The Extreme Sport of Overcoming Fashion Business Problems with Technology

 

In the dynamic world of fashion, emerging markets present both exciting opportunities and unique challenges. Fashion entrepreneurs are faced with a peculiar set of obstacles that can seem insurmountable. However, with the right strategies and technological solutions, scaling a fashion business in these regions is not only possible but can be highly rewarding. Our own fashion brand – fitted, has recorded gross profit levels of over 40% despite high inflation and several operating hurdles. We can help you too

Understanding the Challenges in Emerging Fashion Markets

Before we dive into solutions, it’s crucial to set some context. While this article addresses specific challenges plaguing emerging markets fashion businesses, none of these issues will be new to experienced fashion designers located anywhere. The only special element to consider might be that these challenges are more pronounced in emerging markets like Nigeria, India, Pakistan, Indonesia, Ghana etc.

 

Let’s start with shedding light on some specific hurdles fashion businesses face in emerging markets:

1. Capital Constraints

Using Nigeria as an example – economic growth doesn’t always mean, fashion startups don’t face funding hurdles. And generally speaking, many countries aren’t entirely happy with their growth rates. A number of issues plaguing fashion businesses are:

• High interest rates: Bank loans often come with 20-30% interest rates

• Limited venture capital: In 2022, only 1% of VC funding in Nigeria went to fashion startups. We were one of them :’) 

• Cash flow issues: Balancing inventory costs with uncertain demand is a constant struggle.

2. Production Bottlenecks

While manufacturing prowess is a sign of industrialised nations, many emerging economies do not have the same level of sophistication in their manufacturing capacity. Take Nigeria’s manufacturing sector for example, which contributes only about 9% to the GDP, reflecting limited local production capacity:

• Skilled labor shortage: Finding and retaining skilled tailors is a persistent issue. It’s become a prayer issue for many – needlessly

• Power supply: Frequent power outages disrupt production schedules.

• Quality control: Maintaining consistent quality across orders is challenging.

 

3. Distribution Hurdles

With accurate addressing of locations still in its infancy and logistics costs are quite high, e-commerce penetration in an economy like Nigeria sits at just 35%, creating a unique distribution challenge:

• Logistics: Poor road infrastructure increases delivery times and costs.

• Trust issues: Cash on delivery is still preferred, complicating cash flow.

• Returns management: Handling returns efficiently is often overlooked but crucial.

 

4. Price Sensitivity

With Nigeria’s inflation rate hitting 50% in April 2024, and fuel costs increasing by ~200%,  consumers are increasingly price-sensitive:

Competition from imported fast fashion. Wink wink, China!

– Balancing quality with affordability

– Managing production costs to maintain competitive pricing

 

5. Customer Expectations

We all know the loudest barkers pay the least.  Many consumers in emerging markets like Nigeria often have high expectations, often not matching their budgets. Yes, we shade customers too!

 

Demand for rapid turnaround: Customers expect custom orders in unrealistically short timeframes. Why are you asking for a custom made agbada in 24 hours and you’re only willing to pay $20

– Alterations and adjustments: Frequent requests for free alterations eat into profits. Often when customers mislead brands about how much weight they’ve gained, or what sizing they were to begin with

– Payment delays: Late payments from customers strain cash flow.

 

6. Fabric Sourcing Dilemma

In many markets, brands have to buy small amounts of fabric for collections, with no visibility on if they can tee the fabrics again. Lagos, Africa’s largest fabric market, Balogun Market, offers a vast array of textiles, but that doesn’t solve the problems of:

• Inconsistent supply: Popular fabrics may be unavailable on subsequent visits

• Minimum order quantities: Suppliers often require bulk purchases, straining cash flow.

• Quality control: Ensuring consistent fabric quality across batches is challenging.

Tech-Driven Solutions: Leveraging Fitted for Growth

To begin, organizing your business starts with a great system and platform. Brands in more developed markets have things like Shopify, WooCommerce, Magento and others. For emerging markets fashion, Fitted is the go-to platform for solutions tailored to peculiar challenges unlike any other. Let’s explore how!

1. Financial Tools

• Get serious about your numbers: As creatives its easy to fall into the craft of loving the product. Running away from your numbers is like running towards financial ruin. The first step is making the decision to be more serious about your finances from your creations. Both your designs and your bank account are important.

 

• Profitability Metrics: Track key financial indicators to make data-driven decisions on your products. Not only should you push products that customers love, you should also be able to push lovely designs that are highly profitable to you. Fitted lets you track profit per order using our app

 

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• Cash Flow Projections: Visualize current expense and revenue status with our dashboard. We auto calculate Gross Profit for you based on your orders in real time. Its up to you to fill the tool accurately to get the most out of it

• Loan referral service – high volume brands who turn over in excess of 1,000 per month or $50,000+ will be contacted by fitted. With our fintech partners, we support in preparing and filing for loans to grow your business 

1. Production Optimization

Whether you outsource your production or not, it’s a great idea to track both your experimental samples and your paid orders. We understand how quickly you might run low on cash when you’re tweaking a vision for a collection. Or when you stock up on a popular item you know customers like. 

Our app offers comprehensive solutions to these problems with 

• Order Management: Streamline workflows from product details, to customer info, measurements and even automate delivery. Research shows that on average, there are up to 50+ order information details required for an optimal process flow of a custom clothing order. For example, Measurements(1 – 54 inputs), Invoice details (1-4 inputs), Customer info (up to 6 inputs) 

• Quality Control Checklists: Ensure consistency across orders. You may want to reach use these guidelines we set up. Download our free Quality Assurance Report Template for inspection of products before delivery.

• Tailor Performance Tracking: Monitor individual tailor productivity and quality. You can do this by ensuring you assign each order to the specified tailor. This is a premium subscription tailor app pro, which launches in late 2024. If you have over 15 tailors and would like to have this solved for you, book a call with our fashion operations department here. 

2. Distribution Enhancement

Many might have faced the utter misfortune of dealing with dispatch and last mile delivery issues. We got the best in the world delivery companies like Bolt, DHL, to offer rides in over 100 cities via fitted for you and your customers

• Delivery Integration: Connect with local logistics providers for streamlined shipping.

• Returns Management: Simplify the returns process for both you and your customers.

• E-commerce Integration: Easily list products on multiple online platforms.

3. Pricing Strategies

– Cost Analysis: Break down costs per item to inform pricing decisions.

– Dynamic Pricing: Adjust prices based on demand, seasonality, and competitor analysis.

– Bundle Offerings: Create attractive package deals to increase average order value

4. Customer Relationship Management

– Automated Communications: Keep customers informed about order status.

– Booking System: Manage custom order requests and set realistic timelines.

– Customer Insights: Analyze purchase history and preferences to personalize offerings.

5. Smart Fabric Management

– Digital Inventory: Track fabric stock in real-time, set reorder points.

– Supplier Network: Connect with verified suppliers, compare prices, and place orders.

– Usage Forecasting: Predict fabric needs based on historical data and upcoming orders.

Success Story: Some of Our Brands

 

Adebayo Oke-Lawal, founder of Orange Culture, leveraged Fitted to scale his operations:

 

“Fitted helped us streamline our production process. We reduced fabric waste by 30% and increased our on-time deliveries from 60% to 95%. The customer management tools also helped us better handle custom orders, reducing last-minute rush jobs by 50%.”

 

## Actionable Steps for Nigerian Fashion Entrepreneurs

 

1. Conduct a thorough audit of your current operations, identifying key pain points.

2. Invest in digital tools like Fitted to address these challenges systematically.

3. Build a network of reliable suppliers and production partners through platforms like Fitted.

4. Educate your customers about your processes to manage expectations effectively.

5. Continuously analyze data to make informed decisions about inventory, pricing, and production.

 

We are available for a free consultation call to help walk you through some tips to enable you to operate better. Book a consultation today, and certainly sign-up on our tailor brand app to turbocharge your business.

Conclusion: Embracing Tech for Sustainable Growth

Scaling a fashion business in Nigeria is challenging, but with the right tech tools and strategies, it’s achievable. By leveraging platforms like Fitted, fashion entrepreneurs can transform obstacles into opportunities for growth. From efficient fabric management to streamlined production and enhanced customer experiences, technology is the key to unlocking the vast potential of Nigeria’s fashion market.

 

Are you ready to revolutionize your fashion business in Nigeria? Explore how Fitted can help you overcome local challenges and scale your brand effectively.