Brands across the fashion and beauty industries are looking for ways to cut back their spending. But when choosing what to cut, payroll, operations and inventory expenses are less likely to be on the chopping block. At the beginning of June, Glossy surveyed 22 workers from fashion and beauty brands, most of whom were director-level or above, about where their companies are allocating their spending. According to the results, marketing is the No. 1 thing brands are spending less on.
When asked, “Where has your company reduced costs in the last six months?” 68% of respondents said marketing, making it the most common response among options. Payroll was the next most popular response, with 32% of respondents; followed by inventory, technology and stores, which were tied; and, lastly. innovation. Notably, 23% of respondents said they hadn’t cut back on any costs in the last six months.
Ryan Glick, the CEO and founder of experiential marketing agency CNC Agency, said the biggest driver of brands cutting back on their spending is a pervading sense of uncertainty. CNC Agency works with major fashion brands like Prada and Hermés and specializes in splashy in-person events.
“Between inflation, the political climate, shifts in consumer behavior and an unpredictable retail environment, brands are tightening budgets to protect margins,” Glick said. “On top of that, many are still recovering from post-Covid over-hiring or overproduction and are now under pressure to operate leaner.”
Glick said the return on marketing spending is often less measurable than investments in stores or inventory, for example, which have a direct relation to sales, which is another reason for marketing cuts.
“Marketing, though I don’t always agree, is often the first thing to get cut, especially when brands haven’t built a strong performance or attribution model around their spend,” he said.
Instead, more brands are relying on their wholesale partners to do their marketing for them, according to Katie Moro, global director of managed services at the product data feed company Productsup. Productsup works with major brands and retailers like Sephora, Puma and L’Oréal.
“Marketplace dependency has led to many fashion brands leaning into wholesale or marketplace strategies, where the platform handles much of the demand generation,” Moro said. “This reduces the brand’s need to invest in top-of-funnel marketing directly.”
So what are brands increasing their spend on? Glossy’s research found that brands are investing in influencer marketing and affiliate programs, even as they cut back on general ad spending. Sixty-four percent of respondents said they increased their investment in influencers in the last six months, and 32% said they upped their spending on affiliate marketing. Fifty-five percent reported having invested in AI capabilities, which could include marketing and other AI initiatives.
Courtney Fisher, an influencer expert with the influencer marketing software company Grin, said investing in influencers can be a smart move as long as brands do it the right way.
“Influencers cut down on the need for costly production,” she said. “Brands are seeing lower CPMs and stronger revenue lift when creators are paired with affiliate programs or their content is reused across paid, e-commerce and other key channels. But it has to be treated as a real strategy, not a one-off. When creators are properly briefed and measured like media, the ROI is clear.”
