The Fashion Industry outlines unique fashion designs, styles, the latest trends, and an aesthetic sense of beauty. The usage of fashion terms is for cosmetics, footwear, accessories, clothing, and jewelry from various cultural aesthetics, and collectively it creates a mixture of outfits. Today, we’ll discuss the PESTLE analysis of Fashion Industry; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Fashion Industry
Some of the main political factors in the Fashion Industry PESTLE analysis are as follows;
I-Government Regulations
Fashion Companies procure cotton fabric and other materials from various countries across the globe. The government trade regulations and policies vary from country to country depending on the political alliance and relationship with the particular country. In case of a conflicted relationship, import and export of material would become highly difficult and challenging for the particular country.
II-Political Influence
The political leaders and first ladies of the countries have a great influence on the masses and the country. People from various classes look up to them and follow their styles. Therefore, political leaders and politicians collaborate with various fashion designers to develop their customized clothes and stylish designs for different occasions.
III-Political Stability
The stable political environment plays a key role in the growth of Fashion Companies. In case of political turmoil, higher unemployment rate, roadblocks, processions, and other conflicts; people would show a great interest in politics, rather than fashion designs and styles.
Economical Factors Affecting Fashion Industry
Some of the main economic factors in the Fashion Industry PESTLE analysis are as follows;
I-Expensive Material
Global economic crisis, high inflation rate, increasing oil prices, and other factors would collectively increase the material and supply costs. Fashion Companies can’t increase the retail price to a certain limit due to the buying and purchasing power of customers. It decreases the revenue, sales, and profitability of the fashion and clothes manufacturing companies.
II-Rental Clothes
The trend of rental clothes has been increasing for the past few years, both formal and casual. Some top designer and luxury clothes are highly expensive, customer only needs to wear them on a few occasions. That’s why they prefer to rent luxury clothes, instead of procuring and keeping them.
III-Inflation Rate and Interest Rate
The interest rate and inflation rate are the two main economic indicators and they directly impact the business of Fashion Companies. For instance, a higher inflation rate would make fashion products unaffordable to many people. Higher interest rates in the country reduce the spending of people, and they spend limited resources on fashion products.
Social Factors Impacting Fashion Industry
Some of the main social factors in the Fashion Industry PESTEL analysis are as follows;
I-Music
The music industry and musicians play a key role in the growth and development of Fashion Companies. While launching a new album, musicians wear new designs and stylish clothes for the song. Some particular designs and styles of music go viral and start a trend, and they attract the attention of the masses.
II-Sustainable Fashion
The consumer market has become highly cautious about eco-friendly trends and environmental sustainability. They prefer sustainable fashion and buy from fashion brands that have a transparent supply chain network and engage in ethical and sustainable practices. Fashion Companies should be transparent about their supply chain, sourcing, and production and manufacturing processes to target the eco-friendly customer market.
Technological Factors Affecting Fashion Industry
Some of the main technological factors in the Fashion Industry PESTEL analysis are as follows;
I-Advanced Technology
Fashion Companies implement advanced AI and ML technology in their entire supply chain management network. It allows you to efficiently source the material, engage in effective production and manufacturing processes, and employ cost-efficient logistics and warehouse management processes. As a result, it helps them to achieve cost efficiency, reduce the wastage of resources, and earn the trust and confidence of customers.
II-E-commerce and Online Stores
Many Fashion Companies have built their e-commerce platforms and online stores to attract the attention of the customer market. It allows them to remove the middleman and directly approach the end consumer. Many Fashion brands have experienced an increased in their online traffic and online sales from their online store.
III-Data Analytics
Fashion Companies are employing data analytics technology to process the vast variety of customer data. It allows them to accurately predict customer shopping trends and design fashion products and accessories accordingly. However, the data analytics technology also helps them to precisely produce the right product for the upcoming season to avoid overstocking and understocking issues.
Legal Factors Impacting Fashion Industry
Some of the main legal factors in the Fashion Industry PESTEL analysis are as follows;
Regulatory Compliance
Fashion Companies need to comply with the government regulations of different countries. It consists of government regulations, trade policies, quality standards, production and manufacturing policies, labor laws, sourcing requirements, import and export policies, and others. Regulatory compliance would help fashion brands to smoothly perform their business operations without disruption and delays.
Environmental Factors Affecting Fashion Industry
Some of the main environmental factors in the Fashion Industry PESTEL analysis are as follows;
Sustainability Initiative
Fashion Companies have shown a strong commitment to environmental sustainability. They have taken various eco-friendly steps like a transparent supply chain network, suppliers visibility, recycling, 2nd hand fashion products, sustainable material, and others to decrease the carbon emission rate. Environmental sustainability initiatives would help them to earn the trust and confidence of customers.
Conclusion: Fashion Industry PESTLE Analysis |PESTEL Analysis of Fashion Industry |External Environmental Analysis of Fashion Industry | Strategic Analysis of Fashion Industry
After an in-depth study of the pestle analysis of Fashion Industry; we have realized that Fashion Companies hold a significant global market share. If you are learning about the Fashion Industry PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economic, social, technological, legal, and environmental.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
