Global sourcing has stuffed fashion – globally

Like all good things, global sourcing was a seductive morsel that led to a kind of economic gluttony that has had huge ramifications. Most of them for the worse.

While the idea of sourcing at a lower cost than a business could make themselves on paper looks like an obvious endeavour to exploit, taken to the level that has now occurred, the only sustainable benefits have been achieved by the owners of the factories and supply chain providers to which production and distribution has been outsourced.

Global fashion for the mass market has denigrated to the lowest common denominator. “Disposable fashion” is no longer an option but pretty much all you can buy at mass market and has led to the destruction of quality, embellishment, differentiation and true innovation.

The fashion industry – globally – is caught in a deflationary cycle of its own making, producing an endlessly recycled ‘play-book’ of looks from mass-produced fabrics, made to standard blocks and production techniques in order to hit buy-sell prices and margins that are creating nothing but increasing volumes and decreasing profits.

On top of that, the customers are bored.

Even Zara – arguably the master of ‘cheap chic’ disposable fashion – has dulled its armoury. Once upon a time, Zara made its goods in Spain – when Spain was a country that had a low labour cost. Thanks to European equalisation laws, Spain’s minimum wage compliance destroyed that advantage. Zara now produces most of its products outside the European Union in cheap labour zones like China and Vietnam. As a result, both quality and an important part of the DNA of the product have evaporated leaving scale and stock turn as its primary weapons. But Zara is lucky that it still sustains those two weapons.

For those without the armoury of global reach and massive scale, the allure of global sourcing has left them exposed as peddlers of the ‘emperor’s new clothes’. Forced to choose the same fabrics, the same trends, the same blocks and the same factories, the outcome is (you guessed it)…sameness.

Fashion is about design and look. Without new ideas, individual personality and real choice every season it becomes functional at best. Functional fashion is not what excites customers to spend up. Instead they shop down. And ‘bagging bargains’ favours the few who have and can maintain scale advantage. Everybody else needs to seduce customers to buy with something they can’t get everywhere else. The current cycle of formulaic trend to factory source will not survive the next decade without massive casualties.

And don’t blame the customer. That is a cop-out. Time for the fashion industry – outside the scale monsters – to rediscover how to design again. How to create original looks. How to invest in monetising quality. How to find a manufacturing advantage outside pure cost. How to create real differentiation and real integrity.

That – and only that – will save the fashion industry from the massive failure that global sourcing is going to deliver.

Peter James Ryan is a retail expert and head of Red Communication in Sydney, Australia. +61 2 9481 7215 or [email protected].

* This story first appeared on sister site, Inside Retail Australia.

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