Is E-Commerce Becoming The Primary Business Model For Fast Fashion Retailers?

Fashion distributors and businesses tend to use various techniques to strengthen their position in the global market. By opening retail stores and manufacturing units worldwide, they are able to target consumers in various geographical locations, making their names known and their products visible. 

However, engaging in this method alone is simply no longer feasible now. Considering that over 2.14 billion people globally are now making their purchases online,  fast fashion retailers should reconsider their traditional methods and look into a different approach in expanding their brands, such as e-commerce. With the current global crisis that forced consumers to  shop online and accelerated advancements in technology, e-commerce has become a more feasible and reliable business model for fast fashion retailers. Here’s why:

E-commerce is Rapidly Growing

The restrictions brought about by the COVID-19 pandemic pushed consumers to engage in online transactions. During the onset of the pandemic in 2020, e-commerce transactions increased by 77% compared to the previous year, a rate that would have taken four to six years to accomplish pre-pandemic. With this surge in online purchases, it is evident that current e-commerce transaction trends are paving the way for fast fashion retailers to go digital.

By 2021, the global market value of fast fashion industries reached as high as $795.5 billion, making it the number one e-commerce sector in the world. Over the next five years, a 7.18% compound annual growth rate will put the industry’s value at about $1.0 trillion. 

It has a Far and Wide Impact

E-commerce adoption allows fashion distributors to reach and accommodate customers better. According to a study conducted by Salesforce, 87% of shoppers begin product searches on digital channels, while 71% say they use their mobile device for shopping.

As more customers use their devices for shopping and searching products online, they are likely to come across e-commerce stores of fast fashion distributors, where no geographical borders apply. This allows customers in any part of the world to make a purchase through a single click on the website.

Aside from that, retailers can also make use of different online channels to reach their audiences, such as through social media advertising. This widens their demographics, allowing them to generate more leads, so that even when customers are not actively searching for fast fashion products, they may nevertheless still come across brands as they browse their social media timelines.

Indeed, the more customers are informed about a particular fashion brand, the more likely they are to visit their e-store and make a purchase. This is the advantage that e-commerce has over the traditional brick-and-mortar business model.

The Future of Fast Fashion Retailers in E-Commerce

By the end of 2022, the worldwide e-commerce revenue for the fashion and apparel industry is expected to reach $712.9 billion. This means that customers will continue to engage in online purchasing amidst the growing access to smartphones and other handheld devices, and the technological advancements in online e-commerce platforms, such as AI-enabled shopping. With studies showing that the COVID-19 crisis triggered online shopping behaviors to have lasting effects, e-commerce has become the most ideal primary business model for fast fashion distributors.