How fashion brands can stay ahead

Fashion brands today face challenges that are completely different to even five years ago. Even some of the biggest global fashion brands with huge marketing budgets are struggling to get their sales (in consistency and value) to where they were before the pandemic.

Why relevance matters most

The core requirement for all fashion brands is staying relevant to customers.

This may sound obvious, but Australian brands are now competing for wallet spend in a global marketplace. Customers are shifting away from familiar brands in favour of options that better align with their needs; driven by factors like price, quality, service, scarcity or overall appeal – Country Road is a good example.

To succeed as a fashion brand, the customer base needs to be wide, loyal and deep enough to consistently buy your products. This enables a brand to build a reliable business model that makes financial sense and have the ability to take some chances along the way without causing too much damage to cash flow.

The ongoing shift to digital marketing, via social media, has changed everything. Brands with a clear message and strong relevance can operate with lower costs as they rely less on physical retail presence. They can redirect more investment into acquiring and retaining customers through enhanced customer experiences while maintaining full margins over longer periods and volumes, boosting profitability and creating a competitive advantage.

The key question is: how do you attract enough of the right customers and stay relevant to them?

Finding your niche

Take golf brands targeting middle-aged men, they’ve identified a specific audience and built products that reflect what those customers want and are familiar with. Other sports brands are using this in reverse by entering the golf market. This shows how niche targeting can work, however not all brands succeed and selling golf fashion continues to face challenges, even if from personal bias, it never goes out of style.

While most of the market is moving away from fast fashion, younger consumers remain concerned about waste. At the same time, they’re spending less time in major shopping precincts; and ultra-low-cost platforms like Temu are putting pressure on traditional retailers.

Success means finding a niche you can stick with, one that brings in enough steady customers to break even, then build on that momentum next season. Sometimes this means making your premium designs or products more scarce to make them appear more valuable and desirable, but not so scarce it damages the business return. Chrissie Amphlett, an early rebel fashion icon, once hinted at the fine line between pleasure and pain, a sentiment that still resonates in fashion and culture.

Premium vs volume strategy

High-end brands create desire through limited availability, they make products feel exclusive and extract a higher margin for that privilege. In the middle market, brands need higher sales volumes to stay viable—but they also need a sense of scarcity to stay relevant and avoid being seen as just another cheap option, which would mean lower margins and a push for even more volume.

The goal is to make customers want to buy from a brand for its relevance (pricing, value, service and scarcity), not just because it’s the cheapest option.

The import advantage

Stella Artois is a great example, seen as a basic beer in the UK, but considered premium in Australia (according to BWS), largely because it’s perceived as imported, even though it’s mostly made locally. It shows how the same product can hold very different value depending on the market.

Today’s brands really get their customers, they know what matters and how to connect. They target specific groups with products that really connect and use tailored messaging to those groups via social media. Meanwhile, some older brands that haven’t moved as fast or as well to maintain relevance are losing market share. Even brands that were successful have not been able to maintain their position, the number of craft beer businesses that are failing is testimony to that.

The attention challenge

We’re living in what you could call the “Netflix age” – customers have unlimited choices and short attention spans. Twenty years ago, UK brands weren’t easily accessible to Australian customers, so there was natural scarcity. Now you can buy almost anything online and have it delivered.

If customers find a brand they trust, they tend to stick with it. But brands that lose relevance get replaced quickly because customers can easily find alternatives.

We’ve seen this play out in Australia with established brands that were popular decades ago now struggling, and new failures happening regularly. Even those that once found success haven’t been able to maintain their position.

The bottom line

Having a good product isn’t enough anymore. Brands need to constantly understand who their customers are, what they want, and how to make them feel special and heard when buying.

Many brands from the 1980s and 1990s, such as JeansWest and the Mosaic Group, are failing. Others, like Myer, are consolidating by acquiring brands such as Just Jeans, Dotti, Portmans, Jay Jays and Jacqui E. But that consolidation is also proving difficult to manage profitably.

If brands cannot adapt, they face tough competition from thousands of others. The market swiftly indicates whether a brand’s strategy is successful.