Paul Marchant, Stefan Persson, Amanico Ortega and Tadashi Yanai. Whilst these names may be unfamiliar to you there’s a strong chance your closet inhabits at least one of their wares. Primark, H&M, Zara and Uniqulo are among the world’s most popular high street brands. They are places where you can purchase an entire outfit from head to toe for less than £150 and yet, the contrast between the countless bargains offered and the combined net worth of these fast fashion fat cats is astounding. Data from a recent article by Quartz puts the estimated combined net worth of these CEOs at over $130 billion.
What can we attribute to the success of these high street giants? Psychology points towards the Scarcity principal. Fundamental to economic theory is the idea that scarcity is directly related to supply and demand (Polanski, 2008). Dr. Robert Cialdini argues that the appearance of an item being ‘low in stock’ is a powerfully persuasive tool that increases the likelihood of us making a purchase. Perhaps something to think about the next time you’re trawling through ‘Last Chance to Buy’ racks.
Vicki Cantrell, SVP of community and executive director of Shop.org told Quartz that social media plays a crucial role in the popularity of fast fashion retailers. Cantrell says “Consumers see their own images everywhere, and often don’t want to be seen in the same outfit over and over.” It is certainly true FOBSITSOT (Fear Of Being Seen In The Same Outfit Twice) is heightened by social media, where the pressure to portray oneself as affluent, adventurous and unique is palpable.
Whether or not fast fashion retailers can maintain this momentum is somewhat of an uncertainty. They’ve managed to stave off damming exposes pertaining to the unsafe and inhumane conditions of their factories whilst also maintaining profits in the wake of the Sustainable Fashion movement. Research points towards an unlikely source that could potentially hold the fall of the fast fashion industry at its fingertips– consumer returns.
"fast fashion retailers may suffer from the association between impulse buying and product returns."
We have all been in a situation where we have ventured outside of our homes with little to no intention of spending money. However, drawn by the seemingly illogical low cost of an item we make a purchase, patting ourselves on the back for successfully finding a bargain. It’s only when we go home and try it on we realise that we made less of a shrewd financial decision and more of an incredibly poor fashion choice. Soon after, we mutter the 5 words that keep people like Marchant and co. up at night ‘I need to return this’.
According to Which? Consumer Rights shops aren’t required by law to accept returns on goods which are not faulty. Despite this, you’ll be hard pressed to find a fast fashion retailer that doesn’t offer free returns (American Apparel aside). In a recent study, researchers Sasikarn Chatvijit Cook and Jennifer Yurchisin argue that fast fashion retailers may suffer from the association between impulse buying and product returns.
However, when it comes to returns Buyer’s Remorse is the lesser of several evils. Writing for Inbound Logistics, Lisa Terry outlines that when it comes to returns, retailers have to deal with damaged, unwanted, spoiled as well as counterfeit merchandise. Between 2013 and 2014 the US National Retail Federation Fraud Survey saw a 20% increase in the amount of fraudulent returns a figure which studies have shown doesn’t seem to be decreasing any time soon. So what can retailers do? Cook and Yurchisin (2016) suggest that retailers should restrict returns to compensate for these losses but will they lose consumers in the process?
What do you think, can returns really bring about fast fashions downfall?
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