The Extractive Business Model of Fast Fashion: A Colonial Critique by Kanika Meshram * [47]

The concept of value creation revolves around aligning the interests of customers, stakeholders, and the organization itself. A successful business model effectively leverages these values. Central to this framework is the business model canvas, which outlines nine key elements such as customer segments, value proposition, and revenue streams. A robust supply chain, underpinned by strong partnerships, is essential for delivering this value proposition.

Fast fashion brands have become adept at responding to market demands through agile business models. However, this speed comes at a significant cost. A voracious appetite for textiles, coupled with declining garment utilization, has severe environmental implications. Furthermore, the industry’s reliance on low-cost labour in the Global South raises ethical concerns.

The Fast Fashion Value Proposition: A Disposable Culture

Fast fashion brands have revolutionised the clothing industry, offering trendy styles at rock-bottom prices. This seemingly irresistible value proposition, however, comes with a hidden cost. By constantly churning out new designs – Shein adds 2,000 daily [1], Zara produces 500 weekly [2] – fast fashion cultivates a culture of urgency, detachment, and ultimately, disposability towards clothing. This focus on fleeting trends disrespects the craftsmanship and longevity that garments can possess. It fosters customer value in “wear-once-and-discard” proposition that generates mountains of textile waste. The burden of this waste disposal, however, falls far from the trendy wardrobes of the Global North.

The fashion industry was built on the promise of cheap labour in the Global East. As wages in developed nations like the UK rose, brands shifted production to countries offering lower costs [3]. This pursuit of profit came at a human cost. To maintain low prices, companies chipped away at garment worker rights, suppressing wages, utilizing exploitative short-term contracts, and creating conditions akin to modern-day slavery.

This exploitation has deep colonial roots. The fashion industry frequently leverages state power to stifle labour unions and worker movements in the Global South. They justify these actions by painting a bleak picture – claiming these are the best opportunities available for workers in Global South, who might otherwise face even harsher realities. This logic maintains an exploitative system where Western companies reap vast profits while workers toil in unsafe environments for meagre wages.

Reimagining the Business Model: A Call for Responsibilisation

Most fast fashion business model doesn’t account for the lifecycle of its products. The responsibility for discarded clothing falls on the consumer, often leading to donation piles that end up in overflowing second-hand markets of the Global South. Places like Ghana’s Kantamanto Market and Kenya’s Gikomba Market become dumping grounds for world’s unwanted clothing[4]. This burden goes beyond logistics. The influx of cheap, trendy garments disrupts local economies in Global South and devalues their traditional clothing craftsmanship. Consumers in developing nations feel pressured to adopt Western styles, further perpetuating colonial power dynamics. So, demand for such types of clothes come from a system of colonialism where western style dresses will get you ahead in life perpetuating the notion of power and white supremacy.

The environmental impact is equally staggering. Unsold garments end up in landfills, contributing significantly to the global carbon footprint considering the long journey these clothes take to reach developing countries.  As it turns out, managing this dumped clothing comes at a cost to these countries. For example, the municipal government of Accra, Ghana spends over US $1 million annually on tipping fees for second-hand clothing waste in landfills alone; this includes expenses like fuel, maintenance, and labour. Imagine the burden if the world kept dumping clothes on your doorstep and your tax money was used to clean it up!

As the Figure illustrates, I utilized the H&M business model as a framework to illustrate how the model can be adapted to prioritize clothing circulation over landfill disposal. My suggestions are preliminary and do not comprehensively address the complexities of the issue, particularly the relentless pursuit of new styles. To shift the business model from an extractive, colonial approach to a more responsible operating model, three key areas for improvement are proposed.

Product Take-Back Programs: Retailers can partner with other stores or supply chains to collect used clothes. E-commerce platforms can inform customers about these drop-off points. Incentives can be offered to encourage participation.

Rewear and Upcycle: Brands can offer repair services for damaged clothing, extending their lifespan. Vintage sections in stores can give pre-loved clothes a new lease on life driving product extensions.

Repurposing and Recycling: Unsold clothes can be creatively transformed into packaging materials, cleaning cloths, or even new clothing lines. This requires collaboration with suppliers in the Global South to develop innovative recycling techniques.

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[1] https://www.gittemary.com/2022/07/shein-is-much-worse-than-any-other-fashion-brand-here-is-why.html#:~:text=Shein%20reportedly%20adds%20over%202%2C000,%2Dday%20period%2C%20for%20comparison.

[2] https://www.thefashionlaw.com/fast-fashion-sustainability-is-about-more-than-the-fabrics/#:~:text=As%20the%20largest%20fast%20fashion,20%2C000%20different%20styles%20a%20year.

[3] https://www.amazon.com.au/Consumed-Collective-Colonialism-Climate-Consumerism/dp/1538709848

[4] https://earthyroute.com/blogs/slow-fashion-series/4-places-where-our-clothes-end-up-when-they-are-discarded

 * Dr. Kanika Meshram is a Lecturer in Management and Marketing at the University of Melbourne. She may be reached at kanika.meshram@unimelb.edu.au. Note: the inspiration for this blog comes from Aja Barber's book, Consumed the Need for Collective Change: Colonialism, Climate Change and Consumerism. Read Professor Meshram's other posts on customer centricity [43, 31].  

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The Customer Value Proposition as a Basis for Business Strategy by Ravi Chinta * [27]

Customer Value Proposition (CVP) has become one of the most widely used terms in business in recent years. A CVP is the value perceived by customers in the product mix that your business is offering, in light of competitive options. Most businesses will conduct marketing research to identify benefits and cost savings to customers to induce purchases. Such research focuses on understanding customer needs by asking potential buyers what they want with respect to goods and services.

Product enhancement and new product introductions are often based on a process of continuously “productizing” the needs and wants explicated by customers via research studies. These are in essence market-based innovations driven by addressing the desires explicated by the customer. However, in the pre-automobile era if you asked customers about what they wanted in transportation vehicles; they would have said they would like to have faster horses. And we know how automobiles made their debut and made horses obsolete as transportation vehicles. Thus, technology-based innovations often come in and transform the mindsets of customers in how they assess perceived value. Simply stated, the primary difference between market-based innovations and technology-based innovations is that the former is driven by explicit needs and the latter is driven by both explicit and implicit needs of the customers. Thus, the customer-centric view should be expanded to include both explicit needs (expressed by the customer) and the implicit needs (elicited by a deeper and unobtrusive observations of customer behaviors).

Shadowing the customer and evaluating daily behaviors can help understand the implicit needs of consumers and businesses. For example, in a research project at Hill-Rom company, a hospital beds manufacturer based in Batesville, Indiana, hospital nurses were observed as to how they spend their 8-hour work shifts. And, that analysis led to electronically adding vital signs data entries at the bedside instead of taking notes and then typing in the data at the nursing stations. Addressing the implicit needs of customers also gives businesses a pioneering advantage because these initiatives are more difficult to imitate than product modifications based solely on explicit needs.

I contend that customer value propositions that are properly constructed and delivered make a significant contribution to business strategy and overall performance. To ensure market leadership, I recommend that a firm continuously adds new features to their product/service offerings based on newly uncovered implicit needs of customers. Apple’s market dominance is easy to understand when viewed in this way. That is what sustainable competitive advantage is all about. Thus, customer value propositions must be viewed as a dynamic concept that enables a firm to self-cannibalize its own product lines and keep up its lead in the market. It should be noted that customer intimacy is a prerequisite to product excellence, and it is the responsibility of senior management not just marketing management, to ensure that their customer value propositions reflect both the explicit and implicit needs of the customer. 

* Ravi Chinta, Ph.D., is a Professor of Management at Nova Southeastern University. He can be reached at: rchinta@nova.edu

See "The Value of a Value Proposition" (Post 11) for additional insights on the CVP.

The Value of a Value Proposition [23]

One of the most critical challenges for organizations is to differentiate themselves from competitors. It is easy to be like everyone else but great companies have their own identities and carefully conceived value propositions. Realize that different isn’t always better, but better is always different!

Think about the following 5 questions (and answers)

1. What is a customer value proposition (CVP)? How does it differ from a mission and vision, slogan, or positioning?

A value proposition is a brief but powerful statement of overall business strategy, such as Lexus’ ‘passionate pursuit of perfection.’ It is the company’s promise to the customer. It should be clear, concise, comprehensive and company-specific. A well-designed CVP is a strategic business tool that considers customer needs and wants, offerings, pricing, promotion, channels, and  a competitive advantage via people, processes and technology. Mission statements explain what the business is doing today while vision statements are forward-thinking. Slogans are creative advertising phrases that capture attention. Positioning may be product- or image-based and relate to designing and delivering value to target markets.

2. How about some great examples of customer value propositions?

• Amazon.com and you're done
• Citrix Systems - work anywhere and on any device
• FedEx - when it absolutely, positively has to get there overnight
• Gillette - the best a man can get
• Intel inside
• Office Depot - taking care of business
• Target - expect more, pay less
•  Uber - the smartest way to get around
•  Visa - it’s everywhere you want to be. 

3. How should managers build a customer value proposition?

Customer value consists of four core components: service, quality, image and price. These elements provide the basis of an organization’s value proposition. The S-Q-I-P diamond can be used to create value for customers, establish a solid business philosophy for the organization, guide strategic decisions and, ultimately, affect business performance. The vertical axis on the diamond — service and quality — represents the backbone of the firm’s offerings, while the horizontal axis — image and price — provide signaling/communicating cues to the target market. The key is to select one or two dimensions to dominate and stay competitive in the other areas. Examples include ‘where shopping is a pleasure’ for Publix’s service; ‘solutions for a small planet’ for IBM’s quality; ‘what can brown can do for you’ for UPS’ image; and ‘always low prices’ for Walmart’s pricing.

4. How does a customer value proposition relate to competitive strategy?

According to Treacy & Wiersema’s influential book, ‘The Discipline of Market Leaders,’ companies can excel by practicing one of three business strategies: best product like Nike’s product leadership, best deal like Target’s operational excellence, or best friend like Nordstrom’s customer intimacy. Innovation, process efficiency, low cost and relationship building are key in implementing value-based strategies.

5. How can organizations improve customer value propositions?

Current CVPs can be enhanced via innovation and adding value. Think about offering legendary customer service like Ritz-Carlton, cutting-edge products like Apple, unique customer experiences like the Virgin Group or pricing innovations like eBay. There are many ways to add value, such as adding benefits, branding, breaking ‘accepted’ industry rules, customization, dominant merchandise
assortments, frequency marketing programs, hassle reduction, internet options, segmented marketing, solving problems, supply chain management or technological superiority.

This blog post is the 11th in a series extracted from Superior Customer Value – Finding and Keeping Customers in the Now Economy, 4th Ed. (2019, Routledge Publishing/ Taylor & Francis). For further information, contact Art Weinstein at artweinstein9@gmail.com , 954-309-0901, www.artweinstein.com .