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Sep 13, 2021
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Supply chain issues leading fashion brands to implement price hikes that could drive customers away

Published
Sep 13, 2021

Rising supply chain costs are pushing fashion brands to hike prices but, according to a new report from GlobalData, significant increases could drive customers away as the critical holiday period approaches.  


Price hikes could push consumers away at a critical moment in fashion brands' recovery - Photo: Sam Lion/Pexels

 
The last few months have seen apparel brands and retailers tentatively set out on the road to recovery following the disruptions caused by the Covid-19 pandemic. However, many are now facing a number of issues that are rocking their supply chains, including shipping delays, HGV driver shortages, price gouging from carriers and freight lines, and surging infection rates leading to factory closures in manufacturing companies in Asia.
 
In reaction to these problems, some brands have resorted to passing some of their increasing supply chain costs on to their customers. UK-based JoJo Maman Bébé is one such brand, having raised the price of its products for the first time in five years due to shipping costs that have quadrupled in a matter of months.

As pointed out by GlobalData apparel correspondent Hannah Abdulla, though, this is a risky strategy.
 
“The issues being experienced in the global apparel supply chain are significant, there is no point downplaying it,” she explains. “However, it’s crucial that clothing brands recognise they are short term issues, and that drastic action shouldn’t be taken to hike prices at a time when shoppers will be more sensitive to them.”
 
In particular, Abdulla highlighted that many consumers hurried to take advantage of relaxed traveling restrictions earlier this year by booking the vacations that the health crisis had deprived them of in 2020. Having shelled out on travel, a number of these consumers are now reassessing their budgets as they head into the holiday season, making them particularly sensitive to increased prices.
 
For this reason, raising prices “really should be a last resort”, according to Abdulla. “Doing so could see customers lost to competitors offering the same or similar at lower prices,” she concluded.

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