Consumer Behavior Concerning Fast Fashion

Consumer Behavior Concerning Fast Fashion

Consumer Behavior Concerning Fast Fashion: A Case Study Analysing

Ecofunomics, Vol 5 – Issue 1, 16th Jan 2023, pp. 37-40

Corresponding Author: Ms. Shreya Roy, Founder, Ecofunomics LLP & Ph.D. Research Scholar, Indian Institute of Foreign Trade, Kolkata

Email Id: Shreya@ecofunomics.com

ABSTRACT

The purpose of this case study is to understand the fashion consumption pattern of rational consumers. This compact case study is a hybrid of different branches of social sciences. We bring in variables to understand the behavioral decisions of a rational consumer behind choosing a fashion-clothing brand. The study utilizes theoretical and empirical analysis to conclude and infer the results.

According to Winter (1971), a competitive firm that makes inefficient decision suffer loss because of poor cost management skills. Manne (1965) and Marris (1964) argued that failure to maximize profits lowers the brand stock value. Hence, brands come up with unique marketing and sales strategies to maximize their profits. We can conclude fast fashion is one such strategy. Our research focuses on emerging fast fashion and vanishing slow and sustainable fashion trends.

In this case study, it is attempted to theoretically model, consumer behavior based on their purchasing power and preferences. The model depicts that a rational consumer prefers the best quality possible at a given price. Our primary data source stated that 70% of the population is unaware that the textile and fashion industry can harm the environment or labor welfare. Further, the primary data collected validate the theoretical results. A rational consumer prefers trendy-fashionable, quality products at affordable prices, along with easy availability.

INTRODUCTION

Since the 1990s, the global economy has witnessed the emergence of throwaway fashion, more commonly known as fast fashion. The changing quotient of the fashion industry has forced producers to create non-biodegradable, low-cost, flexible fashion designs with negative externalities. The fashion market is profoundly competitive. The fashion run designs need to be restocked and refreshed based on season, demographic division, occasion, gender, occupation, and so much more. The increasing number of fashion seasons and reasons led to the emergence of fast fashion. 

The significant features of fast fashion are:

  • a shorter life cycle with higher profit margins
  • low predictability, 
  • high impulse purchase rate, 
  • and high volatility of the market demand. 

The low cost of a product also decreases its quality of the product. Most fast fashion brands produce their products with synthetic, non-biodegradable, petro-chemical textile materials, and so on. Most consumers are unaware that their clothes are of low environmental standards. However, merchandised sellers create marketing strategies and influence customers to frequent their visits to stores. They even trick consumers into believing that their brands are eco-friendly. Such greenwashing techniques are making it difficult for consumers to make responsible consumption decisions.  

The increasing demand in favor of fast fashion can be attributed to the millennial world. The fake lifestyle of the young internet people forces the crowd to desire a higher lifestyle at an affordable price. 

Until the mid-1980s, people believed in standard and basic wardrobe styles such as denim and white shirts. People were indifferent towards fashion, styles, and basic clothing designs. Consumers were less conscious of the cyclical fashion phenomenon. Hence, it was easy for the producers to produce mass-scale garments of high quality and sustainable material. Mass-scale production has a long shelf duration and hence affects the environment less. Unlike fast fashion, they aren’t dumped into the environment. They can be easily recycled or reused. 

Before proceeding further, it is important to quickly differentiate between fast and slow fashion. As mentioned earlier, fast fashions are those clothes or brands that quickly change or upgrade fashion according to the market demand. According to the ZARA report 2006, in the autumn, the market demand for one-shoulder cocktail dresses exploded. However, as soon as the retailers stocked up their store shelves, the demand fell and the dresses moved to the unsold stock. The virgin synthetic materials are then dumped into mother Earth. These materials are non-biodegradable as they are mostly produced by synthetic materials such as polyethylene terephthalate. Such dumping actions have irreversible effects. 

Fast fashion garments are trendy, affordable, and easily available. Apart from the environmental standards, labor welfare standards are also compromised to produce these fashionable pieces. Fast fashion brands are guilty of labor exploitation. Most brands prefer outsourcing their production process to less developed countries like Bangladesh, India, Pakistan, Vietnam so on. Overseas outsourcing is done to seek advantage of cheap unskilled labor resources. Most workers are forced to work in unethical, deteriorating health conditions and low-wage conditions. The women and children are mainly exploited since they are forced to work in the unorganized, informal, and inaccurately reported sector.

Some widely famous fast fashion brands are H&M, Zara, Missguided, Forever 21, Zaful, Boohoo, and Fashion Nova. so on. 

Whereas, slow fashion or more commonly known as sustainable fashion brands has standard designs with medium to high price ranges. Hence, we witness the fading of most sustainable brands. They use eco-friendly materials, have standard wage scales, and are more responsible producers. Some such famous brands are Levi’s, Able, Patagonia, Boden, People Tree so on. 

A rational consumer makes consumption choices based on disposable income, class, society, taste, and preference. To understand such consumption patterns in-depth research and analysis are required. An attempt is made to model such behavioral decisions. 

METHODOLOGY

The case study is divided into two parts:

  1. A theoretical model trying to explain the rational behavior of the consumer’s fashion purchases.
  2. An empirical study to validate the theoretical model. A digital primary survey was conducted to collect data on sustainable consumption. 

THEORETICAL MODEL: Consumer Behavior

Every theoretical model needs some pillar assumptions:

  1. A rational consumer has the willingness to pay equal to or less than his disposable income.
  2. A rational consumer prefers the highest quality of a product at a given price.
  3. A consumer will not purchase a brand if his net consumer surplus falls below zero.

Let there be two brands in the market:

  1. Fast Fashion with low-quality Ɵ1 – with price P1
  2. Sustainable/Slow Fashion with high-quality Ɵ2 – with price P2

Where the quality and price of the sustainable brand are higher than that of the fast fashion brand. Ɵ1 << Ɵ2 and P1 << P2

                                    Ɵi U(qi), Pi          – utility function on purchasing Ɵi = 1,2 brand

Utility Function =    

                                    0                      – utility = 0 when quantity purchased is = 0

……………. (1)

A consumer will purchase a brand only if he derives a positive utility. A positive utility can be derived only if the consumer surplus is positive.

Let, Di be the disposable income, where i is the individual count running from 1, 2, 3, ……n.

Di = Ii – Ti                                                                                                       ……………. (2)

Disposable income is a function of personal income minus taxes. We assume that the consumer spends all income purchasing either commodity with quality Ɵ1 or Ɵ2.

Di – Pi ≥ 0                                                                                                        ……………. (3)

Equation number (3) is the required condition for a rational consumer to purchase a commodity.

We can rewrite equation (3) below

Di – P1 ≥ 0                                                                                                       ……………. (3a)

or Di – P2 ≥ 0                                                                                                   ……………. (3b)

Now, let us assume that the ℷ fraction of the population cannot afford P2, i.e., they belong to the low-income group.

Hence,

Di – P1 ≥ 0 is true but Di – P2 ≥ 0 is not true. Hence, due to budget constraints, they are forced to consume fast fashion brands.

Therefore, further stating that 1-ℷ fraction of the population can afford P2, i.e., they belong to the high-income group.

Hence, Di – P1 ≥ 0 is true, and so is Di – P2 ≥ 0. Hence, they have the liberty to choose between fast fashion and sustainable fashion. Just for simplicity, let us assume that 1-ℷ fraction of the population opts for sustainable fashion.

The conscious choice will only be impactful on the earth if,

ℷ [Di – P1 ≥ 0] < (1-ℷ) [Di – P2 ≥ 0]                                                                 ……………. (4)

Equation (4) can only hold if the high-income group is conscious about their consumption. The reality is that most of the population is unaware of fast fashion and its negative impact on the environment. As per the digital primary survey conducted, 60.6% of the sample population was unaware of fast fashion. They were uninformed that textiles or clothing in general could affect the environment at all.

EMPIRICAL STUDY: Consumer Behavior

QuestionsOptionsResults
Did you know about Fast Fashion and its harmful effectsYes39.40%
No60.60%
Age GroupBelow 1502.00%
15-3085.00%
30-4505.90%
45-6006.80%
Above 6000.20%
OccupationStudent63.10%
Part-Time job08.60%
Full-time employed/Business20.80%
Not a student but dependent07.60%
Expenditure on one outfit0-50005.10%
500-100027.60%
1000-300041.62%
3000-500015.90%
More than 500010.00%
How often do you purchase clothing items?Weekly02.40%
Monthly24.40%
Quarter Yearly47.40%
Half Yearly18.60%
Annually07.10%
Do you spend more than usual on special occasions such as birthdays and festivals?Yes73.00%
No27.00%
Would you change your fashion brand to save the EarthYes56.00%
No17.00%
Maybe if I know more about the negative impacts39.90%
[Table 1] Sample Size: Total number of responses collected – 509

As per data collected only 10% of the sample population spend more than INR 5000 on 1 outfit, stating only 50 out of 500 consume sustainable brands. Henceforward, 90% of the population sample purchase from fast fashion brands regularly.

Due to the low price and changing fashion trends, the economy witnessed the overconsumption of fast fashion brands which are ultimately dumped in the environment. As per the data collected, 2% of the sample population purchase clothing items weekly, 24% consume monthly, and 48% of them consume quarterly i.e., once every 3 months. The remaining sample population consumes garments half-yearly (19%) and annually (7%). The overconsumption of garments and fashion brands is evident even in table 1 too. Apart from regular apparel brand consumption, 73% of the sample population consume additional units during special occasions such as anniversaries and festivals.

Diagram 1: Apparel decision pattern of a rational consumer

As per the primary survey, 48.5% of the sample population prefer outfits based on the quality of the product, 39% of the sample population favor affordability, and 37.5% choose apparel based on current and ongoing fashion trends. Only 14.7% of the sample population choose garments based on their easy availability.  And, 11.5% are uncertain about their garment choices since they do not buy their clothes. The above data can further be represented better using a Venn Diagram.

consumer surplus
Diagram 2: Apparel decision pattern of a rational

As represented in the Venn diagram 2, 22% of the sample, demand quality products, 15% desire trendy-fashionable clothes, and 13% look for affordability. 10.5% of the sample population desire a combination of trendy, quality clothes at affordable prices. 6% of the sample population choose clothes and garments based on easy availability. And only 1.9% of the sample population prefer trendy, quality clothes at affordable prices and easily available.

Diagram 3: Consumer preference

As pictured in diagram 3, 76.3% of the sample population prefer national brands (Indian brands), 45% prefer footpath or local brands, and 24.2% prefer international brands. The international brands are imported with special import taxes hence, it becomes beyond the purchasing capability of general consumers. Hence, only 24.2% of the sample population prefers international brands. Whereas, most consumers prefer national brands and footpath-local brands due to low prices and easy availability of fashionable-trendy clothes.

consumer behavior
Diagram 4: Consumer’s preference (Venn Diagram)

The national and international fashion market has a good blend of fast and slow fashion brands. Hence, using the current data, a true percentage of fast-fashion consumers cannot be probed. However, we can clearly state that 17.6% of the pure footpath-local brand consumers consume fast fashion entirely. The intersection of footpaths and national brands i.e., 19.80% of the population also falls under the low-income group. Hence, most probably they also consume fast-fashion products. However, statements beyond this cannot be made due to a lack of data. 

REMEDIES

The fashion industry emits more carbon than an aviation company. The textile and clothing industry is estimated to produce 1.7 billion tons of carbon emissions annually. Therefore, it is essential to take some preventive steps to accelerate sustainable development. A few remedial steps and policies can be adopted and implemented. 

  • Consumer: A capsule wardrobe is a fashion style known for its sustainable and minimalistic use of outfits. The term was first used in American publications in the early 1940s. It denotes a small collection of basic items of clothing intended to be styled differently to create different outfits. It includes purchasing classic, quality basics that can be styled and reused for long durations.  Consumer education is necessary, and curbing overconsumption is the key. 
  • Producer: Vertical product differentiation can be adopted and served to the market. Transparent and true product information should be given to the consumers. This will help them make proper decisions based on their requirements and purchasing capacity. As Say’s Law states, ‘supply creates its own demand’. Vertical product differentiation will help a firm to attract high and low-brand consumers (Ɵ1, Ɵ2). When both quality products are served to the consumer, a responsible consumer can make consumption based on his taste & preference, and purchasing power parity. 
  • Government: There are plenty of measures and policies that can be adopted and implemented by the Government or the authority to help sustainable consumption.
    • Negative Externality Tax: Fast fashion has a negative externality on society which can be corrected using a negative externality tax such as the Pigouvian tax. The tax will raise the social cost (private cost + external cost). Hence, it will help to either curb the demand or pay for the negative impact it is leaving on the environment.
    • Production standards: Under this method, the Government can apply a legal limit on how many units a firm can produce. Production beyond that is illegal. 
    • Tradable permits: Each production house should have legal permits to produce its products. If a firm isn’t using all of its permits it can trade them with other firms. This reduces over dumping since overproduction is prohibited. 

CONCLUSION

The millennial lifestyle is attracting young viewers and thus creating demand in favor of fast fashion. The desire to live an elite lifestyle at an affordable price makes us believe fast fashion is a concept that is here to stay. Most consumers are unaware of the harmful effects fast fashion can have on the environment and labor welfare. Hence, consumer education on this topic is essential. According to the primary survey, 96% of the sample population is ready to make fashion changes and shift to sustainable brands if the appropriate information is available. 

A study looking at the consumer side of the industry isn’t enough. Research exploring the production side is also necessary to curb the problem. Government measures to internalize the negative externality will further help the incumbent to make proper amendments from the start. The contemporary world needs to adopt the 3 R for sustainable consumption:

  • Reduce overconsumption of fast fashion
  • Reuse sustainable brands
  • Recycle instead of dumping apparel. 
Ms. Shreya Roy
Ms. Shreya Roy

Ms. Roy is the Director and Founder at Ecofunomics LLP. She is an economist by profession and currently a Ph.D. research scholar at the Indian Institute of Foreign Trade She is a lover of art and a philanthropist by heart.

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