Mar 20 How To Start A Fashion Business Part 4 – Sales and Marketing
A healthy budget and a great, marketable brand are definitely important foundations of building a fashion business. However, they’re not the only factors that will make an online business successful. In fact, if you have a “build it and they will come” strategy and heavily rely on social channels to attain your revenue goals, you might be sadly disappointed at the performance of your digital business in 2-3 years.
Business owners should keep a few things in mind when setting up a digital fashion business. While the opportunity to make millions of dollars and expand to global markets is definitely a possibility, the main component leading to the success of an online fashion business is the mentality of the business owner. The old idea that digital is cheap, easy, and that you can do it yourself while making a lot of money with little overhead is fatal and will kill your business even before it starts.
The first two years of building an online business are vital, and if you do not set things up properly, your budget will quickly exasperate, leaving you exhausted and with little room to grow your business. The opportunities are immense; however, digital is hard and very technical to compete in, and it requires as much investment as setting up a brick-and-mortar store. You need not only an investment of capital, but time, energy, and dedication when sales do not take off right away.
Allocating a healthy budget into digital marketing is not only about making your brand visible to your target market, but it is also about collecting important data that can help you get a deeper understanding of your target market. This will help you to continually refine your marketing strategies to make them more effective over time.
Traditionally when a fashion brand opens their first retail store, they expect some costs of doing business that are familiar to them. For example, leasing a desirable location in a high-traffic retail area, spending money on the build-out, buying stock, hiring employees, setting up a POS terminal, etc.
So let’s take a look at some important areas of digital marketing and sales you should be aware of if you’re considering turning your fashion brand into a digital business.
1. Understanding the Differences Between Digital Fashion Business and Brick-and-Mortar
Fashion brands are accustomed to the challenges and entry barriers of setting up a traditional brick-and-mortar business. However, they need to be aware of the fact that while the opportunities are vast with digital, it has its own set of entry barriers and costs of doing business.
The time it takes to execute a well-researched digital marketing plan needed to increase the traffic to your website, establish your online positioning, and compete against other brands in the digital space differs from the time it takes to open a retail store in an area with well-established foot traffic and start selling. Digital has a different pace in the beginning than brick and mortar.
Understanding this will put the business owner in the right frame of mind to maintain the ongoing investment and the patience needed in the beginning of the business cycle. It could take anywhere from 6 months to 2 years to get a firm grasp on your digital market and start seeing some kind of return on your investment. On the other hand, retail has an immediate return once the store is open.
The costs of doing business are also very different and often intangible, which makes it hard for those who are familiar with operating in a brick-and-mortar setting. Online, you can’t see your target market, so doing the proper research to create a strong blueprint on how to market to the target consumer are essential to having a successful strategy.
2. Setting Up Proper Sales Channels
While there are a lot of similarities between online retailers and brick-and-mortar retail stores, when we look at the traditional entry barriers at the brand level, online and offline are completely different animals.
Fashion business looking to successfully penetrate the digital market cannot ignore the importance of setting up multiple sales channels. If you are looking to make and average of 10-15 orders a day consistently, it should not matter whether the sales come from your actual website, Amazon, Etsy, or another third-party site. Diversification is a big factor to having digital success, and fashion brands are leaving a lot of money on the table if they ignore this strategy.
3. Creating Visibility
Once the store is open for business, if you’re in a good enough location and open during peak season, you can start having great sales right away. Quite possibly, your business might even breaking even within the first 6 months, regardless if people know your brand or not. This is the power of setting up shop in a high-traffic retail area.
With digital, you have to build your own “foot traffic”, even if you do plan on selling your brand on a digital marketplace like Revolve, Net-a-Porter, or Nordstrom Online. You still have to generate demand for your brand. If you fail to do so, you will face the risk of getting lost in the shuffle of the thousands of brands that are currently selling on these sites.
4. Building Brand Equity and Trust
If you are seriously interested in building a reputable fashion brand in digital, stop DIYing your website and relying on a friend to shoot your product images, or trying to become your own photographer.
Just because you know how to easily launch a Shopify template and put up some product/fashion photos that are good enough does not mean you should. Find professionals to work with who will build you a website with legit content properly optimized based on best practices. Spend money on top models, even if it means doing fewer shoots. These things build brand equity and trust, especially when you are newcomer to the fashion industry and still trying to build your brand reputation.
Remember, you are building a digital business. This takes time and investment, just as any other business does. If you want to succeed, you have to invest in the beginning and focus on getting better returns in years two and three.