Growth in business is bliss and shows that hard work pays off. When your fashion business is not experiencing growth, it has a way of dampening the spirit and making you want to give up but it is at this point that you should strive harder to succeed.
There are various business growth strategies you can apply to your fashion business to take it to the next level and we delve into them with our Fashion Business Growth series.
The only strategy that is guaranteed to fail is not taking risks. – Mark Zuckerberg, Founder, Facebook.
Last week, we looked at the first 2 business growth strategies; Market Penetration and Market Development. Today, we shall focus on the next 2 growth strategies;
- Product Development.
The product development business growth strategy involves selling new products to your existing market. It means expanding your product line or adding new features to your existing products to increase sales and profits.
Selling your products to your existing customers is way easier than having to learn and sell new products to new customers at the same time, so entrepreneurs that take this route usually focus on selling to existing customers. This strategy, however, does not box you only within the circle of your existing customers as you can also sell these new products to new customers.
Fashion entrepreneurs with small businesses can benefit hugely from this growth strategy as helps to pique a renewed interest in your fashion brand from your already existing customers. So, if you are experiencing a lull in sales or profits in your business due to your styles being outdated, now the time to expand your product line.
For example, if you are a leather footwear designer, as a way of adding new features to your existing products, you can begin to make footwear using ankara or aso-oke fabric or putting little ankara detailing on your footwear to make them stand out. As a way of expanding your product line, you can begin to make leather and ankara handbags and backpacks to draw a renewed interest in your products from your existing clients.
If you are a bridal wear designer, you can add new features to your bridal gowns by mixing other fabrics, like aso-oke, in your bridal dresses to make them unique just like DressMyCloset did.
As a small fashion brand, in product diversification, you can either choose to
- Expand your product line by developing and introducing new products.
- Add new features to your existing products.
- Update features of products when the old ones are no longer in vogue.
With the product development growth strategy, it will be easier to phase out weaker products and introduce newer versions of them to your loyal customers. If you choose to try this growth strategy out, always remember that pre-expansion market research must be carried out to avoid failure.
Also, to successfully implement this strategy, you must be capable of quick responses to market changes and trends that call for changes in your products. So, in expanding your product line or introducing new features to your existing products, pay attention to trends and be careful to follow those that speak to your target audience.
The diversification growth strategy involves selling new products to new markets. It is the riskiest of all growth strategies because it is similar to starting from scratch. To be successful with this growth strategy, you have to plan carefully and carry out extensive market research to determine if customers in the new market will like your new products.
Sometimes, this growth strategy might be the only way for your business to experience a breakthrough if sales are slow and profit is non-existent. For some fashion entrepreneurs, selling new products to a new market does not necessarily mean moving your business out of the fashion industry, it just means changing the fashion products you sell and your target audience.
The feel you will get from using the diversification growth strategy will be similar to how you felt when you started your fashion business as it involves a substantial investment of time, money, manpower, and other assets.
When it comes to business growth, there are 2 types of diversification:
- Conglomerate Diversification.
- Concentric Diversification.
1. Conglomerate Diversification
This type of diversification is done when your small business suffers from limited opportunities in its current product line. It might mean venturing into other businesses that are completely unrelated to fashion to increase the profitability of your company and its growth rate.
For example, if you are a fashion retailer that sells female clothing items, you might decide to diversify and open a small interior decorating business that has nothing to do with fashion. These two very different business lines but having them both will increase profitability.
2. Concentric Diversification.
This is the type of diversification that involves adding products that are related to your current products or adding markets that are related to your current market. Since this involves you going into something that is not completely outside of the fashion industry, it is way easier to do.
For example, if you make men’s clothes and you diversify into making men’s beard oil, men’s shoes, and so on, this is concentric diversification using related products. If you instead decide to go into making men’s energy drinks and exercise equipment, this is concentric diversification within the same target market.
Even though many see diversification as a marketing strategy, it is a very effective growth strategy when done right despite the high risk it involves.