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It’s been a week since the collapse of Silicon Valley Bank (SVB). It’s likely that if you’re running a business, regardless of industry, you watched it unfold in real-time. We’re still learning about the implications of this event - the second largest bank failure in US history. While the bank’s collapse seems to have mainly impacted tech startups, fashion giants like StitchFix and Etsy were also impacted. The whole ordeal brings to light memories of the recent past and questions on how to survive as a business in uncertain economic times. With the potential for turbulence to last a little longer in the banking industry, it’s not a bad time to take stock of your overall business strategy.
Today we’re sharing a few key strategies that any retail fashion brand with physical stores can implement to increase sales and customer loyalty, and thus the chances of not just surviving, but thriving, during an economic downturn:
Get value-oriented about your products
As Business for Fashion put it, "Like many recent economic woes, SVB’s collapse can be directly linked to high inflation... [And] the inflation threat hasn’t gone anywhere". During a recession, customers tend to focus on getting the most value for their money. But this doesn’t mean they’re turning to things that are fast and cheap. In fact, it often means the opposite: Consumers are willing to spend more for quality, since general spending is limited, and therefore people are much more intentional about where and how they shop. The takeaway here is that retail brands can lean into the value of products to maintain consumer confidence, whether it’s their functionality, high quality, or sustainability.
Focus on customer experience
Customer experience can be a key differentiator for retail fashion brands in a cooling economy. Repeat customers come back not just for products, but for experiences. This is an opportunity for brands to build relationships and add value by offering personalized services, like appointments for styling, in-store events, or other engagements that make customers feel seen and valued. Communicating beyond the store creates room to build a strong connection with clients and better understand your customers’ needs. Brands can use repeat business to help weather a recession, and every time someone buys again, it’s building a bond for the future. By creating an omnichannel strategy that fits your brand, you can build and maintain customer loyalty that can stand the test of time. One place where many brands can start is with clienteling. Today, clienteling has modernized to local, conversational outreach between your retail team and customers. This usually happens via text or email, after a customer has created an account with your brand. This adds a personalized layer to your brand’s overall marketing strategy, and keeps you in customers’ thoughts.
While the tech startup industry may be asking some existential questions right now, the positive impact of technological progress on society as a whole is still undeniable. When it comes specifically to the retail industry, technology has helped fashion brands reduce costs, improve efficiency, and reach new customers in creative ways. Most brands today are already invested in e-commerce platforms, social media marketing, and other digital technologies to better compete in a challenging market.
However, brands with physical stores can also use technology to strengthen customer loyalty with a holistic Customer Data Platform (CDP). A CDP gives your brand the ability to access real-time data across all of your online business tools, from point-of-sale and marketing apps to support tickets and appointment scheduling. More importantly though, a good CDP will unify this data to offer your team robust customer profiles that they can leverage for building and maintaining customer relationships at scale. It’s tools like these that retail brands can leverage to maximize sales. Currently, there are brands earning more than 180k monthly doing so. Who can afford not to try?
Explore fresh revenue streams
Embracing the reality of an economic downturn brings the opportunity to indulge in innovation. And who knows your customers better than the teams behind your brand? Ask them about your customers’ current pain points with regards to attaining greater trust. You may find answers that offer the next big step for your business, whether it’s a subscription service, expanding into new product categories, clienteling, or partnering with other brands to reach new customers. In being clear about how your brand solves problems, you may find your brand creating new solutions.
The collapse of a major bank is never easy to watch, but we may be able to hold our breath that, at least for now, the fallout appears relatively contained. The takeaways, however, should be spread far and wide. For a retail fashion brand with multiple stores to thrive in economic uncertainty requires careful planning, team collaboration, innovation, and a willingness to adapt to changing market conditions. By focusing on product value, prioritizing customer experience, leveraging technology, and exploring new revenue streams, retail brands can and should emerge stronger regardless of economic headwinds.