It’s that time of year again; planning for the next year of business. I’ve been working a lot on this myself lately and thought it would be helpful to give some tips for those of you who have a fashion business and want to see it grow next year. If you’ve not started your business, or if you haven’t had any items available for sale yet, there's a similar post that's tailored to startups which you can read by clicking here.
In order to move forward, you need to look back. As a fashion buyer and retailer, I spent a large portion of my time doing this - in fact many retailers spend the whole of Monday looking through sales data. EVERY Monday. You might have heard me say before that data is like gold dust and it’s really beneficial to see what's worked, what didn't (and why) and how you can improve. You should have some sort of tracking system, where you can compare information and review. Or, if you're like me, you'll have many systems in place that allow you to review data. If you don't, start something immediately! Data tracking doesn't have to be fancy, but many websites offer advanced analytics to help with online traffic and information about your customers. If your platform doesn't have this, Google Analytics is a free and powerful tool you could use. You should of course have information on sales and as well as having the total sales figures, it’s really useful to be able to search sales by product, the profit made and any extra information on who bought the products, such as the customers ATV (average transaction value), how they found you, etc. I do this in Excel, as it’s an easier way to do the maths and a lot of reports from service providers allow you to export data as an Excel file, which means you don’t have to write everything out. The other thing I do is keep track of any feedback I've received from customers, good or bad, along with reasons for returns. Again, I use a simple Excel sheet to keep track of these. So, what should you look for in the data?
Patterns in sales, for example, identify which styles, colours and sizes were most popular. Dig deeper here, don't take numbers at face value; understand any factors that may have contributed to the results. For instance, if usually your bestselling size is a Large, but there's a particular style that sold best in size Small, look into why this is. Could it be that the style wasn't fitted properly so that people had to go down a size, or perhaps that style isn't as flattering on a fuller figure?
Requests for similar things. You do have to take customer feedback with a pinch of salt, as you can't always please everyone, but if you notice patterns in feedback that you receive from customers this is definitely something worth looking at in depth. For example, do you get requests for different lengths, sizes, colours? Or when customers return items, what reason do they give is there a problem with the fit, quality, colour?
A really important part of any product based business and growing the profitability, is increasing your average transaction value (ATV) and average transaction units (ATU). ATV is how much each customer spends on average. The higher the better, of course. ATU is how many items a customer buys from you in one purchase. If typically a customer is only buying one thing from you, you need to look at ways to increase this, usually by offering add on products. Does your product offering compliment each other as an outfit? Do you offer extra items, for instance a necklace to go with your top, or scarf to go with your coat? If not, chances are you're missing out on sales. It’s so much easier to sell multiple items to the same customer, than it is to find new customers, so the ATV and ATU can really make or break a business.
Next, when you've got useful data to use, you need to use this to improve your next range, even if you've already started sampling. Of course, there's not as much you can change if you've already started the sample stage without additional cost and most likely a delay, but you can still make changes to colours, the size range that you order and there's usually time to add accessories as these are a shorter lead time (less development and production time).
So how can you use data to improve the range?
Make adjustments as nessarsay to your size break (how many units of each style to order). If you're not familiar on size breaks there's a full blog post on that here. Using the data you’ve gathered, you can make more informed decisions on which sizes to order and the quantities.
Check the colour balance, are you giving customers the right amount of colour vs the bestselling options (usually black, white and grey)? Do you need to consider offering the same style in several colour and/or options? Could you make an item reversible, so you can offer 2 colours in one garment?
Check over the fit of your garments if you've had lots of returns of a particular style, or if you've received any negative feedback on this. It's really important to make sure the fit is consistent across the range, especially if you sell online. If customers have said their confused about the sizing, you might also want to look at updating your online fit guide.
Looking at the most popular styles from the previous collection(s), can you update them for the new range? Perhaps if a Summer sleeveless top did well, you can add sleeves for the Winter range? Or could you offer the bestseller in a new season colour? If you don't want to do something so literal, think about what it is about the item customers liked. Was it the fabric, the details, fit, shape? How can you replicate this in a new item?
Also look at the ratio of garments that you sold, for instance, how many tops vs bottoms, how many skirts vs trousers, etc. This will help you to grow your range and reduce the risk by increasing the number of items in areas that are selling well. Also consider how much people were spending and whether you're offering enough options at low, medium and high price points, whatever that may be for your brand. You need to have a solid price structure in place to generate strong sales.
The key here is using the data to make better decisions going forward. If you're growing your business from last year, this comes with increased risk and cost to produce more styles. By carefully going over data you can minimise the risk by creating a range that builds on your previous success and learns from things that didn't go so well.
Sales and Promotion
With all of the important things to consider when designing and manufacturing a range, it’s often easy to let things slip on the marketing side. But to make sales, you have to attract customers. Many experts say that you should spend only 20-30% on creating products and the rest of the time marketing them. I’m guessing that you haven’t spent anywhere near that? Honestly, me neither! But it’s something high on my list of things to fix next year. I’d encourage you to do the same and take some time before the new year to do some tidying on your website/sales channels, social media presence and also refine organisation behind the scenes. It'll set you up in good stead for the next year. What can you do exactly;
Audit your website from a customer perspective; make sure all of the links work, make sense and are relevant. Do you need to update any information, or perhaps add new features - for instance, have you considered things like currency conversion, a loyalty programme or refer a friend capabilities?
Audit your website from a business point of view. Is your most exciting and relevant content/product in a prominent place? Is this high margin product, or product you believe will be a bestseller (it should be!). Are you trying to increase your ATV and ATU by encouraging add on sales? How are you implementing this in store, or on your website - is your merchandising on point?
Are you maximising any visits to your website? For example, encouraging people to sign up for your mailing list so that you can build trust with them and get them to keep you in mind. Have you got an incentive for them to give you their email address?
Do you have a way of scheduling your content and social media posts, so that you can build a following without spending all day posting online?
As we spoke about, data is really important to have. Take the time to make sure that you've got systems in place which make it easy for you to log information. Set yourself up with Excel sheets if you don't have them already and reconsider your returns form. Checkboxes are a good way to get information on why someone returned something, as it's quick and easy to complete. Always leave space for additional comments too, you want to make it as easy as possible for people to give you feedback.
I hope this post has given you some insight into ways of building your business next year! I've covered some advanced topics here and you may be wondering how to implement them in your business. If you're considering getting 1-on-1 help, I offer a service that allows you to have your current range and ideas for expansion looked into by an industry professional. The consulting session included then gives you opportunities to ask questions and learn more about what you can do to grow your business and steps you can take to achieve success. For more information on services I provide, you can click here, or alternatively you can message me with any questions here.
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