The Value of Fast Fashion: Quick Response, Enhanced Design, and Strategic Consumer Behavior

Abstract

A fast fashion system combines quick response production capabilities with enhanced product design capabilities, to both design "hot" products that capture the latest consumer trends and exploit minimal production leadtimes to match supply with uncertain demand. We develop a model of such a system, and compare its performance to three alternative systems: quick response-only systems, enhanced design-only systems, and traditional systems (which lack both enhanced design and quick response capabilities). In particular, we focus on the impact of each of the four systems on "strategic" or forward-looking customer purchasing behavior, i.e., the intentional delay in purchasing an item at the full price to obtain it during an end-ofseason clearance. We …nd that enhanced design helps to mitigate strategic behavior by o¤ering consumers a product they value more, making them less willing to risk waiting for a clearance sale and possibly experiencing a stock-out. Quick response mitigates strategic behavior through a di¤erent mechanism: by better matching supply to demand, it reduces the chance of a clearance sale. Most importantly, we …nd that while it is possible for quick response and enhanced design to be either complements or substitutes, the complementarity e¤ect tends to dominate. Hence, when both quick response and enhanced design are combined in a fast fashion system, the …rm typically enjoys a greater incremental increase in pro…t than the sum of the increases resulting from employing either system in isolation, roughly by a factor of two in our numerical experiments. Furthermore, complementarity is strongest when customers are very strategic. We conclude that fast fashion systems can be of signi…cant value, particularly when consumers exhibit strategic behavior.

Fashion Conscious Consumers, Fast Fashion and the Impact of Social Media on Purchase Intention

“…In the last 5 years due to changes in consumer level of knowledge and awareness, a new approach has focused on a new type of consumer: Strategic consumer (Cachon & Swinney, 2009)). Strategic consumer buyer behaviour theory assumes that the constantly varying demands of consumers like waiting for price reduction and the changes in lifestyle have fuelled the process of renovation and more affordable prices in the fashion industry (Cachon & Swinney, 2011) Fashion conscious consumers can be also defined as strategic consumers as they are early fashion adopters. Having more interest in fashion, they search for more fashion-related information, shop more often, and try more new fashion items than others (Iver & Eastman, 2010) It should be understood that fashion involvement is an influential driver in the consumer's fashion adoption process.…”

An Empirical Research on Marketing Strategies of Different Risk Preference Merchant

“…This research assumes that the merchant can enhance forecast accuracy in an uncertain market by collecting market information. For example, some literature has assumed that lead-time reduction can help enhance the forecast accuracy in an uncertain demand market [4][5][6][26][27][28]. First, Chen and Chuang pointed out the relationships between the purchasing time and the time variance of uncertain demand and embedded the time-variant variance of demand into the classical newsvendor problem by considering the purchasing time and order quantity as a decision variable [26].…”

Service Quality Expectation and Cultural Diversity in Fast Fashion Retailing

“…Secondly, products are regarded as trendy and affordable universally [2]. Fast fashion companies minimized costs in manufacturing, labor and logistic in order to offer a reasonable retail price to customers.…”

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