In the last few months you will have heard a lot about inflation, devaluation, the value of the dollar or the bank run. And you have probably been scared more than once by concepts that may sound somewhat strange and with which you are not used to working.
We know that Argentina is cyclical: we have had inflation for decades and every few years it restarts and shuffles the cards again. And as you may have heard thousands of times, in every crisis there is an opportunity.
We are going to start this article by giving you peace of mind: take a deep breath! Next I’m going to share some ideas to overcome this moment and learn to protect yourself from future crises so they don’t catch your business off guard.
How economic instability impacts the fashion market
It has a very special feature: prices are established only at the time of the collection launch.
So in turbulent years like this, having February prices in the month of or July becomes obsolete. But what can you do to prevent this from happening again?
1- Work in shorter seasons
My first recommendation is to work in shorter seasons which, in addition to bringing novelty more frequently to your clients, will help you adapt the price to the ever-changing context.
If you fixed a price four months ago, with a devaluation of about 50%, it is likely that you can barely cover the direct cost of the product. And, how do you pay salaries, electricity, rent and other fixed expenses?
2- Plan bimonthly collections
My second recommendation is to start planning bimonthly collections, for example. If you are about to launch the spring-summer collection, you could launch a collection preview, in 45 or 60 days and then a Christmas special, for example.
This way you will make it the third launch period with prices according to what is happening at the end of this year.
3- Communicate new messages
It is key to be able to transmit the values of your brand that distinguish it from the competition and that give added value to your customers. For example, the product durability with messages like “I invested in this classic jacket that will keep you warm for many more winters”.
In this way you are teaching your customer to value your products while you show him that you are making an investment and not an expense.
4- Generate new low-priced products
So that the consumer is encouraged to invest. Use creativity to complete your usual offer. Also, check your stock, see what products have been stopped for a long time and offer them with differential prices.
5- I included an extra benefit before the purchase
Such as free shipping from a certain purchase amount (which is less than your usual minimum) and for a limited time.
This way you are going to be tempting the consumer, offering him extra benefits and although you are going to be lowering your price a little, you are going to maintain a sales cycle that allows the financial wheel of your business to continue turning.
6- Encourage yourself to invest
Remember that the value of money today is greater than the value of money tomorrow. With cash in hand, encourage yourself to invest in basic financial tools (such as fixed term or lebacs) or you can even save in foreign currency and gain an advantage over inflation.
These are some of the options you can take in the face of a crisis, but I also encourage you to do not put aside your creativity to generate differential ideas that attract a frightened consumer unwilling to part with their money.
Ideally, Learn to protect yourself from changes in the context and anticipate. Keep an eye out for economic and political newsI built a financial back that serves as a cushion to cushion crises and above all Modify work and production habits to gain flexibility that allows you to react quickly to changes in the context.
Soon I will delve into these points and share more tips. Don’t miss them!
If you have a fashion brand and not yet, you can try the Tiendanube platform for free for 15 days. Cheer up!
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