All consumers are affected by fashion – even if they think they’re not. Unfortunately, the majority of them are not able to afford the type of outfits that are shown off on the runway. Instead, they typically turn to much more affordable options such as those offered by Amazon or even Wal-Mart.
The good news, however, is that it doesn’t actually matter what the price point is. Instead, what matters is how successful a particular style of fashion turns out to be. That said, let’s take a look at how to ensure that the fashion items you offer turn out to be successful.
Changing consumer preferences and demands
Consumers have taken the internet and run with it. And, of course, this affects every single product they can purchase. When it comes to fashion, an increasingly larger number of consumers want it to carry certain promises, including:
- Being sustainable
- Being purpose-driven
- Offering greater customization options
- Being available online
- Having easy returns
At the same time, some consumers still want to see an item in person before they commit to a purchase. For these people, retail stores are still king. Either way, they want the experience of going to a store, trying items on, etc. Some online shops – such as Amazon – have tried to counter this method by offering clothing you can try on in your home before you purchase it.
Competition from online retailers
Speaking of online retailers like Amazon, they have become a huge thorn in the side of former retail giants. For the most part, an online shop has a great advantage when it comes to selling clothing. Not only are they able to offer a much wider selection, but they’re also able to cut their own expenses by not hiring sales clerks.
Online shops can also use technology to make their advantage even bigger. Techniques such as augmented reality (AR) shopping have removed barriers to buying an item without seeing it in person. Now, a consumer can ‘try on’ clothing without having to go anywhere.
In the first quarter of 2023, retail stores saw an upswing of 3% versus the previous quarter. The total amount sold by all retail stores was $272.6 billion. At the same time, online shops showed a much greater upswing of 7.8%, and they accounted for 15.1% of all sales. These numbers indicate that retail is still doing well, but that online shops are increasingly gunning for brick-and-mortar stores. As a result, several retail chains have filed for bankruptcy, and some have completely gone under.
Increasing costs of production and materials
Ever since the Covid pandemic began back in 2020, the cost of acquiring materials and production has gone through the roof. Consumers have naturally felt the pinch, and some of them have fought back by changing their purchasing habits. This has left retail stores and online shops in a precarious position, and those without a proper value chain for fashion have gone under.
Having enough of a solid reputation to be able to increase prices without losing business is what every retailer dreams of, but it’s not very realistic. The fact is that consumers can only maintain their buying habits for so long before they quite simply have to take a step back. This is where the fashion industry value chain comes into play.
Adapting to fast fashion and trends
Most retailers have adjusted what they offer to include fast fashion, along with its many trends. What this normally entails are fast changes, fast production, and inexpensive prices. Doing this has allowed retailers to get a chunk of this one billion-dollar-plus industry. During the next six years, this is expected to rise by another 5.3%, so it’s clearly worth doing. It’s truly become an integral piece of every fashion value chain.
Supply chain management and logistics
Managing the supply chain isn’t all that difficult, but it does require some foresight. For example, let’s take two companies. Company A uses a single vendor to maintain its supply chain. Then, Company B comes into the picture. They don’t have loyalty to a single vendor and, instead, they use multiple. Which company will do better?
In almost all cases, Company B will have an advantage over the supply chain due to working with a range of vendors. They’re able to pick and choose which vendors offer the best prices, putting them in a better position to increase their overall sales.
Managing inventory and reducing markdowns
Inventory management can make or break an entire store. Clothing store chains such as Kohl’s have demonstrated this by stocking only the most commonly purchased sizes in their retail stores. Although some people will go home frustrated, they also have the option to look online where they’ll find a bigger inventory.
Another thing that Kohl’s does is work its way through its available inventory very quickly. As a result, you can find shorts marked down in early summer. By taking underperforming items and marking them down, they increase their odds of selling items instead of ultimately having to put them in the trash.
Keeping up with technology and e-commerce
Selling fast fashion makes it easier to do well as such a large percentage of Americans work paycheck-to-paycheck. Falling behind technological advances and e-Commerce sales can quickly take a well-known brand such as J.C. Penny’s and put it out of business, though.
Rather than rely on what’s always worked, you must appoint someone on your staff to keep an eye on all upcoming technological advancements. For instance, stores that hopped on the automated checkout bandwagon provide a better experience for 60% of their guests. Additionally, offering AR fitting rooms increases conversion rates by a whopping 94%! Truly, performing a market analysis for your clothing business on a regular basis can pay for itself.
Maintaining profitability in a highly competitive market
Some proven methods, aside from just doing market research into the clothing industry to help you remain profitable, include:
- Improving your product portfolio
- Improving customer service
- Using vertical integration
- Boosting employee morale
If you can do all these things and make your consumers happier by incorporating sustainable materials, being purpose-driven, and/or making it much easier to make a return, you’ll be in a golden spot to keep growing your business. Remember, no matter what it seems like, retail stores sell way more than online shops! In fact, they reached a new peak in December 2022.
Turn to N41
Would you like to see your retail clothing store attain new heights? Choose N41’s leading fashion and apparel ERP solution. We have a 99% client retention rate, so you can be confident we know exactly what we’re doing. Request a free demo today.