Do you feel like you really have a handle on things and that you’re ready to take your fashion business to the next level? Before you develop any growth stage plans, find out if you’re actually ready to scale and seven ways to make it happen!
It seems simple enough- implement new strategies or build out your team and watch the additional revenue pour in. In reality, that can’t be farther from the truth. You have to have a solid, healthy business foundation in place or your brand and bottom line can suffer in a big way.
Your fashion business may be ready for the next level if you’ve been seeing success in all of your current sales channels and you know for a fact that you have a compatible (and profitable) product-market fit. That means you’ve proven your products are wanted by consumers and that there’s a sizable enough market to grow your business (i.e. as opposed to a niche that is too small, certain handcrafted goods…).
It’s also time to think about growth when you need support. Maybe you’re a solopreneur and you’re unable to do more with your sales and because there simply isn’t enough time. This is when you reach the point where doing it all on your own becomes a major obstacle to your success. Maybe you have a small team of 2-3 people but you’re not able to keep up with all of your business’ needs – and forget about outside opportunities!
In both of these scenarios, you’re preventing your business from taking off and you’re actually losing money by not investing in expanding your team. If you can secure the resources and know-how to do it (capacity building, infrastructure, etc.), scale up by hiring a professional team or by taking on a few additional team members. If that isn’t an option for you right now, scale up by hiring outside help from freelance professionals.
Speaking of resources, what are your finances like these days? If you have the cash flow to invest in building out another revenue stream, go for it! But you don’t necessarily need to have tons of cash on hand to be able to grow to scale. You can also scale up with the help of investments from outside investors.
And finally, it may be the right time to scale up if you dream of creating something even bigger than what you’ve already established. So go ahead and chase those dreams (with the proper planning and preparation of course).
7 Ways to Scale Up
1. Expand Your Market Geographically.
Once you’ve reached a certain level of business in your geographical target market, it could be time to move forward into a new region. This can be done through exploring new wholesale accounts in other regions as well as via expanding internationally online. If you do go the digital route, keep in mind that this isn’t as easy as turning on your shopping cart for worldwide shipping. You’ll have to really dive into everything it takes- including regional-specific marketing and advertising, payment types and currencies.
2. Venture into E-Commerce.
After you’ve achieved a strong wholesale business, it’s a good time to start thinking about selling direct-to-consumer online. A successful e-commerce shop of your own means you’ll be able to enjoy your own well of customer data, more precise branding and increased profit margins.
3. Launch Your Wholesale Business.
The same is true the other way around. If your e-commerce business is solidly established, this may be the time to explore potential wholesale accounts. Think strategically, be selective and remember that it’s better to be in the right stores than in the most stores- maintain exclusivity.
4. Open a Retail Store.
Ignore the news reports insisting “retail is dead” because the industry is only transforming for the better. In fact, for the most part, it’s the bigger brands and big box retailers who are suffering most. Why? Because they continue to present more of the same and they lack a sense of “newness”. If you’re ready to open your own store, by all means go for it. Choose from a single brand or multi-brand shop and think outside of the confines of what already exists. We love what Apolis is doing with their NYC shop. They’ve based their brand and entire business model on social enterprise with production in L.A. as well as places as diverse as Uganda and Peru via advocacy projects.
5. Create a Lifestyle Brand.
You can also scale up via product extensions. Look at your business strategically and assess what should come next. Jason Wu just launched an adjacent product line at New York Fashion Week – branded phone chargers, headphones, Moleskine notebooks and Sharpies!
6. Develop a Diffusion Line.
Target another price point for the chance to reach another group of customers.
7. Get Vertically Integrated.
Start to bring elements of your supply chain in-house to gain short-term and long-term benefits such as greater control over your brand and sourcing and producing for less. You can also create a new revenue stream by manufacturing for other brands!
Need help scaling up? Contact us for personalized support for everything from team building and market entry strategy to brand extensions and CEO advice. Schedule a consultation session today. For DIY international growth strategies and support, check out our e-book, Going Global.
Social Commerce (S-Commerce) is the new sales channel brands are looking to exploit. S-Commerce apps blend the ease of mobile sales with the functionality of social networks. It became the new hot platform in China with the launch of Weiden in 2011, a platform that incorporates affiliate marketing with WeChat (like WhatsApp) in a mobile app shopping experience. This new “self-marketing” enables the consumer to share and sell products for a commission. This platform now boasts over 600 million users! There are also a host of shopping app’s in the US that are gaining market share: Spring, MallZee, Keep, StyleKick and LiketoKnowit are harnessing the power of social and mobile shopping. Did you know in the US mobile shopping accounts for over 21% of ecommerce sales? Yes- It’s time to jump on board this trend.
S-Commerce also refers to all the sales you make via Facebook, Instagram, Pinterest and other social networks. As social networks look to help you, the brand, monetize your audiences, they are also asking you to invest money and time into social advertising. So then how do you best decide which platforms to invest in? How to determine which apps are worth your time? It’s time to evaluate your marketing and sales initiatives and determine what experiments to say yes to, and where to draw the line.
- Look to distribute on social selling platforms that have robust marketing initiatives. No point on being on a platform without any users.
- Check out the requirements to be a brand on these platforms. Spring has a simple form to sign up: https://www.shopspring.com/for-brands and integrates seamlessly with Shopify, Rakuten and Magento.
- Most mobile commerce apps will need you to have an Affiliate Marketing setup. So if you are considering signing up for an Affiliate Marketing platform like Rakuten or Commission Junction, start the process now. These big platforms require you to have a strong front and backend to be able to work within their systems: http://www.cj.com/advertiser/join
- Don’t activate the sales functionality on social networks you aren’t intentionally active on. Example: you’ve linked your Shopify account to Facebook but you don’t even have a Facebook page you are building robustly.
- Don’t pay for mobile advertising if your site is not optimized for sales. This means Instagram advertising and mobile advertising for Facebook. Your website needs to be easy to navigate on mobile and the layout has to be intuitive. I suggest checking your site on your phone every few weeks to test out different pages and make sure its shoppable.
- Companies like LikeitWantit, Like2Buy, Chirpify and Soldsie have been helping brands create conversation between Instagram and ecommerce. Nothing has risen to the top as the go-to platform, but all of them are worth checking out.
- Brands like Dylanlex are creating “Shop Instagram” pages to drive traffic to one destination on a website. http://dylanlex.com/pages/shop-the-instagram This becomes an easy way to drive social images and messaging through a landing page that speaks to the Instagram user.
- Become active on networks that are actually ROI producing. Twitter is best for peer-to-peer connections, and Pinterest, Instagram and Facebook take the stage for sales conversion. Take down the platforms you are not using.
Syama’s Crystal Ball
I believe that social commerce will continue to be optimized and therefore become a market driver in sales. Websites from 5 years ago that were not built to be mobile friendly will need to be revamped and brands who are not building their brands through social networks will and are falling behind. You simply cannot and will not be successful with out cohesive messaging on all consumer platforms.
The social selling apps and platforms that will rise to the top will create their own affiliate marketing platforms to help brands onboard. Consumers will be looking to diversify their shopping experience, and will not be satisfied with only being able to find major advertisers on the mobile platforms. It’s redundant to see the same brands everywhere – so social selling apps will need to be more curated.
Brands will continue to shift digital advertising spends from desktop to mobile advertising, and integrations with apps like SnapChat and Instagram will allow for more targeted sales and discounts. Because these brands will need to adopt more sensitive analytic systems to be able to target cohorts on social; imagine if you could target users who like or open your content more than others. The tools to market via social will be akin to the email newsletter as the analytics and tools become more sophisticated.
As a brand the decisions always remain the same. When to adopt new technology, and how much time to spend on it? I remember a time back in 2008 when I was working at Barneys New York and we would meet with big brands, not naming names here, who didn’t see the value in selling online. Now look at where we are, social commerce is here to stay. Pick your platforms, build them out, and engage. Play with the new social selling apps out there and get your business ready to sell in a new way. The new integrations will likely roll out to big businesses then trickle down to API’s for Shopify and Woocommerce users. Sales and marketing strategies will need to adapt to this- so start turning the wheels!
If you are ready to implement new sales, marketing or merchandising strategies to your business then set up a consultation. Email: firstname.lastname@example.org Scaling Retail is the consulting firm for retail globally. Specializing in startup and growth stage ecommerce, brick & mortar, and wholesale.
Competition abound and you are out there trying to make a name for your brand. Its time to bust out the marketing toolkit and get the attention of your audience. Try these 6 tips on how to make your product stand out in a crowded market. If you need additional help creating a plan check out the Fashion Marketing Bootcamp– a 2 day seminar and workshop to plan the next 365 days.
- Your Last Email. Sending out an “Unsubscribe” email will notify your current list that you want them to engage with you. If someone has not opened one of your last 10 email campaigns they may not be worth having on your list.
- Get Physical. Every quarter send out a postcard or notecard to to all of you current customers. Don’t make it full of sales copy. Just a quick hello to show them you care.
- Loose Lips Friends. Ask your friends the next time they go shopping to ask if the store carries your brand. Little hints like that will get a store employee to google your name.
- Advertising Trick. Use images of influencers and bloggers in your products for advertising. Potential consumers love to see that your products are relevant.
- Pinterest: Take an already robust board and convert it to a sale converter by having all your products for sale on your boards and periodically dropping the prices in a “flash sale”. This will automatically put you at the top of the notifications.
- Dress people. Don’t just think about gifting celebrities think about dressing public speakers, and those in the limelight who may not be as obviously famous.
Most of all, have fun, try lots of marketing experiments just make sure to have your metrics and goals outlined.
Need help? Schedule a consultation! Email Hello@ScalingRetail.com
I originally wrote this post for The Storefront. If you are not familiar with them, they are the place I suggest all my clients check out when doing a popup shop.
Pop-up shops should be part of a robust 360° marketing strategy for any emerging brand. However, for businesses who are just dipping their toes into the physical retail world, selecting what to sell in a brick-and-mortar shop can be a daunting decision. This post is geared toward small businesses who are fired up and ready to activate a pop-up shop, but not sure how to manage inventory and product assortment offline.
Identify the purpose of your pop-up shop
Before you start planning your pop-up, hone in on the goals you want to achieve with it. This will help you pick the right product and structure your marketing efforts. For example, if you are using a pop-up to launch a new collection, you may not want to bring a lot of old sale merchandise. Similarly, if you are hosting a sample sale, keep full-price merchandise at home. Just because you have inventory doesn’t mean you need to put it all out at the same time. Be strategic and base your assortment on the goal of your pop-up shop. Need a place to start? Here are some common pop-up shop goals:
Test new items and collect pre-orders
Move old inventory
Launch new products and collections
Co-brand and develop partnerships
Build relationships with new and existing customers
Evaluate your marketing efforts
Taking stock of your marketing efforts can help in planning inventory. Why? Because you’ll need projections and expectations around how many products you might sell. Start by estimating your demand. If you expect low turnout, you won’t need to produce additional products. The more you know about how your marketing efforts are being targeted, the better you can prepare on the backend. For well-marketed events focused to your niche, expect a 5-20% conversion rate on people attending who will spend.
For this step, ask yourself the following questions:
How many people am I expecting to attend my pop-up shop?
Do I expect cross-over audience from a co-branded partnership?
Do I have a robust list of customers who have purchased from me before?
Managing your inventory
Before you decide to produce new product for your pop-up shop, it’s important to evaluate your existing inventory. Ask yourself:
How much existing product do I have? Is it enough for the space I have allocated? On the smaller side, you might be stocking a shelf in another store for a shop-in-shop. On a larger scale, you might be looking at an empty storefront with 650 square feet of space. Either way, do some quick math in your head to assess your products against your rolling racks, shelves, and other displays. Decide if you have enough product or if you need to rope in another brand collaborator to make use of the space you have. As a rule of thumb, you can expect to fit between 20-30 items (depending on size) for a rolling rack that is 75 inches in length.
Do I have my bestsellers on hand? Your bestsellers are the products that your customers love. Maybe you can reintroduce older bestsellers or market items with special “bestseller” signs or tags during the event. Customers love to see and buy popular items—make them up if you don’t have any!
Can I pull inventory from my ecommerce site or dead stock? Having full-price and sale items together can be enticing for existing and new customers.
Assortment planning is the process of evaluating your products based on viability of selling. Each season, you’ll get better at creating the products your customers want and pricing them correctly with minimal markdowns. For brand new businesses, however, assortment planning can be challenging. Depending on how much planning you have done in the development of your collection, you might need to rethink your line planning. To make sure you’ve planned effectively, consider the following points:
Fashion vs. basic items. Fashion items are trendy seasonal items that are hot for a short period of time. They are the first to either sell out or be marked down. Basic items are season-less; they are the staples of a brand and rarely get marked down.
Sizing is essential. If you are selling clothing, follow the 1-2-2-1 model per style and scale up from there. This means one small, two mediums, two larges, and one extra large. If you already have selling history on your sizes, use that as a template.
Margin development. Understanding how profitable your products are is essential. Your margin is the net profit on each item after you consider the costs and labor that went into creating it. Have you built in your eventual markdowns and sale pricing? Not all products have to adhere to a 2.5x markup from wholesale to retail. Some might only get a 2x markup and others 3x or even higher. Use your competitive matrix to figure this out.
Round out your offering. If your brand specializes in a particular item (like how Bonobos initially only offered one kind of khakis), then you need to focus on selling that one item. If you are selling a collection, then it’s important to make sure you are offering a wide assortment. In a casual survey of one of my classes at the Fashion Institute of Design & Merchandising, I asked how many tops and bottoms students had in their closets. One student had 13 tops and only 1 pair of bottoms! That doesn’t necessarily mean that all fashion brands should only be producing tops, but think strategically about what your customers need and your value proposition.
There’s a lot to think about when planning a pop-up shop. Often times, success is a combination of marketing, product development, and planning. For a new brand, this can be a lot to digest. Use these tips and your insight into your customers’ needs to create an inventory management and assortment planning strategy that will maximize your profits and keep shoppers coming back for more.
3. Create fun and catchy opt-ins. I love what Pura Vida does for their brand. If your brand isn’t taking a casual attitude, find a style that does the same trick.
4. Referral marketing. Sign up for a platform like Referral Candy, there are lots like them, and start implementing referral marketing with the people who are already customers. They refer a friend to the site, and they get 20% off their next purchase. Clean and easy. Let your customers do the work for you.
5. We talk a lot about driving traffic through digital means, but what about in person. Your customers deserve a 360° brand experience. If you do a pop-up shop, sell at a flea market or do any time of selling that is live bring your iPad and incentivize your captive audience to sign up on your email list.