Profit Blog
For a business to be successful within the fashion industry, it needs to generate profit. The fashion industry is worth over 1.53 trillion dollars (Statista, 2023), and many different sectors contribute to this.
One of these sectors is: luxury fashion brands. These maintain high profit margins due to their exclusive appeal, premium pricing, and focusing on existing clients. On the other hand, the fast fashion sector focuses on a quick trend-led turnover of inexpensive clothing. They have a smaller profit margin but make up for it with high sales volumes and frequent stock turnover. Another sector is e-commerce, online retail has seen major growth in recent years due to the Covid-19 pandemic and technological advancements. E-commerce companies also generally have lower operating costs in comparison to brick-and-mortar retailers, which can lead to better profitability.
To maintain a competitive edge in uncertain times brands can aim to diversify product ranges. This caters to a broader customer base, offering affordable, more premium, and essential products will make a brand appeal to a wider audience. Dynamic pricing is one of the core capabilities to set innovators apart in the retail landscape of the future. (WGSN, 2023). Furthermore, brands can invest in marketing and branding to cater to their specific target audience. This will help them stand out and encourage brand loyalty. Another way to maintain a competitive edge is to prioritise customer engagement and listen to feedback or reviews from customers. This can be engaging through social media or other channels to give customers a voice.
Creative directors can assist with these through market research, they can conduct thorough market research to stay informed about customer preferences and current trends. The information that they gather is then used to inform creative choices and directions that are likely to resonate with customers.
Profit is the driving force in the fashion industry, keeping a balance between creativity and commerce is crucial to the success of a business. Brands must innovate, adapt, and respond to changing trends and consumer demands to thrive.
References:
Medeiros, C (2023). Value Fashion Retail: Pricing Strategies. [online] Wgsn.com. Available at: https://www.wgsn.com/insight/article/64f7500ea4fbea6820c2c736 [Accessed 20th October 2023].
Mitterfellner, O (2020). Fashion marketing and communication: theory and practice across the fashion industry. Abingdon, Oxon: New York, Ny: Routledge. [Accessed 19th October 2023].
Smith, P. (2023). Global apparel market – statistics & facts. [online] Statista.com. Available at: https://www.statista.com/topics/5091/apparel-market-worldwide/#topicOverview [Accessed 19th October 2023].