Fashion E-commerce Growth Levers and How to Use Them

You want to drive e-commerce growth for your fashion startup. Ultimately that means increased profit, but there are so many growth levers involved that impact your profit. How do you know where to start?

If you’re not familiar with the term, we call them growth levers because you can pull on different ones in order to drive growth, to make your profit machine perform more effectively. Let’s break down these e-commerce growth levers, and then we’ll give you some ideas about how to use them to improve your business!

Picture it as a formula

We’re going to need to do a little math to figure out the right growth levers for your fashion startup! In its simplest form, profit is calculated by revenue minus costs. 

Now we’ll split this into two parts that you can have an impact on: driving increased revenue and lowering costs. We’ll start by looking at driving increased revenue for growth.

Increasing revenue

Revenue is a function of the number of new customers you acquire, how much they spend, and how often they come back and purchase again. These are each e-commerce growth levers that you can pull to drive growth for your fashion business!

Acquiring new customers is probably one of the more common levers that you’d consider. More new customers making purchases obviously means more revenue. 

This can be broken down further. Focus on acquiring more quality visitors to your site and improving the conversion rate of those visitors. Increasing visitors to your site is relatively straightforward. You can drive this growth through marketing channels like social media, events, PR, and email. 

You can try to improve your conversion rate by testing landing page copy and imagery, offering different promotions, streamlining your checkout process, etc. This takes a lot of A/B testing and tweaking, with constant opportunities to optimize your conversion rate. Your conversion rate will also vary from channel to channel (email should have a higher conversion rate than ads, for example), so the allocation of your budget and time across your channels will also impact your conversion rate. 

Spend per customer is a really interesting growth lever to think about. It’s also defined as “average order value” or “AOV.” This doesn’t just mean increasing your prices (although if your margin is super low or your unit costs increase for some reason, this isn’t out of the question). 

It also means increasing how much each customer buys, or their cart size. Get creative here! For example, try to package products together, like a set of three tees, or a top and bottom set. You can also run promotions like “buy one get one half off” or spend $100 get $10 off” to get your customers to purchase more in one sitting. Think about what you can upsell as add-ons when someone is ready to purchase, like an accessory that complements their outfit order. Even offering free shipping with a minimum spend can help increase cart size! 

Retention rate is a powerful lever that often doesn’t get enough attention. You may have heard that it’s cheaper to retain a customer than it is to acquire a new one. 

Think about all the time and budget you spend reaching and educating a new customer about your business. You can skip all of that and get one of your existing customers to make a purchase for a much lower investment since they are already familiar with your brand. 

Retention can be improved with great customer service, email marketing, social media, and promotional offers for existing customers. Don’t forget about your customers as soon as you get them to purchase for the first time, because they will continue to be valuable for you if they’re happy with their purchase and their experience with you!

These are a lot of levers to pull, simply to increase your revenue! How do you know what to focus on? Start with where there’s the most opportunity. If you have just launched, you need to get new customers in the door before you can focus on retention rate. If you have built up a solid growth rate of new customers each month, then start thinking about what else you can do to increase your average order value. 

Reducing costs

Going back to the original equation of profit equals revenue minus costs, you should also consider how to reduce costs. These costs include your warehousing, shipping, marketing, and more. 

As you scale and become more efficient, you will probably be able to decrease your per-unit costs for operational things like manufacturing and shipping. 

Let’s focus more on your marketing costs here. As a fashion startup, your budget is likely limited, and you want to continue to improve your cost per acquisition or “CPA” over time. 

Test your ad audiences, copy, and creative to figure out what helps you acquire customers at the lowest cost. Try new channels (like new social media platforms) with the goal of discovering opportunities that have a lower acquisition cost. Make sure to leverage organic channels like PR, social media, and email to drive down your acquisition costs.  

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What growth levers have been most successful for you at your stage in your fashion startup? Let us know if you learned about some new tools for your marketing toolkit here. We’re excited to hear about the growth in your fashion startup!

Marissa Fortson
Marissa Fortson

Marissa is a consultant and advisor to startups and emerging brands on all thing brand and digital marketing. She loves working with passionate founders to launch and grow great consumer brands, with the help of creative, cohesive marketing campaigns. Based in LA, she's worked with companies like DogVacay, Disney, Sandwich Video, Harper Wilde, and NomNomNow. In her free time, you'll probably find her on a hike with her pups or on a last-minute road trip to yet another national park. Say hello to her at marsfortson.com.

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