Blog 3 – Profit
The fashion industry is driven by profit. Without profit, redeveloping existing goods, research and development on new products would be impossible. The industry employs a workforce approximately above 300 million people (EllenMacArthur Foundation, 2017) can be concluded that the industry is costly to maintain. In the United Kingdom, a fashion designer typically earns £29,921 a year (U.S. BUREAU OF LABOR STATISTICS 2023). The fashion industry has grown gradually undergoing 4 industrial revolutions (IR). Mechanization (1st IR), mass production (2nd IR), and digitalization and automatic production (3rd IR) and now in the 4th revolution when technologies and innovative business models are able to aid hyper-personalization and environmental sustainability (Byoungho Ellie Jin & Daeun Chloe Shin 2021), it has become clear the industry will continue to expand.
For both branded and non-branded businesses. Demand based pricing is applied. The method focuses on customers and their responsiveness to different price levels (Brassington and Pettitt 2006). They are prices based on the customer’s demand for a product so prices are set with demand and market considerations in mind (Lancaster and Withey 2005; Holbrook, 1994) This means the price will be set in line with the customer‘s perception of the product or it will be priced too high or too low for the target market. (Farese, Kimbrell and Woloszyk 2003) Another way of gaining profit is by building a clear image of the brand, like advertising an eco-friendly concept. Over twenty global brands have committed to detoxing, more than half a million people have signed up to join the campaign (Domenica Peterson 2015 ) demonstrates famous brands that are being sponsored as they seem more reliable and people are willing to pay for what they think is truly environmentally friendly.(International Journal of Research in Management, Science & Technology 2014)
Under uncertain economic times like the covid-19 pandemic, offline clothing consumption at mass markets has decreased, whereas sales of luxury fashion brands at offline department stores have grown. Study in Korea’s fashion industry shows an increase in online sales from 64.418 trillion KRW to 78.269 trillion KRW (Wonbae Pang et.al. 2021). Therefore having a loyal customer base online is beneficial as consumers are more likely to buy from a well known brand with global approval and recognition. In order to accomplish a deeper understanding of consumer’s demands, big data analytics is used to acknowledge consumer trend forecasting, consumer experience and consumer engagement (Madsen et al., 2020). Consumer sales data collected from real retailers can provide firms with greater insights into their target markets than their competitors (Erevelles et al., 2016)
Moreover, brands need to continuously find new creative ways to freshen their merchandise and brand image by including promotions, gift cards and vouchers that would draw consumers and build connections. A study conducted by the international Journal of Business and Social Science (2016) portrays purchase rates for promoted products for free samplings being 40% higher. This tool is very effective to stimulate individual behavior towards purchasing decisions and it can encourage consumers to switch from planned to promoted brand.
——————————————————————————————————————————————————————
Reference Citation =
(Domenica Peterson 2015 )Social Media as a Tool for Social Change
(Byoungho Ellie Jin & Daeun Chloe Shin 2021)The power of the 4th industrial revolution in the fashion industry: what, why, and how has the industry changed?
(EllenMacArthur Foundation, 2017) Beyond plastic waste
U.S. BUREAU OF LABOR STATISTICS (2023)
International Journal of Research in Management, Science & Technology (2014) A Review of The Effect of Pricing Strategies on The Purchase of Consumer Goods (Brassington and Pettitt 2006) (Lancaster and Withey 2005; Holbrook, 1994)((Farese, Kimbrell and Woloszk 2003))
(Wonbae Pang, Jisu Ko, Sang Jin Kim, Eunju Ko Asia Pacific Journal of Marketing and Logistics 2021 ) Impact of COVID-19 pandemic upon fashion consumer behavior: focus on mass and luxury products
Madsen, D.Ø., Silva, E.S. and Hassani, H. (2020), “The application of big data in fashion retailing: a narrative review”, International Journal of Management Concepts and Philosophy, Vol. 13 No. 4, pp. 247-274.
Erevelles, S., Fukawa, N. and Swayne, L. (2016), “Big data consumer analytics and the transformation of marketing”, Journal of Business Research, Vol. 69 No. 2, pp. 897-904.
(International Journal of Business and Social Science 2016) The Impact of Promotional Tools on Consumer Buying Behavior in Retail Market