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, formalwearoccasion and outerwear. The childrens wear market includes baby clothing, boys activewear, boys casual wear, boys essentials, boys formalwear, boys formalwearoccasion, 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 industrys 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 AsiaPacific 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 worlds 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. Macys has $26.4 billion in 2011 sales compared to the largest players, 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. Zaras 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. Zaras 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 India Population India Female Population males) India Female Population (18 to 24 yrs) Tier I City Population Tier I Female Population Tier I Female Population (18-24 yrs) Ahmedabad Population Ahmedabad Female Population

7.2 Billion 1.27 Billion 614.4 Million(940 females per 1000 232 Million 131.1 Million 63 Million 23.86 Million 8.4 Million 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 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 Agree Uncertain Disagree Strongly Disagree

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 (1) 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 Disagree Uncertain (2) (3) Agree (4) Strongly Agree (5)

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 (1) Disagree Uncertain (2) (3) Agree Strongly Agree (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 (1) Disagree Uncertain (2) (3) Agree Strongly Agree (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% = 0.05 FORMULA: (z*z)*(p*p)/ (e*e) = (1.96*1.96)* (0.5*0.5)/ (0.05*0.05) = 384 Therefore 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