The fashion industry is a very competitive industry which is saturated by numerous retailers. Most of these retailers provide similar products, a factor which increases competition in the fashion industry. Another source of competition in the industry is created by the various brands which allow retailers to sell their apparels in their stores. Customers in the industry and the market have a high bargaining power and can, therefore, be easily be swayed by competition (Atlasian, 2010). Consumers in the fashion industry look for the most popular, high quality, and recent brands in the industry. Most of the consumers believe that there is a direct association between high pricing and high quality.
Mass production is associated with the term fast fashion. The strategy is associated with affordable prices and relies heavily on mass communication to market the products. The fashion industry also relies on celebrities, and endorsements as useful strategies which are commonly used to gain a competitive advantage in the industry (Atlasian, 2010). An endorsement is a promotional tool which uses celebrities or athletes to market products in the fashion industry.
Demand is greatly influenced by the expectations of the consumers. Occupational status and prestige also determine these expectations. The culture of the user dictates both the supply and demand in the fashion industry (Atlasian, 2010). Production, on the other hand, influences the price levels. Mass production is associated with fast fashion eventually, results in reasonably affordable prices.
In the highly competitive fashion industry, revenue is determined by the degree of mass production of trendy designs. Incomes in the fashion industry are driven by the need for acceptance in the society which is associated with people's consumption of fashionable products and services. Consumers use the price level as an indicator of quality in the fashion industry (Atlasian, 2010). Price is also determined by the demand by consumers for the products as well as the amount of supply from the producers of the product.
Products in the fashion industry are characterized by a very short product life. Changes in fashion trends influence production in the fashion industry. The fashion industry is influenced by the popular culture, such as celebrities. The fashion industry is largely based on production. Production is what keeps the fashion industry going (Atlasian, 2010).
Retailers in the fashion industry are at times forced to incur losses so that they can attract a larger market niche. The strategy which is known is predatory pricing involves a company selling products at a price below the cost of production so that they can push away the competition (Atlasian, 2010).
Copyrighting is a leading legal issue in the fashion industry. Counterfeiting of products is illegal and can lead to legal consequences for those found guilty of the act. Ethical issues are also other areas of concern in the industry. Animal rights are often violated when animals are used for their fur, which is utilized in the manufacture of fashionable products (Atlasian, 2010). The fashion industry has also used immigrants as a source of cheap labor. Countries such as the United States have come up with the Immigrant Act to protect these workers from exploitation. Production has been associated for a long time with the wrong treatment of garment workers in the fashion industry. Garment workers are exposed to harmful conditions during the manufacture of cotton.
The future of the fashion industry lies in E-commerce. The fashion industry needs to embrace new media to conduct their business processes such as production, distribution, and marketing. The Internet offers a platform where retailers in the fashion industry can gain access to cheap and large volumes of advertising (Atlasian, 2010). Online shopping and marketing enable consumers to gain easy access to fashionable products.
References
Atlasian. (2010, May 11). Economic Analysis of Fashion Retail. Retrieved from Atlassian: https://wiki.nus.edu.sg/display/Fashion/Economic+Analyisis+of+Fashion+Retail
