Not so Top of the Shops
Five years ago, going shopping was a fun and carefree task, with the only limiting factors being bank balance and arm space. Fast-forward to today and the high street is an ever-struggling place, with ethical and environmental concerns halting many purchasers buying what they once did.
Have Consumer Habits Changed During the Pandemic?
The harsh reality of fashion came into light throughout the pandemic. Retailers (such as ARCADIA) pulled out of their supplier contracts, resulting in a $6bn shortfall for Asian garment workers. Following this came the revelation that Boohoo, a company backed by ESG funds, underpaid their Leicester factory workers, many of whom were working in sub-standard conditions. However, is this news really affecting how consumers shop?
The answer seems to be no. Boohoo’s profits have soared despite these allegations, up 28-32%, compared to their forecast of 25% for this year. It seems that, for the majority of consumers, the appeal of fast fashion outweighs any ethical concerns that they may have. Consumers may be unaware of these concerns, or unable to afford clothes elsewhere. I would argue that these are only minor factors: it is instead the ease of online shopping and the social-media bubble surrounding Boohoo plc that has spurred its success.
The Demise of Topshop
Topshop (part of the ARCADIA group) was one of the most influential retailers on social media in 2017, but its declining sales and profits had already begun, leading it to file for bankruptcy last week. Topshop’s demise originated from its late entry to the e-commerce party, focussing instead on physical stores. This allowed new retailers (such as ASOS and Boohoo) to take a large market share, meaning when Topshop did enter e-commerce, the market was already saturated with new players. Where Topshop was once alone in its affordable high fashion offerings, the new e-commerce retailers offered high fashion for lower prices with fast delivery. Hence, consumers quickly chose the more convenient option.
Many who are passionate about the environment will hail the fall of ARCADIA as the beginning of a sustainability shift. I argue that it is anything but: consumers are instead favouring cheaper clothes which can be bought in “bulk” and are worn only a few times. This reflects a step back for fashion: according to the sustainability app “Good on you,” which ranks retailers on their environmental and ethical initiatives, Topshop has a 2/5 rating, whilst Boohoo has a 1/5 rating. Topshop was by no means a sustainable retailer, but was it better than its current alternatives? Alternatives that continue to grow and continue to profit.
The fall of Topshop also leaves 13,000 individuals facing redundancy. With the high street declining like never seen before, many individuals will struggle to find jobs within their current market. The shift to e-commerce will leave many needing re-skilling and potential government support.
Those who seek to rid the world of any fast fashion need to consolidate their aims. Removing more major retailers, such as Zara and ASOS, will equate to further mass unemployment both in the U.K. and in the countries that produce the garments. If these retailers instead decided to increase their prices, as a result of higher ethical and environmental standards, then consumers would shop elsewhere. This relating to the simple supply and demand curve.
Retailers have already taken steps in this direction – with Boohoo producing a fashion line made of 95% recycled materials. However, items are still listed for extremely low prices, with one skirt being offered for only £3. This encourages a throw-away culture and begs the question: How can all the costs (transport, labour, materials, packaging etc) be reflected at this price point? Until consumers decide to buy higher value items less frequently, companies are not pushed to make any tangible changes.
The fashion industry, the second largest polluter after oil, needs to rethink its offerings in order to captivate customers in the long term. The e-commerce fast fashion market is fuelled on high volume, low turnover items, that contribute to low wages and high pollution. Customers current priority is price and speed, as evident in Boohoo’s profits. But in time priorities will shift, and retailers need to ensure they are ahead of the game, or another Topshop-like demise may be on the cards.