As inflation reached a 40-year high last year, one of the sectors that took the biggest hit was the Fashion industry. Almost entirely reliant on people’s spending power, online fashion retailers such as ASOS suffered an operating loss of nearly £10 million last year.
This follows data by YouGov revealing that close to two in five (44%) of UK adults have reduced or stopped spending on clothes. Amidst Britain’s recessionary climate and small businesses currently receiving less investment – according to the British Business Bank – start-ups in the arena are facing an increasingly challenging landscape. With the capital available for marketing budgets now tighter than ever as a result of the current economic outlook, mechanisms such as ‘value exchange’ – championed by influencer marketing platform, Room Unlocked – is breathing life into the marketing capabilities of brands looking to scale in 2023.
Viewed as a nonessential cost, 20% of companies in the UK have made cuts to their marketing expenses, according to a report by IPA Bellwether. With Fashion brands facing their own ‘cost of operating crisis’, ‘bartering’ or value exchange allows for brands to ascertain the most cost-effective model of influencer marketing. Through Room Unlocked’s platform, brands offer goods or services which content creators then post about, solely in exchange for receiving them as opposed to money.
The impact of this form of transaction means that Room Unlocked is able to provide the most effective form of influencer marketing, with proprietary research revealing brands save on average £7,000 per opportunity versus paying for it. In the Fashion sector specifically, brands also receive a 15:1 ROI on their marketing spend which is way above the 5:1 ratio that is considered strong for most businesses. The average engagement rate is 3.26%, making it nine times more effective than the benchmark rate for this industry, which is 0.36%.
This modern approach to marketing offers a solution to restore trust in this fragmented relationship by giving full creative autonomy to the influencer and ensures a brand’s awareness and impact is not just short-lived. In relation to traditional, paid influencer marketing, Room Unlocked has found this form of value exchange to be far more cost-effective for brands. By targeting the correct influencers that have a genuine interest in your brand, partnerships can be created purely based on passion that can then be turned into value.
Tanya Hamilton-Smith co-founder of Room Unlocked, comments on the benefits of value exchange: “Brands are being faced with their own ‘cost of operating’ crisis, meaning that they have less cash to spend on things like influencer relationships. This has led to a resurgence of what can be described as a ‘barter economy’ where brands exchange goods or services as opposed to money. The great thing about this approach in relation to traditional, paid influencer marketing is that it’s not only far more cost-effective to offer this form of value exchange, but it also helps to bring back authenticity and trust into the space.
“After receiving a product from a company, influencers are only going to share it with their followers if they enjoyed the experience that it offers, resulting in the content they post being authentic. This is similar to the approach we offer at Room Unlocked, switching generational habits by going back to the most primitive forms of trade in order to generate awareness for brands in a far more cost-effective way encouraging true transparency. Put simply, for love, not money.”
