lues.  Inside Retail spoke to Rosanna Iacono, CEO and advisor at The Growth Activists, to unpack the potential strategies driving fast-fashion brands to enter the premium garment space. Staying at the forefront of design Iacanno shared that there could be any number of reasons that fast-fashion brands are introducing premium garments as part of their product offerings. “It enables brand enhancement because offering higher quality materials and more fashion-forward designs in limited quantities creates a perception of exclusivity, which in turn drives desirability,” Iacanno said. However, an elevated or premium range is not enough for fast-fashion brands to stand out and differentiate themselves from competitors. Fast fashion brands have been curating elevated collections as part of their merchandise strategy for many years now but with varying levels of success. “For real differentiation, it comes down to the quality of execution – this includes how good the actual product quality is, the uniqueness of the aesthetic identity, the ability to generate hype and, very importantly, the ability to sustain the quality of execution over several collections in order to be recognised as leaders in the premium space,” explained Iacanno. H&M has had incredible success since 2004 releasing, and regularly selling out, its annual collaborations with esteemed high-fashion designers including Karl Lagerfeld, Jimmy Choo, Stella McCartney, Balmain, Isabel Marant and Versace. In contrast, its “studio” collection falls into its ‘premium’ category and places less emphasis on the designs and a greater focus on highlighting materials like leather, wool, silk and mohair. Posing as sustainable with materials  While a premium collection will not help brands like Zara, Mango, Asos and H&M escape their fast-fashion status, it might align with their consumers’ personal decision to shop more consciously with longevity in mind. “‘Premium’ may imply greater longevity due to the elevated quality, which is a desirable sustainability attribute, but this is not overt,” explained Iacono. These ‘premium’ collections still fit the fast-fashion criteria despite the higher price point due to the brands rapidly producing a high volume of garments to bring to market. “One further consideration is that with sustainability-oriented consumer behaviours becoming more mainstream, the notion of buying fewer better garments that last longer is beginning to grab hold,” said Iacono. “This means these early adopters are looking for high-quality goods that have greater physical and emotional longevity. These higher-end ranges may also be a way of beginning to address this rising behavioural trend,” she added. Fast-fashion brands have dabbled in environmental-themed collections, including H&M’s Conscious collection, Adidas’ Primegreen collection, and Everlane’s Renew collection, which claim to be sustainable. However, the ‘premium’ collections offered by fast-fashion brands continue to only make up a small portion of their product offerings and account for an even smaller portion of their profit margins. “Even though they may add high-end collections to their offering, their dominant operating model is characterised by rapid production cycles, accessible pricing delivered through mass production and lower quality materials, and high volume sales,” Iacono said.  Testing and stretching price-elasticity  Iacono also cited the psychological effect of garments being sold at a lower price point, which creates less emotional durability for consumers, contributing to a disposable mindset and high rates of overconsumption. Premium collections could be an attempt by fast-fashion brands to be seen as both accessible and aspirational shopping destinations for consumers. “They are trying to appeal to consumers who will generally fulfil different wardrobe needs across different price-tiered channels, and saying to them ‘we cover all your needs’,” said Iacono. Cross-channel shopping facilitated by e-commerce has popularised a high-low style of dressing amongst consumers – where consumers’ wardrobes are made up of both budget and investment pieces. “[Premium collections] enables them to test price-elasticity and uncover whether new pricing segments with higher margins can become a permanent part of their offering,”  said Iacono. However, with competition from ultra fast-fashion companies like Shein and Temu, it’s unknown whether fast-fashion brands like Zara, H&M, Mango, Urban Outfitters and Topshop can justify their premium price points. “The percentage of sales and margin these collections contribute to overall business performance for these brands is still minuscule, so the key value in these initiatives is in testing price-elasticity and emerging operating models,” said Iacono. “Their core business model and brand image remains focused on affordability and rapid production cycles, so there is no escaping the ‘fast-fashion’ label unless their current model evolves significantly,” Iacono concluded.