Forever 21 was one of the first fast-fashion brands. Almost everyone can recognize its signature yellow bags and large stores that are in almost every mall. It was made more than 4 billion dollars, but now they are closing more than 350 stores and they have filed for bankruptcy.
While Forever 21 was a leading fashion brand, it had few competitors and was unique because it was quick to supply in response to the demand for new trends. The demand rose for such products, and Forever 21 was able to accommodate that with little surplus or shortage. It was hard to find substitutes that were cheap and cute so it was able to get a lot of business.
However, soon brands like H&M offered cheap, fashionable clothing as well, and served as a competitor to Forever 21. These other brands’ products could be seen as substitutes for Forever 21’s clothing, resulting in less business for them. Also, there has been an increase in online shopping and online marketing, and many customers prefer to buy from online stores over physical shopping. This was bad for Forever 21 because their growth of physical stores and the costs spent on these. If there is the same clothes being offered in a more accessible and cheaper way, customers will result to those.
It’s interesting to connect the “downfall” of Forever 21 to supply and demand, marketing, and substitutes. Although they have filed for bankruptcy, there is still a chance they can work on the brand to come back to where they were before.
Forever 21 had a unique marketing strategy - appeal to everyone with a variety of clothes in a variety of styles. This allowed it to draw a large crowd of shoppers and make lots of money, but it also increased the cost of operating a store due to the large space needed. However, as you pointed out, with the rise of online shopping, brick and mortar stores are having a hard time competing with their online counterparts. One reason for this is the overhead required to have a physical store drives up the prices of goods. As the millennials Forever 21 was marketing to moved to online shopping, business declined. Many chain stores, such as Sears and Toys R Us have had a hard time adapting to the online business model and have failed. If Forever 21 is able to rebrand themselves and market to the next generation, they have a good chance of making it out of bankruptcy.
ReplyDeleteSource: https://www.vox.com/the-goods/2019/8/29/20838793/forever-21-consider-bankruptcy
Darn, that was my favorite store! I believe that, as the world of retail is constantly changing and evolving, fashion brands and companies need to adapt accordingly. In this case, Forever 21 failed to effectively move online in order to actively compete in contemporary consumerism. They spent most of their money on renting out spaces that a declining population of people are visiting. A lot of other companies like GAP, Lucky Brand JEANS etc. have successfully integrated their products online. Thus, the question is whether Forever 21 can positively increase their online presence in order to attract consumers, increase profit, and get out of bankruptcy.
ReplyDeleteForever 21's downfall shows how it is an inferior good. Forever 21 is known for having cheap clothing that all sizes can afford, however the quality is also cheap. This brand has been very popular for teenagers in the past decade. However, as the consumers have gotten older they have began making more money. As people's incomes increase, they seek higher quality clothing options, and consumers start spending more money on slightly more expensive options. I also believe the downfall of Forever 21 shows how much effect social media can have on marketing. Recently, there has been a negative stigma associated with Forever 21's products because of the quality and the way they look. This has become very popular because of social media and can make many teenagers and young adults who see this less likely to shop on Forever 21's site.
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