[The business of fashion is changing! Today we have our contributor talk about fashion and how the digital world has changed it!]
Fashion. Love it or loathe it, it’s something you just can’t ignore.
Whether you are flicking through the channels on your TV, strolling down the high street, or standing in line at the bus stop, you’ll likely be facing a constant visual bombardment of ads for the latest designer trends, from brands that you may or may not have an interest in.
And it’s no surprise that all those brands are fighting for your attention: fashion is big business.
Here are 7 surprising facts about the economics of the fashion industry, that you may not have known.
1. The Fashion Industry Is Worth More Than The GDP Of The UK (And Almost Twice That Of Canada’s)
This really puts into perspective just how much the fashion industry is worth.
In 2013, the GDP (Gross Domestic Product) of the entire UK was 2.678 trillion (World Bank).
In 2011, the total value of the global textiles, apparel and luxury goods market (i.e. the fashion industry) was 3.049 trillion ($3,049 billion).
In fact, it gets really scary when we compare the size of the global fashion industry to Canada, which in 2013 had a GDP of 1.827 trillion (World Bank). Effectively, the fashion industry is twice the size of Canada’s entire economic output.
2. The Fashion Industry Spends Over $500 Billion Per Year On Advertising
With such a huge amount of money available (and potential for high profit margins), the big fashion retailers (and indeed the smaller ones) spend a ridiculous amount of money each year trying to get you to buy their wares.
Annual spend on advertising for the industry stands at over $500 Billion, and this figure is only likely to rise.
3. The World’s Largest Fashion Retailer Doesn’t Actually Advertise
Zara, the world’s largest fashion retailer, with over 2,000 stores in 88 countries, don’t actually do any advertising. In fact, they barely even have a marketing department.
They also refuse to do any interviews, and their designers remain anonymous (in stark contrast to most fashion retailers who are keen to jump into bed with trending designers).
Zara’s success has been based on opening stores in high traffic, high visibility real estate and making sure that those stores look absolutely amazing. Their stores are effectively their adverts, and it’s a model that has worked incredibly well for them.
4. Zara’s Founder Has Amassed A Personal Wealth Of $69.5billion
Spaniard Amancio Ortega, who cofounded Zara in 1975 has amassed a personal wealth of $69.5billion and made it to number 4 on the Forbes list of billionaires in 2015.
To put things into perspective, that puts him just $9billion behind the world’s richest man, Microsoft founder Bill Gates, who in 2015 had a personal wealth of $78.4billion.
5. Outside Of The A List, Modelling Is Not As Lucrative As You Might Think
So with all that money flying around, it’s no wonder that for many girls (and guys) becoming a professional model is a childhood dream. However…
While, the top models earn millions of pounds, and fly round the world first class, the median salary for models is actually just $32,929.
Now that might sound like a decent salary (and it is), but what you have to remember is that a model’s career is generally very short. In fact, most female models only last around 3 seasons, and each new runway show features around 70% new faces.
6. But Modelling Aside,The Fashion Industry Does Employ A Lot Of People
In fact, there are over 4 million people employed by the fashion industry worldwide (factoring in roles in design, manufacturing, distribution, marketing, retailing, advertising, communications, publishing and consulting).
And some of those roles are exceptionally well paid. If you happen to be heading up a design team, you can expect to receive a salary of over $170,000.
7. Men’s Fashion Is Catching Up On Women’s Fashion (Sales Volume)
The menswear side of the fashion industry is growing incredibly fast, indeed a 2014 UK study showed that, on average, men spend just £99 less than women on clothing each year (£998 for men compared to £1,087 for women).
This growth has been so strong, that there are some who predict that total sales of men’s fashion may actually overtake women’s fashion within the next 5 years, as the gap is narrowing year by year.
So, that’s 7 facts about the business of fashion that you may not have known. With the growth of online shopping, and prevalence of ‘celebrity culture’, spending on fashion, and hankering for the latest designer brands, is only likely to increase in the future.
Which of course means even more ads…
Unless you are Zara.
Jordan is the owner and curator of Mr Style – a UK based fashion site, devoted to collating the latest trends in men’s style from leading fashion brands.
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