At Instagram, blue batik running pants go through the ceiling? More and more likes are accumulating under snake-pattern handbags and neon-green teddy-skin jackets? Then users will not have to wait much longer: pants, handbag and jacket will most likely be online in one to two weeks.
That's how young Ultrafast fashion companies like ASOS and Boohoo manage to re-produce trendy pieces and offer them in their online stores. There, where the very young target group aged between 15 and 25 are constantly looking for and buying trends with their smartphones. The business is working: the Ultrafast fashion brands are growing so fast that H & M and Zara are looking old.
The principle of the new super fast companies is simple: even more new trends, even more hastily produced. According to the American consulting company Coresight, the British ultrafast leader ASOS is launching up to 4500 new parts every week. The also British fashion brand Missguided offers about 250 new garments per week, the smaller competitor Boohoo at least about 100.
The growth of the companies has been gigantic for years: Boohoo achieved in the fiscal year 2019 an increase in turnover of 48 percent, the profit increased by 38 percent. ASOS grew last year by 13 percent, but at the same time broke the profit by 68 percent - apparently due to investment in the ASOS platform and, above all, rising purchasing costs, which the company does not seem to completely pass on to customers. For the unlisted Missguided, the Coresight report for the financial year 2017 even indicates an increase in turnover of 75 percent.
For comparison: H & M grew in the fiscal year 2018 only by five percent, with the profit slumped by a quarter. Zara's parent company Inditex only increased by three percent - but with increasing profits.
Morgan Lieberman / Getty Images
YouTuber and model Nikita Dragun at a Missguided event in Hollywood: influencers as trendsetters
But why are the Ultrafast fashion companies so successful? "Because they satisfy the ever growing hunger of the young generation for something new," says Juliane Laufer, Managing Director of Trend Consulting Laufer Fashion Consulting. The fact that especially the boys are no longer satisfied with a winter and a summer collection has reached fast-fashion companies like Zara and H & M decades ago with their collections in a two-week cycle. But now the digital revolution is driving this development even further: "It used to take around one and a half years for a trend to get off the catwalk on the mass market, and today it's immediately copied to the catwalk and distributed in real time via social media," says Laufer.
Influencers and user feedback are also constantly creating new, changing sub-trends. "All in all, the trends have become much faster, but customers know what they want in a timely manner - and they have to produce quickly - but what's in store for them in five months is harder and harder to predict," explains Laufer.
And how do companies like Boohoo, ASOS or Missguided manage to produce so fast - and depend on established fast-fashion veterans like Zara?
The recipe for success of the super fast companies consists mainly of three ingredients:
1. Just do business online
"The fast-fashion companies are fast, but their problem is common: They have shops," says the trade expert Martin Schulte of the management consultancy Oliver Wyman.
In fact, the super fast are pure online retailers. "We're the biggest fashion brand on the planet that never had a store," ASOS boss Nick Beighton once said.
This not only makes the supply chain shorter and faster. But often the new trend parts are already online for sale if they are still on the way from the Chinese factory to the warehouse in Europe. That saves time. Even the parts that have not yet been produced are already offered online by the Ultrafast brands: "They can offer five different flower dresses - and the purchase, click and view rates decide how many they each produce," says Schulte.
The whole business takes place on the Internet, where the companies can act very flexibly and quickly. If a surprising number of users take photos of themselves in T-shirts with Tiger prints, ASOS, Boohoo or Missguided can immediately order blouses, sweaters or bags with the same print - and place them in the online store. Often they are first produced only in small editions - and later the bestseller nachproduziert in some variants. From design to finished product, Missguided only needs a week for these variants, according to Coresight.
imago images / Dean Pictures
Tote Bags by Zara and H & M: Old Leader Against New Attackers
The average ultrafast production cycle from design to finished part is two to four weeks. Zara and H & M are five weeks away, while traditional retailers need six to nine months, according to the Coresight Report.
2. Invest in technology
The young companies are perfecting the supply chain: "The companies take a lot of money to train their suppliers and upgrade their technology - so they can order quickly, for example, by direct data transfer," says management consultant Schulte. And be able to survey and efficiently use inventories such as fabrics and factory utilization. "Today, orders are sometimes still sent out to the factory by fax," Schulte says. And are implemented accordingly slower and sometimes incorrect.
3. Relocate the production back to Europe
Boohoo produces more than half of its goods in the UK, and ASOS produces much of it there. Although the labor costs are higher than in Asia. But the clothes are faster at the customer. And shirts, dresses and jackets do not degenerate into storekeepers, who then only sell for half of the price.
Monica Schipper / Getty Images for boohoo
Singing sisters Ceraadi at a Boohoo show in New York: Satisfying the hunger of the younger generation
Because: "Copies are the biggest plague in the textile industry," says Schulte. Anyone who constantly offers percentages on his goods hardly earns any more money - and, incidentally, is a pity for the brand. "One of the central problems of the German textile industry."
For those parts, which refer ASOS and Co. from Asia, they like to use the plane - even if it is only about 40 Euro sweater.
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The price does not seem to be the deciding factor anyway: ASOS offers basic T-shirts starting at around eight euros, Boohoo starting at ten euros, Missguided starting at 13 euros. Since H & M is cheaper: Almost four to five euros cost there comparable T-shirts. For the now-trend are apparently a few more euros in it.
Even faster growth
And what does that do with the consumption of customers? It grows even faster than before: On average, a person buys 60 percent more clothes today than 15 years ago, but keeps it only half as long as before, as the consulting firm McKinsey has found in a study. One in three young women finds clothes old after wearing them once or twice. And every seventh thinks it's a fashion faux pas when she is photographed twice in the same outfit.
Although the Ultrafast brands also offer first parts made from recycled fibers and organic cotton, they promise sustainability on their websites. But one thing is clear: this business model is geared to even faster clothing consumption. This is at the expense of the environment, because: The more parts, the higher the consumption of dwindling resources such as water, chemicals, energy.
Nevertheless, Trend Consultant Laufer does not want to condemn the new brands one-sidedly: "The traditional fashion companies with their slow production cycles throw away much more unsold goods," she says. "Because the ultra-fast brands know more exactly what customers want - and only produce that." If the parts are then worn only once, the eco-balance could still turn against them.