The title is the classic phrase that mothers (and especially our grandmothers) often repeated after we arrived home with some “bargain” when a few days later, it broke or shrunk three sizes after the first wash.
I know, when the experts are classifying and boxing everything, they call this use-it-and-pitch-it fashion phenomenon “Pret a Tirer”, but I don’t know if it is really a matter of loss of interest in quality, or rather it’s a consequency of an old, unprofitable fashion industry that’s become obsessed with ever higher profit margins and ever lower costs in order to survive.
In these days of low sales and nervousness due to lots of inventory and the inevitable mark downs, it is time to search for the culprit for this situation. And climate change takes the prize, being the evil of all evils. Something is clearly ridiculous, since for at least 10 or 12 years, we have been seeing less autumn and spring, less cold and rain, and winters that start and finish later and summers that end almost at Christmas.
In addition to climate change, there are clear signs that indicate the end of the traditional fashion retail model and the beginning of the consolidation of new actors and business models.
New global companies are appearing, with much lighter structures and with a much wider offerings in terms of variety and price ranges. In these new companies, metrics such as sales per square meter sound like symbols of past eras.
The arrival of these new companies, together with the effort of the traditional companies to not be left out of the game, is creating an unprecedented saturation of supply.
We all offer practically the same products at very similar (and low) prices, and in the end, the end customer feels overwhelmed and saturated with the flood of newsletters and daily offers.
Faced with this situation, traditional retailers have few tools left. One of them is to improve profitability: the search for lower production costs which generate purchase margins as high as possible to counteract the effects of the inevitable discounts and gain profitability for online intermediaries (which are in continuous decline, since everyday they offer more of their own product).
This “desperate” search for low costs has consequences.
In many companies (especially in listed companies), the search for profitability becomes similar to an addict’s need for drugs. Just like in this example, it usually ends badly.
The traditional fashion retail model is finished. We no longer need to have physical stores on every corner. Now we do not know what to do with them since there are just too many of them. The customer wants larger stores that have the same offerings as they can find online. The customer goes window-shopping online and (maybe, if you’re lucky) they might buy off-line.
This old retail model had very high associated fixed costs that today make their models much less competitive than the models that were born online. They’ve matured to have physical stores that sell brand experiences more than the products themselves.
On the other hand, the improvement of costs is not infinite. There comes a time when, all materials and copositions being equal (understanding that costs are optimized), the only way to improve costs is labor. And if you are socially responsible (that is, if you are minimally ethical and human) ther are limits.
To relocate, looking for areas with cheap labor has consequences: lack of control of working and health conditions, political instability, remoteness and loss of flexibility, etc.
Once labor costs are improved as much as “humanly” possible, the only tools wer have left are: planning purchases in periods of low production, buying more in advance, with the consequent assumption of risks of lower quality.
That is, by apparently improving production costs, perhaps we can lose flexibility and gain rigidity, or perhaps we lose quality in materials and clothing with the consequent damage to the brand’s reputation.
All businesses have, as my teacher Muñoz Seca del Iese said, a burning passion that defines them and gives them their reason for being. Some offer fashion at the best price, others fast fashion with very flexible structures to go at the speed of trends, others have exclusivity and luxury, etc.
These signs of identity that made your business different, that were your raison d’être, should never be forgotten since they can carry you one step further and help you when you can only differentiate yourself in price.