For Some Retailers, Few Things Last 'Forever'

Written by Rita Silvan

The fashion world can be fickle. A clever (and lucky) retailer can ride a wave of popularity for years, until one day — pop — the fashion pack moves on.

Both big brands and small have met this fate. Among the most recent is Forever 21, which filed for bankruptcy protection at the end of September. The fast-fashion chain has around 800 stores worldwide, many of which it plans to shutter — including all 44 of its locations in Canada. The company has said it plans to restructure to focus on its more profitable operations.

Forever 21's woes come just months after discount shoe retailer Payless ShoeSource filed for creditor protection and closed its 248 Canadian stores. It said it was ill-equipped to compete in today's retail environment.

Just what factors are playing into today's retail environment? It appears to be the culmination of several fast-moving trends converging: the unstoppable rise of e-commerce; changing consumer tastes among the Gen Zs (the generation after Millennials); the "woke" consumer focused on social responsibility; and a growing chasm between high-end and low-end shopping malls. Let's take a closer look.

The Gen Z Shopper

Gen Z, or those born between about 1995 and 2010, are the first true digital natives — growing up alongside the internet and multiple social networks. According to a recent study by consulting firm McKinsey, the keywords that define Gen Z consumers include uniqueness, ethical and unlimited. That doesn't bode well for a retailer like Forever 21, which caters to teens and 20-somethings with inexpensive iterations of current fashion trends.

Digitally savvy consumers these days are looking for unique wares, and are heavily influenced by what their social networks are posting rather than shopping for mass-market clothing at the mall.

According to a study from marketing firm Fuse, 90 per cent of Gen Z-ers said the smartphone will still be the most important daily-use device for them by 2030. Increasingly, the smartphone is a one-stop shop for ideas, inspiration and buying.

The "Woke" Shopper

Eco-conscious consumers of all ages have been turning away from fast fashion and embracing trends such as shopping less frequently, upcycling clothing (or redesigning it, if you will) and buying vintage or second-hand fashions.

This has proven a tough trend for many traditional retailers. Fast fashion in particular has been criticized for being environmentally damaging due to the mass production of inexpensive clothing that isn't necessarily built to last. Plus, the vast quantity and pace of production has been blamed for rapid increases in water pollution from microfibres and dyes. A few years ago, the World Wildlife Fund and National Geographic came out with data showing that it takes around 2,700 litres of water to make one t-shirt.

Fall of the Mall

With its extra-large size stores, Forever 21 was more vulnerable to the drop in mall traffic than other, more nimble, retailers. Today, thanks to e-commerce and speedy delivery, consumers have more shopping options than ever before. And many fashion sites, such as Fashion Nova and Asos, have no bricks-and-mortar stores, which means no upkeep or high mall rents to pay.

Consumers have also started turning away from lower-end malls that typically house run-of-the-mill retailers. In contrast, higher-end malls, or more boutique-like experiences, are still attracting eager shoppers.

As many retailers are learning the hard way these days, the trend is your friend—until it's not.