Profit
A company’s profit is very important to allow them to expand and develop. To achieve profit, they must be aware of new customers, retarget people who have shown interest and reward the loyalty of those who’ve bought from the brand. The market size of the fashion industry currently stands at $861.5bn and this is expected to grow by 4.3% in 2022 an increase from the usual figure of 1.7% per annum. (www.ibisworld.com. (n.d.). IBISWorld – Industry Market Research, Reports, and Statistics).
Different sectors of the industry perform at different levels, for example, the top 20% of fashion players created 100% of economic profit whereas the bottom 20% went backwards by 18%. When looking closer at only the top 20 companies it was found they accounted for 97% of profits. (McKinsey & Company. (2017). The two faces of fashion-industry performance.) Showing that the fashion industry is highly competitive for profits and to gain customers. Influencer marketing has become a huge part of companies’ profits recently.
When something is seen on an influencer on social media platforms it encourages viewers to buy it. This is due to them having an association with the influencer and is heightened when they have an associating factor with the influencer such as age or gender. Although the older generation has the largest amount of disposable income, the younger generation is keener to spend. A bloomburg report in 2021 has revealed that Gen Z currently has $360 billion in disposable income.(Santora, J. (2021). 25 Mind Blowing Stats on Gen Z Spending Habits. [online] Influencer Marketing Hub.)
In order to remain competitive, it’s important for brands to create loyalty from their existing clients and not lose them to competitors. In times of recession such as Covid-19 it’s important to maintain marketing and check in with clients in order to keep their business. This worked effectively throughout the pandemic by brands sending our emails to check on their customers as well as just the latest updates. The idea of art and commerce is best bridged through fashion shows. This is shown in couture fashion shows and an example of this is Balenciaga’s SS23 show. Models walked through thick mud and all guests were sprayed with the scent of mud which remained on them for a couple days in order to remind them of the show. Because it was so unusual it was talked about a lot on social media, bringing more revenue towards the brand.