PSFK's researchers reveal why the fast fashion giant failed—and how its innovative rivals are succeeding by listening to younger shoppers

Earlier this week, Forever 21 announced that the company—a globally recognized brand with 800 stores worldwide—is filing for bankruptcy. It's a striking fall from grace for the retailer, which markets itself to young millennials and Gen Z.

But the move is hardly surprising. Despite its size, Forever 21 never matched the innovation that its peers were able to achieve. A rising tide of sustainable alternatives, peer-to-peer apps and tech integration have transformed the fashion industry that the brand itself helped to grow. A change like this doesn't happen overnight, so the team at PSFK has analyzed what caused Forever 21 to fail—and what helped its competitors succeed.

Changing, More Sustainable Tastes

Young consumers, Forever 21's target demographic, are becoming increasingly aware of climate change and the individual actions that impact it. They're losing their taste for fast fashion, eschewing disposability for better-made or more sustainable alternatives. The brand made no effort to update its manufacturing process, unlike competitors such as H&M and Zara.

Gen Z also places a greater emphasis on individuality, leading a boom in secondhand shopping and peer-to-peer resale apps like Depop. Younger consumers don't want to look like everyone else; they want to be trendsetters. Other retailers encourage uniqueness in their own ways, including StockX's streetwear drops and Choosy's social media-approved pieces. All three of these competitors actively work to build a community around the brand, but Forever 21 was unable to do the same.

Lagging Store Experience

Forever 21 is also stuck in a mall mindset, refusing to update its store experience in a changing, digital-first landscape. Each store looks mostly the same, and the retailer does not offer buy online, pickup in store (BOPIS) services like many of its competitors. The result is an in-store experience that feels stagnant and unconnected to the digital side.

Other brands vying for attention from younger customers have instead pushed forward on these fronts. Urban Outfitters and its sister brands have invested in unique store design, BOPIS capabilities and even a clothing rental service called Nuuly. Foot Locker partnered with Nike on in-store tech that improves shopping and builds community. Levi's allows its customers to customize their perfect pair of jeans.

Uninventive Messaging

Taking a quick look through Forever 21's social media and website, one fact becomes clear: Its images look too perfect, like they've been airbrushed to the limit of believability. Most models have perfect skin, tiny bodies and immaculate outfits.

But today's most exciting brands are now switching up their marketing, promoting messages of inclusivity and alternative beauty. Glossier and Universal Standard have built empires off of their radically inclusive marketing. Perhaps the biggest success story here is American Eagle and Aerie, sister brands that have stopped altering their campaign images and promote a more realistic version of beauty.

Moving Forward

Forever 21's bankruptcy is a loss for the industry, but much can be learned from its failure. An inability to innovate ultimately did the company in, proving that retailers, no matter how large, should never rest on their laurels.

The retail industry is now being led by brands that listen more closely than ever to their shoppers, who champion sustainability, individuality, inclusivity and digital integration. The next generation of shoppers is making it clear what it wants—now it's up to retailers to listen.


Lead image: MIKI Yoshihito/Flickr

Earlier this week, Forever 21 announced that the company—a globally recognized brand with 800 stores worldwide—is filing for bankruptcy. It's a striking fall from grace for the retailer, which markets itself to young millennials and Gen Z.

But the move is hardly surprising. Despite its size, Forever 21 never matched the innovation that its peers were able to achieve. A rising tide of sustainable alternatives, peer-to-peer apps and tech integration have transformed the fashion industry that the brand itself helped to grow. A change like this doesn't happen overnight, so the team at PSFK has analyzed what caused Forever 21 to fail—and what helped its competitors succeed.