Fashion is really a type of art. It’s a way of interacting with your environment in a creative and engaged way. Obviously, most people don’t create their own clothes, but there are so many options to choose from, you have the ability to assemble something that is uniquely you and yours.
The use of your personal space in this way is an external reflection of inner realities. To echo a similar point Theodore Dalrymple made in one of his essays, the extent of your congruence with social conventions is reflected in how you present yourself.
Everyone wants to be an individual, but no one wants to be alone, and when you see people flouting social conventions–as in the ironic use of military clothing by rumpled hippies–you generally see them doing it in groups.