Fashion in economy

By: Dr. Javier Alvarado

With COVID-19 and confinement, the fashion industry has lost time. It was no longer necessary to have an outfit ready for summer or autumn when the majority of the population opted for comfortable clothes to work at home. With the closure of shopping centers and other points of sale, companies kept their clothes in stores and this has led to avoiding the arrival of seasonal collections on the market.

Fast fashion brands also put a brake on the collections they launch in a year, which numbered at least 20 different ones, and this has led the market to think of a contrary strategy: slow fashion, which urges clothing timeless and, also, more friendly to the environment.

The fashion industry posted a 20% decline in revenue in 2019 and 2020, while its EBITDA decreased by 3.4 percentage points to 6.8%, according to figures from the McKinsey Global Fashion Index (MGFI). The analysis details that around 7% of the companies left the market completely, due to they were bought by rivals or economic problems.

Fashion changed with the pandemic. Now, consumers, especially the youngest, have migrated to look for more sustainable options, and these options have been opened to give garments a second chance, therefore, large companies have chosen to launch clothing options under these features.

The disaffection of millennials and Generation Z towards sustainable fashion may be due to prices. However, it seems that the main reason is greenwashing (greenwashing) and the misuse of the term “sustainable fashion” by certain brands. 42% of consumers of these generations plan to spend more on second-hand clothing in the future as they consider it more sustainable, inclusive, and transparent than that marketed sustainably.

Giving clothes a second chance is also one of the lessons learned from the pandemic, which gives strength to the purchase of reused clothes. It is common to see that social networks and digital platforms have become a showcase for these garments. The pandemic taught us that clothes can be used again, when before they were used a maximum of nine times and thrown away. We have learned that we have to live with what we have and that clothes must be consistent with who we are.

Last year, eBay data revealed that two second-hand fashion items were sold every three seconds between January and July, with 30% more items being sold in June 2020 compared to March.

This year’s study by ThredUP found that the average thrift shopper purchased about seven secondhand items in the last year that they would normally have purchased new, displacing more than 542 million new clothing items. The report also found that consumer values have changed during the pandemic, with one in three caring more about wearing sustainable clothing compared to before Covid.

More consumers are also turning the tide against waste, with 51% more opposed to environmental waste and 60% more opposed to wasting money.

This growth was largely driven by the app’s Generation Z users, who often act as ambassadors for thrift retail.

This growth was “driven by wardrobe cleanliness, growing concern about the environmental impact of fashion, and a continuing desire to support charities through reselling clothing.” This showed a “clear intention” among consumers to buy more second-hand clothing rather than new.

The fashion industry accelerates the consumption of natural resources in an uncontrolled manner, pollutes the environment, and represents a loss in the biodiversity of ecosystems, which discard more than 200 tons a year in Mexico; therefore, buying second-hand clothes is a better option for consumers.

Society, aware of the impact of its decisions and the threat of the climate crisis, has taken up this powerful message, promoting a revolution that will lead the second-hand clothing sector to double the current size of the fast fashion market in 2030.
Luckily for the planet, it looks like the second-hand clothing industry has the potential to change the fashion industry. As ThredUp has found, the resale market is growing at a rate 11 times faster than traditional retail and should reach 84,000 million dollars in 2030, while it forecasts that the value of fast fashion will not exceed 40,000 million dollars. In 2019, this market was worth $36 billion.

A potential that even places the second-hand market ahead of sustainable fashion.

A trend that has increased with the appearance of more sites to monetize the wardrobe, and because of the pandemic. According to ThredUp, around 118 million new consumers have bought or sold second-hand item of clothing in 2021, compared to 36.2 million first-time consumers in 2020.

Second-hand clothing platforms have seen sales soar over the past year as economic uncertainty and heightened awareness of the environmental crisis pushed consumers to make more sustainable purchasing decisions, particularly during the pandemic.

Despite this, it seems that the fashion industry as a whole is on the right track. The second-hand clothing market will continue to grow while fast fashion slows its growth.