Others, please specify……………………………….

What a brand should do to adopt fast fashion change as their business model?

Vendor management Inventory

Central distribution management

Vertical Integration

Technological Advancement

Proper Communication among different departments at varied location.

Quick forecasting and response time

SAMPLE SIZE CALCUILATION

CONFIDENCE LEVEL, z = 95% = 1.96 VARIABILITY, p = 0.5 (MAXIMUM)PRECESION LEVEL, e = 5% = 0.05FORMULA: (z*z)*(p*p)/ (e*e) = (1.96*1.96)* (0.5*0.5)/ (0.05*0.05) = 384Therefore sample size is 384

HYPOTHESIS QUANTIFICATION

H = Customers are not ready to accept fast fashion change.P H = 0.47 (According to pilot testing) PHo < 0.47