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Fashion Entrepreneurship Essentials
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Business Model Canvas
A strategic management template for developing new or documenting existing business models. It's a visual chart with elements describing a firm's value proposition, infrastructure, customers, and finances. Fashion startups use this to quickly iterate and validate their business ideas.
Pop-up Retail
A trend of opening short-term sales spaces that can last for one day or several weeks, usually for launching a product or testing a market. Fashion startups benefit from pop-up retailing by creating buzz, testing products, and interacting with customers without committing to a long lease.
Value Proposition
A promise of value to be delivered and a belief from the customer of value that will be experienced. For fashion startups, a unique value proposition sets them apart from the competition and clarifies why customers should choose their brand.
Scalability
The capability of a system to increase its total output under an increased load when resources are added. Fashion startups must design their business models to be scalable in order to grow and meet increased demand efficiently.
Brand Equity
The value premium that a company generates from a product with a recognizable name compared to its generic equivalent. Brand equity is critical for fashion startups, as a strong brand can command higher prices and customer loyalty.
Cost of Goods Sold (COGS)
The direct costs of producing the goods sold by a company. In fashion startups, keeping COGS low is important for maintaining a healthy gross margin.
Fashion Forecasting
The prediction of mood, behavior and buying habits of the consumer at particular time of season. It is useful for fashion startups to tailor their designs and stock levels according to upcoming trends.
Return On Investment (ROI)
A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. For fashion startups, ROI can be used to measure the success of marketing campaigns, choice of fashion lines, or business strategies.
Gross Margin
A company's total sales revenue minus its cost of goods sold, divided by the total sales revenue, expressed as a percentage. It represents the portion of each dollar of revenue that the company retains as gross profit. For fashion startups, a higher gross margin indicates more efficiency in turning raw materials into income.
Crowdfunding
A method of raising capital through the collective effort of friends, family, customers, and individual investors. This approach is useful for fashion startups to fund their projects without giving up equity or incurring debt.
Influencer Marketing
A form of social media marketing involving endorsements from influencers, people and organizations who possess an expert level of knowledge and/or social influence in their respective fields. Fashion startups often partner with influencers to reach target audiences effectively.
Customer Lifetime Value (CLV)
A prediction of the net profit attributed to the entire future relationship with a customer. Understanding and increasing CLV can help fashion startups focus on long-term customer relationships instead of short-term sales.
Dropshipping
A retail fulfillment method where a store doesn't keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. Fashion startups can use dropshipping to test products without holding inventory.
Sustainable Fashion
A movement and process of fostering change to fashion products and the fashion system towards greater ecological integrity and social justice. For fashion startups, it's important as consumers are increasingly looking for eco-friendly and ethically made products.
Supply Chain Management
The management of the flow of goods and services and includes all processes that transform raw materials into final products. In fashion startups, efficient supply chain management can reduce costs and speed up delivery to market.
Direct-to-Consumer (D2C)
A retail strategy where the manufacturer sells directly to the end consumer, bypassing traditional retail channels. For fashion startups, D2C can increase margins and provide better customer data.
User Experience (UX) Design
The process design teams use to create products that provide meaningful and relevant experiences to users. In fashion e-commerce, good UX design can drive sales by making shopping intuitive and enjoyable.
Lean Startup
A methodology for developing businesses and products that aims to shorten product development cycles and rapidly discover if a proposed business model is viable. This approach is highly relevant for fashion startups as it can help test market trends and styles before a full launch.
Market Segmentation
The process of dividing a broad consumer or business market into sub-groups of consumers based on some type of shared characteristics. Fashion startups can focus their resources on specific market segments such as eco-conscious consumers or luxury buyers.
Minimum Viable Product (MVP)
The version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort. An MVP is essential for fashion startups to test the market without investing in full-scale production.
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