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6/4/2020  
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How Fast Fashion Works?

Fast fashion

The fast-fashion business model starts with a two-pronged value proposition - to be both fashionable and affordable - which forces other companies to have to compete on both price and product freshness. Víctor Martínez de Albéniz, writing with Felipe Caro in the latest issue of IESE Insight magazine identify the operational keys underpinning the fast-fashion model.
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The fast-fashion business model starts with a two-pronged value proposition - to be both fashionable and affordable - which forces other companies to have to compete on both price and product freshness.

This value proposition is supported by two operational pillars: Quick Response (QR) production, and dynamic assortment planning with frequent assortment changes.

Yet, as the authors point out, constantly changing inventory has its drawbacks. Critics argue that it encourages waste, and the drive to keep costs down can lead to exploitative labor conditions in low-cost countries where the products are being made. For this reason, the authors stress that the fast-fashion model needs to be grounded in sound people, community and production practices in order for it to be sustainable.

The authors apply the fast-fashion model to other non-fashion businesses, suggesting how keeping your product line fresh, minimizing excess inventory and optimizing the scheduling of new releases can work just as well in convenience stores and restaurants, smartphone updates, and digital content delivery for books, music, movies and other forms of entertainment.

"Whatever you do, make sure your model is built on strong, sustainable grounds that prioritize people and communities," the authors advise.

Víctor Martínez de Albéniz and Felipe Caro elaborate further in a chapter on this subject to be published in Retail Supply Chain Management: Quantitative Models and Empirical Studies (New York: Springer, 2014).

In recent weeks, IESE’s J.L. Nueno also cited Zara’s parent company Inditex as a business model worth studying. “The essence of the Inditex model is to push the moment of production as close as possible to the moment of sale,” he told the Financial Times in a piece on the lessons of fast fashion for business leaders.

IESE Insight is a quarterly research-based magazine, published in separate English and Spanish editions. Its premium content is linked to articles from the IESE Insight knowledge portal, which contains research and teaching materials, opinion articles, business indices, audiovisual materials and an extensive database of more than 20,000 scholarly references.

Source: IESE


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