Fast Fashion and Fast Software (Part I)

Software and fashion may seem like two unrelated industries, but they share a common trait – the desire to get products to consumers faster

Fast Fashion and Fast Software (Part I)

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Software and fashion may seem like two unrelated industries, but they share a common trait – the desire to get products to consumers faster. For fashion, it may be the latest dress, suit or even accessory. With software, it could be the latest iPad application or “dot-0” update of the iOS mobile operating system.

For clothing this has created the phenomenon known as “Fast Fashion”; in technology, we might call similarly rapid products “Fast Software.” Both strive to make new products available to consumers as frequently, conveniently and inexpensively as possible. Yet they also raise similar concerns on whether we are addicted to a consumerist culture where only the latest is perceived as the best. For either fashion or tech, the primary question is whether the product meets your needs and aligns with your values.

Good examples of “Fast Fashion” are retail chains such as Zara and H&M, which are becoming ubiquitous globally. An important reason for their success is the speed at which they move from design to finished product. They have developed the capability to move from a new clothing design concept to small batches of manufactured items stocked on their shelves globally within a 2-4 week timeframe. This is 2-10 times faster than traditional “non-Fast Fashion” retailers. Speed translates directly to the bottom line, with Fast Fashion profit margins averaging 16% compared with 7% for the average “specialty-apparel retailer,” according to a study published by Bain & Co.

In software, ten years ago the time between application software releases was commonly 6 to 18 months; compare this to today’s fairly typical 6-week or less mobile app upgrade cycle. Granted, the complexity of an enterprise and a mobile application is very different. However even for the most complex products—operating systems—the interval has shrunk from over two years between major Windows Desktop releases to just over a year for iOS and about 7 months for Android. Any way you look at it, software ships about 2 to 10 times faster than it did ten years ago—very similar to the trend we have seen in fast fashion.

This speed increase has, not incidentally, led to a major reduction in cost to the consumer. A Fast Fashion item may cost one third or less of what a similar item would cost at a specialty retailer—though sometimes at a sacrifice in quality of materials and construction. In the Fast Software world, app prices have similarly plummeted, with $1.21 being the average mobile app price on Apple’s AppStore, and even less for Android. Of course, most mobile apps have far lower complexity than packaged software of, say, ten years ago. However, even games average about $0.61 on the AppStore, and one would be hard pressed to argue these have grown less sophisticated over time. Productivity apps such as the Microsoft Office suite retailed for several hundred dollars when originally released; today comparable offerings from Microsoft and Apple are in the sub-$100 range. Overall, “Fast” seems to drive consumer prices down by a factor of three or more.

In the “Fast Fashion” paradigm, rapid design, production and fulfillment capabilities allow retailers to capitalize on current and possibly fickle fashion trends in nearly real-time. This lets them bring products to market just when demonstrated interest is at its peak. The just-in-time approach reduces a manufacturer’s risk, as well as increasing profits and revenues because retailers have available precisely what the customer is most likely to buy, just when they are most likely to buy it.

Fast Fashion has two major advantages for the supplier. Fashion designers continuously produce new clothes to buy and therefore drive consumers into the outlets to purchase those clothes. This improves loyalty and induces consumers to visit the store more often. On average, a specialty retailer in Central London can expect a customer to visit 4 times a year. Fast Fashion retailer Zara sees their customers visit 17 times per year[1]. Why? There is always something new to buy, and new to see.

By removing many of the delays from the execution chain, Fast Fashion means the cost of production is also slashed. Bottlenecks are expensive, leading to excess inventory, carrying cost, extra personnel, extra space requirements and a cascade of other expenses. For Fashion at least, faster is more efficient and also cheaper.

For Fast Software, the benefits of a rapid turnaround time lie both in production cost and in the ability to ship a “leaner” product sooner. Because the primary cost in developing most software is people, production costs tend to be basically linear in time—the longer it takes, the more it costs. Shipping faster means less production cost, and less investment prior to initial product sales.

In both Fast Fashion and Fast Software, user reaction is key to driving the behavior of the producer. In the case of Fast Fashion, production of a popular item and its variants—say, a particular model of blouse—may increase, while production of an unpopular item will go down. In Fast Software, similarly, the enhancement of features which users like will continue and may even change the focus of the product in what’s called a “pivot.” Unpopular and less-used application features may be dropped, saving development and maintenance costs and permitting effort to be focused in areas the users are more excited about. In both cases, a “lean” approach with quick release and feedback cycles creates an ongoing dialog with the end user, either through increased sales, or through a better understanding of the way the product is used.

By taking a “fast” approach to fashion and software, designers of both industries can reduce risks, increase profits, and gather better user feedback from their customers. In my next blog, I’ll talk about the consumerism behind Fast Fashion and Fast Software and the benefits and drawbacks this entails.

 


[1] Ferdows, Lewis and Machuca, “Rapid-Fire Fulfillment”, Harvard Business Review, November 2004

Dr. Jim Walsh

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Dr. Jim Walsh

CTO

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