Impact of Sustainable Fashion and Online Retail on the Fashion Retail Industry

Inquiry Based
Learning

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY .................................................................................................................................3
Background ............................................................................................................................3
Application of market analysis frameworks ..........................................................................5
Primary Research....................................................................................................................8
CONCLUSION ............................................................................................................................10
REFRENCES ................................................................................................................................11

INTRODUCTION
The fashion retail industry is one of the fastest growing industry and the market trends of
the industry faces constant changes. The company selected for this report is the Swedish fashion
retail firm H&M. The company is one of the leading members of the global fashion retail
industry with strong presence in 74 international markets and effective structure for online
retailing. Current market trends of the fashion retail industry are analysed in this report which
impact daily operations of the respective company. In addition to this analysis of H&M is
conducted in this report with the usage of suitable market analysis models such as PESTEL
analysis, Porter's Five forces and SWOT analysis.
MAIN BODY
Background
Sustainable Fashion
Greenhouse gas emission of the global fashion industry contribute to 10% of the global
emulsions. Mass consumption of fashion products which is propelled by fast fashion houses
which produce low quality products that are meant to be consumed in short time period. This
trend of the fashion retail industry focuses on creating and distributing fashion retail goods such
as shoes, accessories and clothing in ways which minimise environmental harm by reducing
greenhouse emission of the retail. Both socio-economic and environmental aspects of the
product are considered in order to maximise sustainability of the products. This aim of
organisation who follow this trend is to create clothing which is not disposable and can be
sustained for a long time period. Consumers in British retail sector are willing to pay more for
sustainable pieces of clothing because of increasing concern about environmental impact of
fashion purchase. This has forced the fashion retail industry to adopt sustainable practices as it
affects the overall sales of the company. Increasing circular thinking which revolves around
utilisation of recycled material is step taken by H&M (7 Major Sustainable Fashion Trends To
Propel The Industry Forward In 2021, 2021). The company is collaborating with Green Machine
to recycle cotton and polyester blends on a global scale to meet their circular targets and attain
sustainability. Stella McCartney which is a British luxury fashion brand has continuously
advocated for sustainable fashion. The firm focuses on developing new materials which reduce

environmental harm such as fur free fur and using innovative processes that do not exploit
natural resources which increases their sustainability.
Impact of Online retailers on fashion retail industry
The online fashion retail industry consist of organisations which sell fashion products
through the internet and capture online fashion retail market. Online retail fashion organisations
provide the benefit of home shopping and wide range of products at low prices which is one of
the main reason that consumers are shifting from traditional brick and mortar stores to purchase
their fashion items from online retail sites such as Boohoo and Amazon apparel. Online fashion
retail organisation Amazon Apparel which is part of the US based firm Amazon has disrupted
the online fashion industry. Chief features which set online retail organisations apart from brands
which mainly rely on physical stores for overall sales are unparalleled personalisation and
reliable services. These features are able to attract consumers to online retail sites in comparison
to purchasing products from official website of particular retail brand (Kautish and Sharma,
2018). The main impact of online retail organisation entering the retail industry is that retail
brands are forced to offer their products at flexible prices as fashion brands change the price of
their goods on the basis of demand. Amazon utilises this impact to price more competitively.
This negatively affects overall profit margins of fashion retail organisation. In addition to this
rising dominance of online retail business firms have resulted in the retail brands which sell their
clothes primarily through physical stores to utilise uniform pricing which reduces the
profitability of the company.
Effect of Brexit on fashion retail industry
The main effect of Brexit on retail industry is increase in tariffs of 12% on apparel
imports to the EU. The British government is also aiming to increase import tariffs from fashion
products of the EU which will increase the overall price of fashion goods in UK. The ease of
doing business for European fashion brands will decrease as a result of Brexit. Another major
affect of Brexit is decrease in labour available staff of the fashion industry which includes
garment workers, designers, warehouse staff and other employees recruited by the fashion retail
industry (Esparza, 2018). Decreasing talent pool available for the British fashion retail industry
has an inflammatory impact on wages of the company. Brexit deal has a disruptive effect on the
fashion industry. In addition to this the uncertainty related to Brexit has given negative results in
relation to the fashion retail industry which depends on advance planning for various business