In the cost of living crisis, should fashion brands tighten their belts?
Brits, just like the rest of the world, are feeling the pinch of the cost of living crisis as inflation, the war in Ukraine and rising energy costs continue to weigh down the nation.
We’ve seen the most hard-hitting effects of the crisis on the cost of essentials like food and fuel. Another sector that has seen a swift change has been the fashion industry, with clothing brands seeing a 2% year-on-year decline in sales, and a month-on-month drop from July to August of 11%.
With a quarter of Brits saying they intend to reduce their spend on new clothes and accessories, the foreseeable future does not look good for fashion retailers.
Not-so-fast fashion?
Fast fashion giants such as H&M, Asos and New Look have all seen their rankings fall in Opinium’s Most Connected Brands index, with most dropping out of the Top 100. Luxury brand Gucci fell nine places, to just outside the top 100.
Perhaps unsurprisingly, though, budget fashion brands are seeing a resurgence. Low-cost fashion retailer Primark has climbed 10 places in the last year. The brand has been busy: it launched a new online shop (having previously only operated in brick-and-mortar stores); it collaborated with the high street bakery chain Greggs on an unlikely yet viral fashion collection; and it saw a 59% rise in sales in the first half of the financial year.
Similarly, Asda’s in-house clothing brand George rose in the ranking by 10 places. The low-cost brand has invested in upping its game in the last year with a change in leadership, a collaboration with Netflix on a fashion and lifestyle range, and using inclusive advertising (namely women with stretchmarks modeling its lingerie range).
Fashion and homeware retailer Matalan jumped up 14 places in the last year. The brand is undergoing a digital transformation, modernizing its online store and relaunching its customer rewards program under the new name ‘Matalan Me’. The brand has even gone as far as to directly help its customers ease the financial burden of the crisis, launching a competition which would cover one winner’s energy bills for a year.
Points for sustainability
One brand has seen a jump in its ranking despite not being the most wallet-friendly. Heritage denim brand Levi’s has seen the highest increase in ranking of all the fashion brands in our index, going up a whopping 21 places. The brand’s strategy this year has been not to promise low prices, but instead to focus on the durability and sustainability of its products.
The brand celebrated its blueprint jeans with the Original 501s’ 150th anniversary this year. It released a reinterpretation of the model through a star-studded campaign featuring Marcus Rashford, Naomi Osaka, Hayley Bieber, Jaden Smith and Kid Cudi, among others.
There’s something different about this relaunch of the 501s: the jeans are entirely recycled. Every pair is made from a liquified pair of old Levi’s, as the company zeros in on its sustainability strategy.
The brand also partnered with the British Council’s Architecture Design and Fashion program, which aims to use innovative design to address global challenges. And it has recently launched a campaign that seeks to give it to us straight with the slogan ‘When they’re made to last, we can all waste less. Buy Better. Wear Longer’.
Low cost vs longevity
The cost of living crisis is rapidly shifting what goes into people’s shopping basket. With food and fuel being top priorities, clothes are taking a back seat.
In order to survive – or, even better, avoid – a rapid drop in sales, brands will need to shift strategies. Be like Levi’s and convince shoppers of their longevity, or ease the financial burden as the likes of Primark, George and Matalan have done. Either way, a change is not just coming – it’s already here.
Written by Ande Gilmartin, Senior Research Manager of Opinium London
