The Value of Fast Fashion: Quick Response, Enhanced Design, and Strategic Consumer Behavior
By Gérard P. Cachon, Robert Swinney. Management Sciences, 2011
664 citations recorded by the source corpus.
A fast fashion system combines quick response production capabilities with enhanced product design capabilities to both design “hot” products that capture the latest consumer trends and exploit minimal production lead times to match supply with uncertain demand. We develop a model of such a system and compare its performance to three alternative systems: quick-response-only systems, enhanced-design-only systems, and traditional systems (which lack both enhanced design and quick response capabilities). In particular, we focus on the impact of each of the four systems on “strategic” or forward-looking consumer purchasing behavior, i.e., the intentional delay in purchasing an item at the full price to obtain it during an end-of-season clearance. We find that enhanced design helps to mitigate strategic behavior by offering consumers a product they value more, making them less willing to risk waiting for a clearance sale and possibly experiencing a stockout. Quick response mitigates strategic behavior through a different mechanism: by better matching supply to demand, it reduces the chance of a clearance sale. Most importantly, we find that although it is possible for quick response and enhanced design to be either complements or substitutes, the complementarity effect tends to dominate. Hence, when both quick response and enhanced design are combined in a fast fashion system, the firm typically enjoys a greater incremental increase in profit than the sum of the increases resulting from employing either system in isolation. Furthermore, complementarity is strongest when customers are very strategic. We conclude that fast fashion systems can be of significant value, particularly when consumers exhibit strategic behavior. This paper was accepted by Yossi Aviv, operations management.
Subfields: Management Information Systems, Management Science and Operations Research, Strategy and Management
View Paper: https://www.semanticscholar.org/paper/cb10df58f11132f577948d5f5193da193c1f1013
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Management Information Systems
In Management Science and Operations Research
In Strategy and Management
Citations in the corpus
- A decoupling perspective on circular business model implementation: Illustrations from Swedish apparel (2018, background): “, 2015), particularly in relation to a streamlined “fast fashion”-focus, with agile and efficient supply chains that currently dominate the industry (Barnes and Lea-Greenwood, 2006; Cachon and Swinney, 2011).”
- Optimal pricing strategy under trade-in program in the presence of strategic consumers (2019, background): “, Cachon and Swinney [8], Papanastasiou and Savva [35], Shum et al.”
- Online Shopping Motives during the COVID-19 Pandemic—Lessons from the Crisis (2020, background): “Second, the apparel industry is highly volatile; thus, most business models depend on high sales and must ensure that they quickly respond to variations in the market as well as providing rapidly changing designs [21,22].”
- Brand addiction in the contexts of luxury and fast-fashion brands (2020, background): “(highly fashionable product design) (Cachon and Swinney, 2011).”