Dec 06 How To Start A Fashion Business Part 3 – Brand Development
As with any business, you will have to find ways to add value to your brand if you would like to perceived as more than just a commodity. Brand development goes beyond the visual “identity” aspect of a brand, your creative direction will be a fraction of what determines your value in the eyes of consumers. Brand development is about how much value you add to your brand. Part of what makes having a fashion business so challenging in this consumer age is that the elements that make up the brand value chain are constantly changing and evolving. Fashion brands have to understand what their consumers want, right now– and it is changing at such a rapid pace from day to day it seems almost impossible to keep up with.
So, how do you build brand equity and become a memorable brand in today’s fast paced fiercely competitive environment of fashion? Let’s start off by getting a clear idea of what brand identity is.
At its simplest form, your brand equity is how positively your market perceives your brand over the generic counterpart. What makes your customer pay $40 for something they can buy for $20? Perceived brand value.
While there are multiple factors from logistics to creatives that will add value to your brand, let’s focus on a few of the most crucial aspects of fashion marketing, business owners might have a hard time keeping up with in the next few years.
For fashion brand’s today, marketing has become a challenge. Those entering fashion in 2017 also cannot afford to ignore the potential of the millennial generation. If a brand can figure out how to effectively communicate within digital, traditional, and social mediums to this market who has embraced digital as their lifestyle, they have a greater chance of achieving long-term success. The millennial generation will be the largest generation and is coming of age in terms of buying power. By 2018-2020 millennials will be the largest market segment buying in the luxury fashion market, brands have to find ways to reach them.
There are several different platforms for marketing now, and each requires a certain level of finesse and holds its own unique purpose. From the outside looking in, it looks as if right now marketing is divided into social, digital, and traditional. But the truth is, all of these segments are now one, and these moving forces are now considered to be just “marketing”. All messages and communication have to be seamless, the professional term for this current environment is called omni channel marketing.What is at the root of it all is the ability to have access to massive amounts of data for the first time ever. It is a concept all big players in fashion have embraced in their marketing strategies as mobile retailing, and geolocation will become more prominent. At the end of the day what will add tremendous value to any brand entering the market, or trying to maintain their brand status, will not only be the ability to access big data – but the ability to understand it and implement data-driven marketing strategies. These data-driven strategies will allow brands to start building their digital location, as well as their digital assets.
Everything has been done in fashion. It has been done, and re-done a thousand times over. This does not mean it cannot be done again, and better. Right now there are so many fascinating innovations in fabric production. The market is starting to demand more sustainable brands, vegan products, eco-friendly, global imports, etc. Developing great products will always be #1 in creating a sustainable fashion brand. Whether you are a private label brand, retailer, or actually designing and producing your own line, research the trends and know what is perceived as “good”. If you do not have quality products your brand will lose value quickly.
Another big threat to the fashion industry anyone going into it in 2017 and beyond needs to be aware of is global climate change. Increased temperature, and over farmed resources are affecting some precious raw materials used in clothing production, such as cashmere. This will greatly affect your value chain if all of a sudden scarcity of a certain material affects your ability to produce or sustain a brand. Again, this all goes back to sustainability, because as the millennials age and have more luxury buying power in the next decade, sustainable brands will most likely be perceived as more valuable.
Pricing is one of the most difficult parts for a fashion brand, but it is crucial. In fashion, a brand is only as good as its perceived value. Even if you make the best quality goods out there, if they are priced too low they will not be perceived as high quality. On the other hand, if they are priced too high and do not have enough brand value, this can be something that could also devalue the brand.
A good way to come up with a solid pricing strategy is to do a break down of all your costs, research your market, and find the spot where you are still making a healthy profit margin, but are also competitive. To do this you have to start by researching your market. Once you have a clear idea of when your competitors are doing, then do a breakdown of all your monthly costs so you have an idea of what you need to generate on a monthly basis, and set a target revenue goal. Doing this will help you get a realistic view on your pricing so your business is profitable.
One market trend every fashion business owner has to be aware of is the popularity and future growth potential of the off-priced market. As more and more consumers are looking for luxury goods at affordable prices, it will continue to make pricing even more challenging for mid-level and luxury fashion brands.
This era of consumerism is all about offering your customers an experience that is connected and is centered around making their lives easier. Brands who are fully connected and offer a high level of service, quicker, will be valued higher. This is all about how and where you communicate with your customers, managing their experience, and the incentives you offer that will turn one-time shoppers into repeat loyal brand lovers.
Social media has indefinitely changed the way brands interact with customers. From Instagram posts, review sites, Facebook comments, to tweets, fashion business owners now have to be listening and responding to every sentiment out there, whether it is negative or positive. Pay very close attention to your social media insights, hashtags, and brand mentions as they will give you valuable indications of ways to improve your brand. Offer shoppers free shipping, fast and easy returns, incentives to leave positive reviews or social media posts. Promote user generated content to increase the amount of positive conversations about your brand. Constantly be aware of what shoppers these days are expecting, and try your best to offer it to them.
Overall, what is driving all of this is the shift in the way the consumers are engaging with fashion brands, their expectations of value, the changes that are happening in the global and political environment, and the increasing buying power of the millennial generation. This maturity of a generation that is bigger than the baby boomer generation, and is interconnected to digital as a way of life will have a huge impact on the fashion market. Brands cannot afford to ignore this market.
As it stands, baby boomers have reached the age where fashion buying is becoming less of a priority to them, so the luxury market is having to find new ways to remain relevant with millennials, who do not yet have the buying power to actually afford luxury fashion. The mid-market is going manufacturer-direct, which leaves much more room for competition at the retail level, and off-price business models are still looking at some growth in the market share as the market is demanding higher quality goods, at lower prices. In this upside down market, if you do not know your exact place it will be hard to grab and hold the attention of the consumer and grow into a memorable brand.