The warmer weather is beginning to peek its head out of the snow, cold and rain. Thoughts are turning to spring dresses, cotton shirts, and other fashion finds as a new season shines upon us. While this delights consumers as shop owners bring out their spring and summer lines, for retailers, there’s still last season’s stock to contend with.
“I think fashion retailers particularly struggle with the cost of discounting and the impact this has on margin,” said Holly Leigh-Harvey, in charge of operations at Cabbage & Rose, a multichannel retailer who sells ‘quintessentially English’ fashion, homewares and fabric from their stores in London, Japan, and online. “You also have to consider how this affects your brand and what customers come to expect if you do it too much.”
The good news is today’s retailers have technology tools and platforms at their disposal to get them through the inventory balancing act each seasonal. They’re able to gain insights into their flow of product, orders, stock levels, and sales history to retain brand integrity while keeping their operation running efficiently.
Taking Advantage of Multichannel for Stock Control
Having several channels to move stock as needed offers obvious benefits. Fashion shops can make their products available to shoppers outside a given geographical area in addition to those that want to look, feel, and try on pieces in person.
Your physical stores not only serve customers in person, as showcases for your wares, but can act as distribution centers for online sales, enabling for easier, more effective physical inventory counts. When processing online orders, product can be pulled from the store with the highest product count to optimize stock levels.
Being flexible and providing numerous options for how customers want to shop and receive their items, whether in the store, buying online and picking up, or next-day delivery will benefit your stock management and sales goals while keeping your customers happy (and in style).
How to Avoid Second Guessing the Market and Your Customer
Fashion retailers have unique challenges in comparison to other vertical retail markets, as Harvey attested to. Sure, gardening centers see a spike in seeds, planters, and fertilizer when the signs of spring arise. That said, gardening lines are much more predictable and have a longer shelf life versus fashion items, which are more finite and have more fickle clientele.
You can take a more proactive approach by making use of your sales and inventory reports, and then exporting and combining them in Excel to generate a sell-through report. By calculating the percentage of products that have moved in comparison to your sales goals will let you know if you’re on track or need to mark some items to be promoted.
Tying Discounts to Creating Customer Loyalty
Okay, you’ve run your sell-through report. You’ve identified products that are not selling as expected. It’s getting close to the end of the Spring/Summer 2015 (SS15) season and orders for Autumn/Winter 2015 (AW15) are starting to roll in. Discounting to move dead stock doesn’t need to mean a knot in your gut and margin goals.
Take a step back and put on your marketing fedora. If you already have a loyalty program, great. Tap that data to identify and segment your top customers, offering specialized and personalize discounts on these products, with the added carrot to introduce them to the new season’s items coming in.
If you’ve yet to adopt a loyalty program, no problem. Going back to your retail management platform, search on and pull data on those customers that have the highest purchase and frequency levels, and segment from there. Don’t forget to tap your social analytics to include those most engaged with your brand to receive a benefit for their loyalty via your promotional programs.
Take further advantage of your role as a fashion retailer, versus gardening or hardware, by getting creative. Think about adding special events to your business mix. Put together an exclusive customer appreciation night for your loyal shoppers and followers. Have them bring their friends. While sipping a cold, tasty beverage, listening to fun music, they can pick up “great deals” on the current season while getting a sneak peek of the new season’s fashions.
Running a successful fashion business can be a labor of love, but it doesn’t have to be a struggle. By blending your business and style savvy with technology tools and sound inventory practices, you can better embrace the turn of each season and all the opportunities they bring.
Optimizing your fashion inventory is an ongoing process, and the most successful brands are constantly striving to improve. Check out their proven techniques in the white paper: "How Fashion Brands Can Optimize Inventory Season to Season."