PROFIT

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INTRODUCTION –

Profit is money gained after providing a service or product, the difference between cost and production service (Cambridge Dictionary, c2022). In a capitalist society, profit has a direct impact on the economy. There are different understandings of how profit should be measured (Nelson, 1967). Numerically speaking, the fashion industry is predicted to be worth $1.7 trillion and £60.1 billion in the UK (Radonic, 2022).

FASHION INDUSTRY SIZE –

Until 2019, the industry’s economic profit was increasing by 4% yearly. However, since Covid-19 it fell by 93% in 2020 (McKinser & Company, 2021). The fashion industry is considered the 7th largest economy in the world, and by 2022 ecommerce is predicted to make $5.5 trillion in sales (FashionUnited, c2022). It is difficult to measure the industry size, social media now plays a role in facilitating connections and businesses have a larger reach to the public (Hethorn and Ulasewicz, 2021).

(Fig 1)

PERFORMANCE BY SECTORS –

  • Textiles: 85% of the materials used in the industry are polyester and cotton, yet the biggest suppliers are facing poverty (Sovacool, 2019).
  • Manufacturing: decrease in manufacturing impacted global production, consumption and employment (Chakraborty and Biswas, 2020)
  • Retail: all UK sales dropped by 2% in 2020 since Covid-19, but the drop of in store sales pushed forward online sales (Khaliq, 2021)
  • Marketing: Covid-19 evoked new strategies making of the sector specialised in e-tailing (Chan et al, 2022)
(Fig 2)

REMAINING COMPETITIVE –

Some techniques to remain competitive in uncertain times, as experienced with Covid-19:

  • Focus on existing customers: it is harder to get new customers than to maintain existing ones, care for them is important. 
  • Make use of new platforms: keeping up with social is crucial to not be forgotten and attract new potential customers.
  • Build a strategy: analysing consumer behaviour will make clear what marketing techniques should be used in each case.

(Clausen, 2020)

CREATIVITY AND COMMERCE –

Creative directors manage a brands marketing, they understand and bridge the business and consumer perspective (Prospects, c2022). Consumers have an idea of worth for creativity; businesses must be able to match this and consider profit (Crock, 2017).  Bourdieu describes art and commerce are extreme opposites, freedom vs control (Stevenson, 2019). Using celebrities to represent a brand has many benefits as consumers want to look like them, they associate positive traits of celebrities with the products and are more likely to develop loyalty to a brand (Mitterfellner, 2019). Additionally, fashion runways allow designers and consumers to connect. As artwork is promoted so elaborately, brands are able to improve brand image and the value customers accord them (KIFT, c2020).

(Fig 3)

REFERENCES:

Chakraborty, S. and Biswas, M. C. 2020. Impact of COVID-19 on the Textile, Apparel and Fashion Manufacturing Industry Supply Chain: Case Study on a Ready-Made Garment Manufacturing Industry. Journal of Supply Chain Management, Logistics and Procurement. 3(2), pp. 1-19

Chan, H. Kwok, Y. and Wong, S. 2022. [Pre-print]. Marketing and Operational Strategies During the COVID-19 Pandemic: A Case Study of a Hong Kong Footwear Enterprise. Journal of Fashion Marketing. 

Clausen, E. 2020. Marketing Rules To Follow During Uncertain Economic Times. [Online]. [Accessed 23/10/2022]. Available from: https://www.forbes.com/sites/forbesagencycouncil/2020/04/03/marketing-rules-to-follow-during-uncertain-economic-times/?sh=3bb951b04a36

Crook, J. D. S. 2017. Compelling Fashion Business: Bridging The Divide Between Creative Vision And Commercial Reality. [Online]. [Accessed 23/10/2022]. Available from: https://www.arts.ac.uk/colleges/london-college-of-fashion/stories/compelling-fashion-business-bridging-the-divide-between-creative-vision-and-commercial-reality

Fashion United. Global Fashion Industry Statistics. [Online]. [Accessed 19/10/2022]. Available from: https://fashionunited.com/global-fashion-industry-statistics

Hethorn, J. and Ulasewicz, C. 2021. Sustainable Fashion What’s Next?: A Conversation about Issues, Practices and Possibilities. London, UK: Fairchild Books

Khaliq, M. 2021. Impact of the Coronavirus (COVID-19) Pandemic on Retail Sales in 2020. Office for National Statistics. pp. 1-14

KIFT. c2022. How Fashion Shows Influencing the Fashion Market. [Online]. [Accessed 19/10/2022]. Available from: https://kiftfashioncollege.com/fashion-shows/

McKinsey & Company. 2021. Fashion Industry’s Profits Hemmed in by the COVID-19 Pandemic. [Online]. [Accessed 18/10/2022]. Available from: https://www.mckinsey.com/featured-insights/coronavirus-leading-through-the-crisis/charting-the-path-to-the-next-normal/fashion-industrys-profits-hemmed-in-by-the-covid-19-pandemic

Mitterfellner, O. 2019. Fashion Marketing and Communication: Theory and Practice Across the Fashion Industry. Oxon, UK: Routeledge

Prospects. c2022. Job Profile: Creative Director. [Online]. [Accessed 17/10/2022]. Available from: https://www.prospects.ac.uk/job-profiles/creative-director

Sovacool, B. K. 2019. The Precarious Political Economy of Colbalt: Balancing Prosperity, Poverty, and Brutality in Artisanal and Industrial Mining in the Democratic Republic of the Congo. The Extractive Industries and Society. 6(3), pp. 915-939.

Steele, V. 2022. Fashion Industry. [Online]. [Accessed 19/10/2022]. Available from: https://www.britannica.com/art/fashion-industry

Stevenson, C. 2019. (I Was There) When it All Went Down. Vestoj.9

Stevenson, H. W. and Nelson, J. R. 1967. Profits in the Modern Economy: Selected Paper From a Conference on Understanding Profits. Minnesota, USA: University of Minnesota Press

IMAGE REFERENCES:

Fig. 1: McKinsey & Company. 2021. The global fashion industrys profit is expected to fall by 93 percent in 2020.[Online]. [Accessed 23/10/2022]. Available from: https://www.mckinsey.com/featured-insights/coronavirus-leading-through-the-crisis/charting-the-path-to-the-next-normal/fashion-industrys-profits-hemmed-in-by-the-covid-19-pandemic

Fig. 2: Office for National Statistics. 2021. Comparison of types of sales in 2020. [Online]. [Accessed 23/10/2022]. Available from: https://www.ons.gov.uk/economy/grossdomesticproductgdp/articles/impactofthecoronaviruscovid19pandemiconretailsalesin2020/2021-01-28

Fig. 3: Vogue. c2022. Vogue runway. [Online]. [Accessed 21/10/2022]. Available from: https://www.vogue.com/fashion-shows

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