In today’s challenging economic environment, where aspirational customer cohorts possess ample choices and diminished loyalty, fashion brands are compelled to rethink their marketing strategies. A recent roundtable discussion hosted by The Business of Fashion (BoF) alongside data science firm Ekimetrics shed light on the importance of developing sophisticated measurement techniques to effectively optimize brand marketing efforts.
In 2024, global economies are still grappling with uncertain recoveries. In the UK, economic growth has stagnated, while in the US, consumers are facing record credit card debts, which topped an unprecedented $1.14 trillion. Concurrently, China has forecasted that its GDP growth will once again fall short of the government’s targets. Despite a drop in monthly consumer price inflation in the US — the first occurrence in four years — apparel prices have unexpectedly risen, further evidencing the complex dynamics at play in the fashion sector.
In this climate of constrained spending, brands vie for the discretionary incomes of aspirational consumers who are becoming increasingly discerning about where and how they allocate their resources. A mere connection with these customers is no longer sufficient; brands must create meaningful interactions and engage them in their preferred domains.
To address these challenges, BoF and Ekimetrics convened marketing leaders from various flagship brands including Jimmy Choo, Harrods, and Frasers Group. This gathering provided an excellent opportunity for executives across the UK’s fashion landscape to discuss both the principles and the practicalities of effective brand marketing and measurement frameworks.
Since its inception in 2006, Ekimetrics has emerged as a leader in utilising artificial intelligence and advanced data analytics to serve over 50 luxury brands, alongside collaborations with multinational corporations like Estée Lauder and Nestlé. Insights garnered have culminated in critical findings, such as those presented in the companion paper, “Driving Long Term Performance with Customer Lifetime Value.”
Matt Andrew, partner at Ekimetrics, emphasised a prevalent disconnect faced by brands: while many acknowledge the importance of long-term brand marketing investments, they often cannot quantify this in terms of measurable business outputs. This uncertain terrain is prompting a significant cultural shift within sectors such as fashion, where 71 percent of executives are intending to increase their brand marketing budgets in 2024, compared to only 46 percent who plan to boost performance marketing spending.
The roundtable discussion delineated several vital practices necessary for engaging modern consumers. Here are some key takeaways from the event:
1. Accommodate Long-Term Strategic Goals with Longer Lead Times
“Brands often bear the brunt during periods of economic downturn, not due to a lack of value creation, but rather a failure to demonstrate this value with the right metrics,” reflected one attendee. The necessity to consider longer lead-times when assessing performance cannot be understated. Brands must evaluate how various consumer cohorts have interacted over extended durations.
2. Adjust KPIs to Measure Lifetime Value Effectively
The conversation highlighted the need for a more streamlined approach to setting key performance indicators (KPIs) — establishing metrics such as lifetime value, brand equity, and short-term sales. These North Star metrics should guide all marketing efforts and encourage a culture of innovation needed to maintain brand relevance.
3. Align Product with Brand in a Culture of Product-First Paths to Brand Discovery
A notable shift observed by attendees is the increasing inclination among younger consumers to adopt a product-first mindset. Here, brands that effectively bridge their product offerings with their overarching brand promise stand to gain loyalty and recognition amidst an ever-increasing competition for attention.
4. Create Rewards and Loyalty Programs
Understanding customer behavior through data analytics is paramount. Attendees noted that focusing on customer segments is vital for retention; for instance, recognizing that the fourth purchase hits a crucial threshold for many clients has been a game changer for developing targeted loyalty strategies.
5. Explore Diverse Marketing Tactics to Avoid Over-Reliance on Content Creators
Influencer marketing has proven successful for many brands, yet there lies a risk of diminishing brand identity when relying excessively on such figures for visibility. While content creators can amplify reach, it’s essential for brands to solidify and communicate their unique identity beyond influencer partnerships.
The insights shared at this roundtable reflect a coherent narrative across the fashion industry: evolving measurement techniques in brand marketing is not just a necessity. It is vital in fostering long-term consumer relationships, optimizing marketing investments, and ensuring sustainable growth in an unpredictable economic landscape.
In an era of changing consumer dynamics and economic uncertainty, brands that prioritize authentic engagement and a robust understanding of their metrics will undoubtedly be positioned better to cultivate customer loyalty and achieve enduring success.
