Bankrupt Forever 21's fast fashion not quick enough to satisfy Millennial FOMO

The moral of Forever 21's bankruptcy may be that fast-fashion shoppers won't wait around.

The California-based retailer, known for its $10 T-shirts and $20 jeans on the cutting edge of style, is closing up to 178 U.S. stores as brick-and-mortar stores struggle to compete with subscription-based shopping models, Instagram-famous brands and clothing rental services.

Younger consumers are driving the trend: Millennials (born 1981 to 1996) make up 40 percent of all purchases in stores, down from 53 percent in 2017, according to data from online platform CuponFollow.

What’s more, 36 percent of the same demographic make all of their purchases from their phones, up 20 percentage points from 2017.

That was grim news for Forever 21, a mainstream money-maker in the early 2000s that competed with H&M and Zara to bring shoppers clothing trends straight off the runway for less.

But in recent years, e-commerce fast fashion competitors have emerged using social media platforms like Instagram to catapult into the market.

Fashion Nova, the inexpensive online clothing store with prices comparable to Forever 21, became famous for mimicking celebrity looks for less, sometimes hours after stars are photographed in a designer look.

It became a viral sensation, with more than 14 million followers on Instagram, and is one of the most-Googled apparel companies, joining fashion houses like Chanel and Gucci. The brand has garnered endorsements from celebrities Cardi B and Kylie Jenner. And U.K.-based retailers Asos and Boohoo have also boosted sales by churning out clothing trends faster than traditional retail can keep up. 

Ecommerce will comprise 36 percent of total retail sales by 2022, according to the latest report by market research firm Forrester.

And rising rents have plagued some of the biggest brick-and-mortar fashion retailers. Barneys said in August it would close 15 of its 22 stores after filing for Chapter 11 bankruptcy, while Lord & Taylor and Henri Bendel flagships closed this year after 104 years and 123 years in business, respectively.

Hudson’s Bay announced earlier this month it would sell Lord & Taylor to rental subscription service Le Tote for $100 million. American Eagle and Urban Outfitters started renting out clothing such as jeans, tops and dresses earlier this year for $50 to $88 per month.

“In-store retail will need to provide more real-time engagement with consumers,” Brent Shelton, retail expert with Bospar.com, told FOX Business, stressing the importance of social media and in-store mobile prompts to retain customers. “They’ll need to be flexible with payment options to compete with those associated with online shopping.”

Barneys aimed to do that in March when it launched a luxury cannabis boutique at its Beverly Hills store called The High End, a head shop selling smokers’ accessories such as leather ashtrays, bespoke glass bongs and rolling papers.

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Saks Fifth Avenue, meanwhile, capitalized on the wellness trend, opening a pop-up at its New York City flagship offering manicures, boutique fitness classes and cold-press juices alongside clothing items such as yoga pants and leggings.

Other stores have leveraged tech to upgrade user experiences. Kate Spade New York uses augmented reality to let customers browse through hundreds of personalized handbag options for its “Make It Mine” option. 

Nearly 7,000 stores announced closings in 2017, and the number this year is up 23 percent this year from 2018, according to data from Coresight Research reported by Sourcing Journal. And, like Forever 21, 1,800 stores scheduled to close this year are in the apparel sector.