Smarter growth: how fashion brands are protecting margin without losing momentum

Growth at any cost is out of fashion. But was it ever truly in?  In today’s market, resilience matters more than hype, and for fashion brands, margin is the clearest signal of that resilience.

Margin is the difference between genuinely sustainable growth and numbers that just look good on paper. For DTC brands, the real challenge isn’t choosing between growth and margin—it’s achieving a balance between both.

Margins can be squeezed from many directions, but three challenges consistently stand out:

1. Rising customer acquisition costs

Acquiring new customers has never been easy—and it continues to get harder and more expensive. In 2024, the average cost of search ads climbed by 13%, meaning brands are paying more to reach the same audiences, often with shrinking returns.

2. The challenge of returns

At the same time, shoppers still expect free shipping, fast delivery, and easy returns—all of which chip away at profits. Returns are a particularly painful issue for fashion brands, with online apparel return rates reaching up to 30%. Although return fees are gradually becoming more common, brands that have introduced them to reduce high return rates have often been met with customer frustration.

3. Tariffs, pricing, and cross-border complexities

Cross border ecommerce remains a key growth lever, but it’s also becoming increasingly complicated and costly. For example, brands selling into the U.S. have to deal with tariffs that wear away on their already thin margins. Raising prices to cover these costs risks alienating customers in a highly competitive market, while absorbing the costs hits the bottom line directly.

These pressures are forcing brands to scrutinize their margins and find ways to protect them, without slowing growth.

When growth turns into overhead

In fashion ecommerce, growth typically brings added layers: more markets, collections, launches, channels, currencies, and languages. These are all signs of a brand expanding—but they can also introduce complexity. 

From managing launches in multiple markets to coordinating product drops and navigating returns, operational friction adds up fast. What may start as rapid growth can quickly turn into overwhelming overhead if systems and workflows can’t keep pace—making progress feel like one step forward, two steps back. Plus a complex ecommerce stack can lead to a costly total cost of ownership. 

That’s why many fashion brands are rethinking how they scale.

The shift to smarter operations

But it’s not all doom and gloom. What we’re seeing is a shift toward smarter growth, meaning growth that is more measured, sustainable, and intentional.

Rather than chasing top-line numbers at any cost, more brands are investing in ecommerce technology stacks and workflows that help them run leaner. They’re looking at operational bottlenecks and asking themselves: What’s slowing us down? Where are we duplicating effort? How do we scale without adding unnecessary complexity?

This is especially true when it comes to channel performance. Whether it’s DTC or fashion wholesale, brands are under pressure to deliver personalized shopping experiences across every touchpoint without adding layers of manual work or adding headcount.

 And in today’s market, that also means delivering a true omnichannel experience. Over 70% of customers engage with multiple channels before making a purchase. The brands protecting profitability are the ones connecting the dots between every channel, so a shopper that’s visiting a store, and checking out online (or vice versa) experiences one seamless, efficient journey.

But delivering that kind of experience requires more than just good UX. It means having the right infrastructure at a brand’s core. Many ecommerce platforms were not built to handle the speed and scale at which today’s brands operate.

But delivering that kind of experience requires more than just good UX. It means having the right infrastructure at a brand’s core. Many ecommerce platforms were not built to handle the speed and scale at which today’s brands operate.

Smart growth > fast growth

The era of growth at any cost is fading, making way for a more strategic approach: growth that is profitable, resilient, and mindful of margins.

Brands are looking for ways to test and learn, experiment with discounting strategies that don’t cut too deep, and launch campaigns quickly without rebuilding every time. More than ever, fashion brands are proving that profitable, sustainable growth doesn’t mean compromising speed or creativity. It means moving with purpose, scaling in ways that don’t drain resources, and keeping the customer experience front and center.

It also means focusing more on the customers they already have. Loyalty and retention are a fundamental driver of growth. Even a 5% boost in retention can drive 25% higher profits.

Fashion has always moved fast, and the pressure isn’t letting up anytime soon. Costs are climbing, expectations are high, and staying ahead is harder than ever. But the brands thinking long-term, investing in smarter systems, and making strategic moves are the ones positioned to win.

Because scale is still very possible, it’s just not about how fast you grow—it’s about how well you grow.

Discover how Centra is empowering fashion brands to scale smarter. Join Jenny Xu, Centra’s Product Marketing Manager, on Inside Commerce’s podcast as she dives into global market trends and what fashion brands need to do to stay ahead of the curve.