Today, I’d like to deep dive and really share concrete measures and actions that you can take if you are a fashion designer or a fashion brand to make your business crisis-proof.
In my previous article, I talked about how Coronavirus affected the clothing industry and what directions fashion brands should be taking, in my opinion, moving forward.
Indeed, these actions are designed considering the context of the pandemic but they could totally apply whatever the crisis you might be facing in the future.
SUMMARY
- Short Term actions fashion brands and designers can quickly implement during the Pandemic
- Mid-term Actions to take to help your fashion brand better navigate during difficult times
- Long term actions to make your fashion brand crisis proof
Short Term actions fashion brands and designers can quickly implement during the Pandemic
Product related actions
Organize promotional operations to liquidate dead stocks
In the fashion industry (clothes, shoes or accessories), many products are highly linked to a season. Winter coats and boots, for instance, mostly sell during fall or winter. Beachwear are more popular during summer. The ugly christmas sweatshirts are sold a few weeks before the end of the years.
Some clothing or footwear items you have might also be part of a trend that might not last long. Prints, for instance, have a short shelf span. While some fashion trends can come back, you don’t know how long they will take before they come back. How many flamingo or leopard print do you see in the street lately ?
Not only do you need to pay for storage in order to keep them, but dead stocks are also a useless weight in your P&L that drive your results down. Not really ideal if one day you need to convince a bank or an investor to lend you money.
So, if you have that kind of products in your inventory, quickly organize promotional operations to get rid of them. Here are a few things you could try :
- Organize Private sales with your already engaged clients and consumers
- Offer major discounts
- Make Outlet sales
- Sell to wholesalers
- Sell on Fashion marketplaces
- Group the products and sell them in Lucky bags
- Run a contest and use the dead stock as the rewards
- Use the dead stock to start an ambassador program and use the inventory as samples
Reschedule product and collection launches
Unless you are selling exactly what people are currenly looking for (athleisure, lingerie, pajamas and comfy clothes), you might want to reschedule your product launches.
It doesn’t mean you can’t talk about the products that should be coming. However, during a pandemic, people are not in the mood for shopping, especially if the country is under lockdown. You might be able to sell, but it might cost you more than what you initally designed in your business plan.
As an example, if you are selling clothes and people can’t come to your store to try, you might have more client returns than planned.
If your cashflow allows it, it might be better to reschedule the launches or to push collections or products that are more adapted to the situation.
Cancel or reschedule orders with suppliers
Let’s say you have a concept store. If you can’t open or can’t serve as many people as usual, you might want to reduce the number of clothes, accessories or shoes you sell.
Otherwise, you will end up with a lot of inventory. Why pay for goods you might not be able to sell ?
If you are a fashion brand that decided to push the next collection to the year after, you might want to reschedule the production or/and the delivery of the parts and fabrics needed in this particular collection. It’s a matter of cashflow management.
If you know money will not come in easily in the next months, try to negotiate with your suppliers so that your (professional) bank account doesn’t get overdrawn.
Focus on the most profitable products
In nowadays’ world, unless you invented a new kind of clothes, or shoes or you are selling luxury goods, the market also help define the prices.
As a matter of fact, some products might cost you more to produce but have less value in the eyes of the customers. One of my friends was selling leather goods. She had a brown leather purse that required a lot of manual work and stitches. At some point, she decided to launch more colorful products and came up with a red and a yellow folded purse. This specific product costed her less money and time to make but after surveying her customers, they were willing to spend more money on the colored items rather than on her timeless brown purse.
Another good example is jewelry. Especially if there are made out of copper or brass, they don’t cost a lot to make. Yet, you could have x6 or x7 margin because for customers, they seem more valuable.
If you have some items like that in your product line and you are in need for more cash flow, try to highlight these products a little more.
Communication
What should you communicate about during the Pandemic ? How do you communicate during a Pandemic ?
Communicate about all the operational short-term measures you took
Some countries took specific measures against the virus. Lockdown is one of them. Therefore, your customers or potential customers might be wondering if they can still go to your shop or order online.
What are the operating hours? If you have a physical location, can they still visit your shops or are you completely closed? Do you have employees who can answer the customers’ questions regarding that matter? If you sell your clothes online, what happen to the on-going orders and deliveries?
People would definitely want to know what they can expect.
If you have employees, quickly inform them of the measures you are taking and how they are going to affect their jobs? For example, do they need to work from home?
Be online where your customers are
Since people have nowhere to go, they spend a lot of time online, surfing on the internet or browsing social media. In 2020, according to Telegeography, average international internet traffic increased by 48%.
If you don’t already have an online and a social presence, it is high time you get on them. If they can’t go to you, just go to them.
During Lockdown, in the UK, internet users spent a record-breaking amount of time online, spending 36% more time on social media than usual, and 26% more time on news websites. Young adults between 18 and 24 spent the longest time online, that is to say, an average of 5 hours per day.
Should we also talk about the rise of Tik Tok? If your fashion brand targets young adults (15 to 25), this is the place to be. Interestingly, 47% of the tiktokers don’t use Instagram.
Remain true to your brand’s values
More than ever, stick to your brand’s values. People are looking for genuine brands.
Keep your editorial line.
Operations-wise
Create a store environment your customer feel safe in
In some countries, the government is requesting some shops to enforce specific measures so that they can remain open. Make sure you apply them.
For instance, in France, during the second lockdown, shops were asked to reserve 8 square meters per client. Social distancing and hydroalcoholic gel were still needed.
To make sure you have enough space between each client, as a fashion retailer, you might need to remove and re-arrange some clothes racks.
Customers don’t really know what’s going on with the virus so they might reassured to see that you are taking all the appropriate measures to keep them safe. Same for your employees.
Set up contactless payments and implement click and collect
Contactless payments might not enable you to do more sales but implementing it or increasing the limit will make your customers feel safer. And customers that feel safe are happier customers who might be more faithful to you.
Operationnaly speaking, contactless payments help speed up the time people spend paying for their clothes. So, that’s good in terms of safety, and you might be able in a day to welcome more customers because of those little seconds you succeeded saving. The queue will also be shorter and less frustrating.
Then, setting up a “click and collect” service could be a good way to keep sales coming in. People can shop safely from their home, quickly come get their order and happily avoid delivery fees.
Contact your retailers to understand their problems and offer solutions
If you are a fashion brand or a fashion designer who relies on a network of boutiques, quickly contact your retailers.
They might be struggling as much as you are. Be human and try to understand their own issues so that you can come up with solutions that can help you both.
You can maybe offer to give a special presentation on their social media or slightly delay your shipment. Connect with them and see how you can keep working together despites the situation.
Focus on E-commerce
This might seem obvious but sometimes, you just gotta have people tell you the obvious. Now is the moment to sell online.
The good news is : people are more and more used to buy clothes, shoes and fashion accessories online. Yes, their spending is decreasing but the number of online buyers is increasing.
Another good news is that clothes and shoes are products that can somehow easily be shipped. That’s particularly true for clothes because they are lightweigth products. Sometimes, they can even fit in a padded enveloppe.
One last good news regarding e-commerce : if you don’t already own an e-shop, there are multiple platforms that enable you to easily create one.
About your finances
Get rid of all non-essential expenses
When the business is doing great, we don’t take attention to all the small expenses that we have because they feel like nothing.
Thing is: Small expenses quickly add up. On top of that, you might be paying for services or softwares that you don’t even use and this can represent quite a big amount of money at the end of the day.
And this money can be exact sum that you need to pay your employees or fuel your upcoming collections. So check out your expense list and get rid of everything that is not useful or doesn’t add any value in the short, middle or long term.
Apply for all the government’s aids and subventions
In France, the government gave some financial help to the companies that lost 50 to 75% of turnover compared to the previous year and were partly financing the wages of the employees that were forced to be put under partial unemployment.
It may not represent a lot, but it’s worth trying and it’s better than nothing. If the government of the country you are in offers any form of subventions, apply for them.
Contact your financial institutions and renegotiate some terms
Fashion requires a lot of cashflow. You need to pay for the materials and the R&D that come with any new fashion designs. To do so, you may have requested a loan from the bank or from business angels.
If that’s the case, you might have a debt you need to reimburse. Bankers and business angels are not necessary sharks. A lot of them are quite human and can understand the issues you are going through. They should be true partners in your fashion adventure.
So, go discuss with them. They might be able to reduce your interest or delay the payments you need to make. They can also loan you some money if you absolutely need to.
Also, check whether you can get anything with your insurance. You never know.
Mid-term Actions to take to help your fashion brand better navigate during difficult times
About the products and collections
Adapt the collections to the new tastes of your target customers
When you stay at home all day long and even work from home, you definitely don’t have the same needs, fashionly speaking.
And statistics showed that people were more about buying athleisure goods, casual pieces of clothing and lingerie. They want to feel comfortable in their clothes.
People also feel like wearing more colorful tops. As a matter of fact, they spend a lot of time on zoom or other video conferencing softwares. And on these platforms, you only see the top part of the person. So wearing acolorful t-shirt or sweatshirt helps bring some liveliness to the situation.
Black, white, dark colors, despites being timeless essentials, will likely be less in demand.
Consider relaunching previous product winners
If you have some sale history, you might have launched in the past some products that really overperformed. Can you re-enact this success by relaunching them? Who says you can only launch a product once?
Think about this : you already did all the R&D. You have the patterns, the technical sheets. People were already satisfied and might have left you some good product reviews. On top of that, you might also have photos and videos you can use again. All you need is to produce the item.
It might cost you nothing to sell this product again. And you can ask people to pre-order it instead of producing ahead.
Re-evaluate fabric and raw material sourcing
Most borders were closed. In fact, many fabric or clothing factories based in Asia were unable to ship their orders to their clients.
There might be great fabric factories in your own country or at least in your neighbour countries. It might cost you more at first but reducing your prototyping and production time can be worth it.
If you used to work with Asia, by sourcing locally you might remove the language and cultural barriers that made transactions difficult. And it will give you a marketing advantage. Two birds one stone.
Find other alternatives for your production
Having several factories or ways to produce your fashion line can avoid you having frustrated or angry customers (waiting for their orders). Let’s say one of the workshops you used to work with goes bankrupt, you will still be able produce and/or launch your new collection.
But to do so, you need to test the skills of the factories and see what it feels like to be working with them. Don’t rely on just one workshop or one seamstress. Have several so that you can mitigate the risks. That’s what all other FMCG businesses do.
It will also give you some peace of mind, which is absolutely essential when you are a fashion entrepreneur.
Communication
Improve your client services
A good client service can do wonders. People are less likely to be angry at you or leave negative reviews on your social media.
They will also be more faithful to your fashion brand if they received good services. Of course, you should work on your client service from day 1. If you are a fashionpreneur, you are most likely the one answering clients’ questions and demands.
But what would be great for your fashion brand is to start structuring the way you address clients’ problems. You (or your team) can create templates and step by step tutorials that explain what to do if scenario A or scenario B show up.
Build and develop an engaged community for you and your brand
And if you are really in the pinch, you can ask your community for help. Ask them to pre-order, support you on your crowdfunding campaign or share your communication with their relatives. These are things that faithful customers or ambassadors would do.
But you don’t build trust in a day. It’s an every day effort to create authentic relationships with your community.
Communicate about your USP and what you do best
When in a doubt and when you don’t know what to communicate about, talk about your Unique Selling Point. What made you start and make you continue despites the Pandemic and all the hurdles it incurred?
How what you are doing right now is link to your expertise?
For instance, during the first wave of Coronavirus, many French fashion brands and designers produced masks for the nurses and doctors. Some also helped coordinating the workshops so that they could produce masks and blouses to help the medical staff.
Communicate with your employees and their families
If you have ever read Delivering Happiness, then you should know that employees are the first ambassadors of your brand (be it in fashion or in any industry).
In difficult times, it’s important to take care of your employees if you have any. Because when employees feel like they are appreciated and that the management care about them, they are a lot more productive and a real source of added value.
Don’t wait for them to ask you the difficult questions and let uncertainty and uneasiness install. They are probably scared about the situation. If you need to let go of them, tell them and if you can keep them, tell them as well. Communication is key to keeping a strong team together.
Distribution and logistics
Rethink your packaging, unboxing or click and collect experience
Is your packaging adapted to the e-commerce or click and collect experience? Now might be a good time to think about this.
Believe it or not: people do take attention to the way their products are packaged. Almost everyone received at least an absurd packaging in their life. I.e a freaking small product in a very huge box.
Try to make your packaging more ecological because it’s part of the customers’ expectations but also more lightweight and easier to manage. It will drive your logistic cost down. Luckily, they are some cool innovations for eco-friendly and lightweight packaging for fashion items.
Inspect other markets
We are evolving in an international world. Who said you just have to limit yourself to one country?
Obviously, each country has its own specificity and the standard body measures can be different. However, there might be some potential clients in other countries: some that share your values and fit the sizes you offer.
Finances
Review your business goals and desires
Since the world is going a lot slower than usual, it could be a good moment to do some introspection work.
Are you happy with the way the direction your fashion business is taking Does it fit the lifestyle you want for yourself? Or are you getting stuck into something that doesn’t match your life expectations? Was the business, before the Pandemic crisis, already struggling or was it doing well?
Analyze the results, adjust the business goals and align it with your own life goals.
Make sure you are tracking the right KPIs
When you are in your day-to-day operations and you have more work than you actually can do, it’s hard to strategically think about the business. And metrics are often part of the things that are overlooked by fashion entrepreneurs because the business of fashion in itself is very time consuming.
Sewing takes time. So does prototyping. Same for fulfilling orders.
But metrics help you see if you are going into the right direction and if you are investing where you need to. Some of the key metrics in fashion include:
- User Acquisition Cost
- Customer Lifetime Value
- Profit margins per types of product and per channel
- Turnover
- Engagement rate…
Do you follow them? Or have someone follow them and report to you?
Renegotiate the contracts and apply for subventions and business contests or awards
A pandemic or a crisis is a good reason enough to renegotiate a contract (ideally to your advantage) with a supplier/ workshop, financial institution.
Also, fashion contests are projects that take time. If you have more time on your hands now, try to send your application. Professional recognition bring trust and can be a good communication tool.
Long term actions to make your fashion brand crisis proof
About the design and the fashion positionning
Find or strengthen your market fit
Do you already have a market fit? If not, keep testing until you find it. Survey your actual customers about the type of clothes they like or about their hobbies.
If you have a market fit, strengthen your position. Develop more by products inspired by your main line. Try offering new colors, new designs or even different type of products.
Have the right creative people in the right place
Do you know the saying : Hire Slow, Fire fast?
Is the person doing the design or giving the creative direction the right one for the task?
If you are doing it all by yourself and you feel you don’t quite have the right results, seek for external advice. And if you think the stylist or creative director is not good enough, change and find another person.
Be humane but don’t stay stuck because you are afraid of hurting people. Your fashion business can’t afford it, especially during a crisis.
Invest in photoshoots, videos, or user experience that can take your brand to the next level
When you are selling fashion, visuals have a lot of importance. They contribute to attaching values and emotions to your fashion brand. It’s the little magical je-ne-sais-quoi that makes people buy.
When a crisis happen, companies tend to cut marketing and communication first. However, more than ever, they need to communicate and innovate. That’s how you can get out of a crisis.
Adopt a transparency and traceability policy with the suppliers and customers
This is a huge project but I believe every fashion brand and retailer should do it. Not only is it good for communication, but I wouldn’t be surprised if one day it becomes part of the legislation.
On top of that, having a transparency and traceability policy makes all business relations more honest and authentic.
Long-term Communication
Create or optimize your editorial line for all communications
You probably are on multiple social networks and most likely have a website and a newsletter.
Are all the communications efficient and in line with your unique selling point and values?
If not, work on your editorial chart and optimize your content.
Offer a personalized customer experience through all channels and provide unique experiences
Online and offline technologies are getting more and more interconnected. Think about measures you can take to offer a seamless experience to your client.
For instance, if they visit your social network or are already on your newsletter, the day they come to a shop to buy one of your fashion product, you can use the data you have to do something that will make them feel special.
It could be as simple as greeting them with their first name and thanking them for being on your newsletter.
Communicate about your CSR
If you are implementing a Corporate social responsibility policy, talk about it and show the progress you make.
Changing packaging more eco-friendly ones can take some time for example. But if you communicate about this and explain why it takes time, people would understand and applause your efforts.
Invest in your corporate culture
Your employees and partners are your first ambassadors. Having a corporate culture doesn’t consist in putting some nice words on a manifest or on a flyer.
It’s about putting these values at work in the corporate everyday life. If you are all about transparency for instance, then organize monthly meeting where the employees can openly talk about the issues. For a fashion brand that encourage body positivism, pick non stereotyped models.
Long-term Distribution and logistics
Digitalize point of sales to offer new experiences in store
Have you ever heard of Augmented reality mirrors? These mirrors enable you virtually try any clothes or makeup without having to put them on. You can even pre-order clothes that are not in store.
How about equipping your sales people with tablets that they can use to show your online communication and connect with people?
What if you could use neuroscience to boost your experience in-store?
Develop and optimize for e-commerce
E-commerce is actually not a short-term or mid-term actions. Shifting to e-commerce tend to reshape completely a business.
In the long term, if the business has a big volume and if you don’t have it already, you could consider outsourcing all the logistics.
There are many good logistic centers that can take care of the storage, packaging and shipping of the products.
Implement demand forecast and demand sensing tools
That has always been the core issue with fashion. As a matter of fact, the more you produce, the less a product is going to cost.
But what if a collection or a specific color in the fashion line doesn’t sell? You are stuck with a lot of inventory. However, there are now demand forecast and demand sensing tools that can help you mitigate the risk. Check it out.
Deliver single view and access to your inventory across channels
How many items do you have in each retail location and in your logistic center? If you don’t know that, that could be an issue in the future.
If all your channels you have are connected and you give a precise idea of the exact inventory you have left, not only will you save time but you could also better promote your offers.
About your overall strategy
Create processes and implement tools that can help you get real time metrics
We talk about the importance of following the right metrics earlier, but having them real time could be equally important.
Being able to operate fast and in real time is crucial and will give an edge towards your competitor.
Evaluate your business risks and plan for them
No one could have expected a pandemic. But now you have a plan in case it happens again. Don’t forget to download our Pandemic management cheatsheet if you need a reminder.
There are, however, other business risks that you can anticipate and prepare your business for :
- the launch of a new fashion competitor
- a supplier bankruptcy
- Lost shipped products
- Quality issues with your fashion clothes or accessories
- Social scandals…
Have contingency plans and allocate some emergency funds you can use in case they happen.
Review your capitalistic investment and your development strategy
If you want to develop an international scaled fashion brand, you need to think about having a capitalistic investment and development strategy.
Fashion requires a lot of funds. And if you want to accelerate and scale your business at some point, your organic sales might not be sufficient.
Invest
Last but not least, no business can resist if they don’t invest at some point. And that’s particularly true when facing a crisis.
The question is: what are the smartest investments you can make?
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