The fast fashion market is dominated by retailers that originated outside the United States, and its continued growth appears likely to be similarly international in flavor, as the U.K. chain Primark readies to introduce its extreme low price model in North America.
In some ways, Primark mimics the tactics of its well-known competitors Zara and H&M: It moves new fashions quickly into stores, maintains an extremely efficient supply chain, and presents its offerings in funky storefronts. But some of its policies also set Primark apart from other fast fashion firms.
In particular, it steadily refuses to open an online channel. Claiming that its cost orientation means it cannot support frequent returns by mail and shipping costs, Primark asserts that it will always remain exclusively a brick-and-mortar retailer. Accordingly, it invests more in its physical locations than most fast fashion chains—selecting prime locations, building huge interiors with sophisticated designs, and moving quickly into vacant stores in high traffic malls. For its entry into the United States for example, it is taking over multiple closed Sears and Filene’s locations and performing massive renovations to get the spaces appealing to shoppers.
In addition, Primark’s prices tend to run even lower than those of its low price competitors. The company insists that its pricing policies stem from its stringent supply chain efficiencies, though some critics suggest that it takes unfair and unethical advantage of inexpensive labor in less developed nations.
Another challenge for Primark is its relatively poor name recognition outside the United Kingdom. It hopes that the young fast fashion shoppers who stumble upon its stores will quickly spread the word about it through social media. If they get a good enough deal, such customers might not be able to help themselves, even if they cannot shop through an online channel.
Discussion Questions:
- What is Primark’s retail strategy: its target market(s), retail format, and bases for sustainable competitive advantage?
- Who are Primark’s primary competitors in the United States?
- Do you believe it will have a successful entry into the United States? Why or why not?
Source: Peter Evans, The Wall Street Journal, October 23, 2014