Clothing Retailers Must Not Neglect
With the increase in fashion fads and awareness of the fashion industry, many retailers have encountered different challenges in maintaining their brands in the highly competitive fashion market.
Below are major challenges facing in fashion industry
Dynamic Customer Needs
Fashion awareness has greatly increased because of social media, blogs and forum discussions. Customers’ fashion interests can change very quickly, making it difficult for fashion retailers to produce according to the demand. If a fashion retailer searches the Internet, they will find wide variations that would appeal to customers’ needs. It may be worth conducting comprehensive surveys, fashion market research, or engaging in online discussions to understand customers’ needs and expectations.
Visibility in the Market
Competition in the fashion industry has become more intense, not only with the rapid evolution of fashion trends but also due to the multiple channels reaching out to customers. To stand out from the crowd, product differentiation is the biggest challenge that fashion retailers have been constantly facing.
Using the Omni channel Approach
Omni channel retailing is the utilization of different channels in a customer’s shopping experience. Some of these channels include social media, mobile and mobile app stores, traditional retail stores and other methods of customer transaction. Fashion retailers collect information and create better planning strategies and inventory decisions by considering business trends, forecasts and the interrelationship of the business on a global scale down to the different functions of the retail process and to the store.
The whole idea of an Omnichannel, both for the retailer and customer, is the research before purchasing. Many believe that, through an Omnichannel approach, inventory costs will reduce while sales and customer service will increase bringing maximized profit margins.
Using this kind of method is easier said than done. The result varies depending on the level of channel synchronization. There are some who cannot even synchronize their traditional advertising in the print catalogue with the integration of new processes in the digital catalogue. There is also a budget limitation within fashion retailers that hinders them from adapting to new channels in approaching the customer shopping experience. Every other process is always a work-in-progress and, most of the time, the expectations of consumers outpace the ability of fashion retailers to deliver a steady omnichannel experience.
The Growing Popularity of Online Fashion Stores
Fashion retailers with bricks-and-mortar stores are now being forced to compete with online retailers. More young women prefer to shop online since that way they can enjoy ‘shopping anytime, anywhere’. Also, online retailers often offer comparable fashion products at lower prices as they do not have to pay the rent of physical stores.
Rent is one of the problems faced by many small and large fashion retailers with physical stores. The price of office and commercial space is increasing rapidly, making it hard for them to meet the expenses without having the brand quality suffer. Some have opted to rely on online marketing, mostly on social media, to build their brands. In fact, a good reputation on social media can actually translate into better sales.
Apparel Inventory Management
Most fashion fads are seasonal, can be unpredictable, and tend to have a short lifespan. Many retailers try to empty their store inventory quickly by effective price setting and still meet the profit margin. Discounted prices are given after the seasonal fashion trend slowly declines and when most people are no longer interested in buying them. This cycle has always been a challenge for fashion retailers, especially with the evolving trends within the fashion vertical.
Keeping up with the latest and current trends is not the only problem faced by fashion retailers with regard to clothing inventory. Having relevant historical data based on demand changes by season, year, location, promotion, and event, help fashion retailers to accurately plan product allocation, pricing, assortment, and new product replenishment. However, due to evolving fashion trends, retailers in the fashion industry are constantly releasing new items that were not sold before, giving them no data on history of supply and demand, and the possible outcome of selling the products.
It is necessary for fashion retailers to have a strong fashion sense and the ability to predict fashion trends in order to create a strategic sourcing plan.
Forecasts in fashion retail industry depend on economic trends. Economic factors, such as global recessions, increase in personal income, interest rates, and job growth play significant roles in the fashion retail industry and consumer spending.
The increased price of raw materials for cloth production, rising labor costs, and customers’ decreasing purchasing power has yielded lower profit margins for most fashion retailers. Some were forced to collaborate with other brands to broaden their customer reach, and merge with or acquire other fashion retailers in order to grow their share.
Due to their economic constraints, consumers are more vigilant about the prices set on each product, and they have easy access to the Internet to compare pricing information. Fashion retailers are aware that people would rather spend time browsing on the Internet to look for clothes with the right price than spending hours strolling in the malls. Thus, fashions aficionados are not only limited to the availability of the market nearby but now have access to a wide variety of outlets with the help of the Internet. Access to this information has made fashion retailers more sensitive about setting their prices.
Technology has paved the way for consumers to be more aware of the fashion industry. However, this awareness has led to both positive and negative effects for fashion retailers. Their constant struggle to understand the economic market of fashion and consumer behavior, competing within the market, and meeting the demands of the latest and current trends in the fashion industry; have become more complicated with the rise of the internet and social media. This does not mean that there is no solution to these challenges. Constant research and application have always been the first and foremost defense for fashion retailers in this competitive field.