Global Commodity Chains and Fast Fashion: How the Apparel Industry Continues to Re-Invent Itself

Abstract

This article examines changes in global commodity chains in the apparel industry, most notably how supply-driven innovations are linked with changing consumer (demand-driven) behaviour. It begins with a discussion of apparel manufacturing as a quintessentially labour intensive, low capital sector that has a long history in advanced economies. In recent decades, however, two forces have resulted in changes in this industry. First, increased liberalized trade regimes (MFA phase-out) have reduced quotas on apparel exports and imports, encouraging emerging economies to embrace this industry as part of their export-led growth strategies. As a consequence, much of apparel manufacturing has shifted to these emerging economies. Second, Western retailers have increasingly pushed supply chain rationalization and improved channel integration to force manufacturers to be more responsive to cost, quality and speed of delivery requirements. Shortened turn-around time for manufacturers now complements low price as the essential features for sub-contracting and it provides retailers with opportunities to sell inexpensive, fashion-orientated goods. Innovations associated with fast fashion are discussed, particularly how some retailers have combined supply chain rationalization with fashionable product offerings that meet volatile consumer preferences. The interaction between consumer identity formation and retailer strategies is discussed in detail, providing an analysis of the interdependency of both demand for and supply of products. Finally, the article uses examples of two major retailers, Zara and H&M, to illustrate how strategic differences within the fast fashion model reflect variations in global commodity chain restructuring.