Written By: Sarah P. | August 2024

Effective Tips to Help Your Fashion Business Thrive Amidst Economic Uncertainty

You’d have to be living under a rock to not be aware of the challenging economic conditions. We are seeing them play out in retail, with people being more careful about what they spend. Consumers are prioritizing essentials and seeking out value in every purchase. The number of people emailing and dropping in resumes to retailers has spiked over the last month, indicating a shift in the job market as well. This isn’t just a temporary downturn; it’s a significant economic shift.

It’s a challenging economy. Here is some of our advice:

• The current economic conditions are not normal. You need to adapt your business strategies to remain competitive and relevant. You cannot trade as if they are normal.
• Show value through a loyalty offer with cash off the next purchase. Cash is better understood than points, and it builds a stronger emotional connection with your customers. Big business competitors can’t easily replicate this.
• Stock what you know sells for you. Typically, your top 25 sellers are out of stock 20% of the time. Analyze your sales data regularly and focus on keeping these best-sellers available.
• Make the in-store experience happy and welcoming. Your store should be a place where customers feel good about shopping, even in tough times.
• Quit dead stock. If it’s not sold in 6 months, why is it on your shelves? Consider discounting or bundling these items to move them faster.
• Expand the appeal of your business with products you’ve never stocked before and pitch them outside your business. Diversifying your product range can attract new customers and give existing ones more reasons to return.
• Reset the front 3 meters of your shop weekly. This keeps your store feeling fresh and encourages customers to explore new arrivals.
• Ensure every hour of labor cost on your roster delivers value. Optimize staff schedules to match peak shopping times and ensure productivity.Ask a supplier pitching a new product these questions:
• Ask a supplier pitching a new product these questions:
  
  • How can I reach them?
  • Who is the customer?
  • How valuable are they to me over a year?
  • How many Google searches are there in Australia every month for this product?
  • When they search, what is the search text?

By mentioning this, suppliers, too, need to adjust their businesses to reflect the economic conditions. Building strong relationships with suppliers who understand your needs and challenges is essential.

On top of what you read and feel about the economy, businesses have just had to absorb a 3.75% wage increase and a 0.5% superannuation contribution increase. Add to this a minimum 5% annual increase in rent and a 33% increase in insurance, and you can get a sense of the stress some will be under. Navigating these rising costs requires careful financial planning and perhaps a reevaluation of your pricing strategy.