Let's be real, 2025 has been a wild ride for beauty and fashion brands. Inflation's still biting, ad costs are up, and consumers are more selective with spending. The landscape looks different now. We're hearing from brands that average units per transaction are dipping. Customers are still buying, but they're being more strategic about it, and also spacing out purchases to make their budgets stretch further.
So what exactly are brands doing to move the needle right now? Here's what we've been seeing across the market
The Great Rebrand Rush
We've noticed a new theme emerging in rebrand conversations. Usually, brands rebrand or refresh when their customer base has evolved, the brand has matured, or copycats are closing in. But this year? We've been hearing something different. More and more, it's a margin strategy. Brands are exploring refreshes specifically to support higher price points. They're considering launching premium collections priced above their core range, or entirely new sub-brands designed to stretch upmarket. And they need the brand presence and story to back it up.
This is where brand work pulls its weight because you're crafting a value proposition that says: "Here's why we're worth it." The hard truth is that no one pays premium prices for brands that feel generic. With inflation and tariffs hitting supply chains, ad costs climbing year-over-year, brands are feeling the crunch from every direction. So it's no surprise they're looking at their brand equity as a lever for pricing power.
The Numbers Don't Lie
The margin conversation isn't exclusively for CFOs anymore. It's front and center for every founder and brand leader who wants to scale profitably. Hard decisions are being made about which SKUs businesses won't run ads for anymore, because with the new state of play and margin crunches, the numbers just don't add up. This is forcing brands to get real about what's truly profitable, digging into unit economics and making tougher calls than ever.
These tie back to the insights shared recently when we spoke at Retail Therapy in Melbourne, as part of the Life Instyle x Reed Gift Fair events, in conversations with both brands and retailers navigating these pressures.
Pictured: Effie Asafu-Adjaye, Founder of Beautiful Sparks, speaking at the Retail Therapy panel at Life Instyle x Reed Gift Fair, discussing strategies shaping retail in 2025.
Capital Efficiency Through Community
Capital efficiency is how effectively a brand can acquire and retain customers without excessive spending. Brands that invest in organic growth strategies, focusing on brand building and fostering strong community, are proving more capital-efficient than performance marketing reliant brands.
A strong brand community doesn't just lead to repeat purchases. It creates brand advocates who spread the word organically. That word-of-mouth marketing has zero media cost but often delivers the highest-converting customers. Building community takes time, consistency, and genuine value creation. But in a world where paid media is getting more expensive and less effective, it's becoming the most reliable path to sustainable growth.
The New Economics
Brands are using this period to reassess their entire playbook, from SKU rationalisation and supply chain negotiations to diversifying channels and innovating in product and experience. There's real value in using challenging times to build stronger foundations rather than just weathering the storm. Economic cycles test every business, and the brands with loyal customers, healthy margins, and capital efficiency will be the ones that emerge stronger.
If you're thinking about how to create real defensibility in your market, we'd love to explore that with you. >>Click here to get in touch<<
Author: Effie Asafu-Adjaye
Effie Asafu-Adjaye is the Founder of Beautiful Sparks. Beautiful Sparks helps beauty and fashion businesses get more fanatics in love with their brands, by refining their brand strategy, messaging, branding, content storytelling, and community-building strategy. Read more about Effie here. Linkedin.
