Could the“ALWAYS ON SALE”come to an end?

The regular promotions schedule that has long plagued fashion and that consumers have come to expect may be coming to an end.

The reason: Among coronavirus’ impacts on the industry is that the off-season merchandise and an overabundance of product are set to fall off in the move to a more normal scenario.

Fashion brands and retailers are largely holding or cancelling orders of summer collections, respectively, which typically deliver in April or May.Instead (in a more realistic scenario), they’ll hit stores in the summer months of June, July and August. In turn, fall styles will drop in September and October, in step with the start of the fall season. 

Hopefully this should fix what was a messed-up fashion calendar. In fact If companies are shipping products in the month when people need them, triggering a “need now-see now -buy now” situation it might help repair the set cadence of markdowns that whilst is helping consumers to buy almost in promotions all year long, is affecting businesses margins in a huge way.

Furthermore , to eliminate liability that comes with retailers and wholesale customers canceling and returning orders, many fashion companies are forced on downsizing their collections.

The major department stores and key accounts have stopped accepting product since March.

If we dive deeper is understandable that, without company’s retail partners sending back remaining and slow sellers styles , no one would never offer promotions.

And in most cases the only items on its owned e-commerce site are retailer rejects, items with huge stock on hand due to poor sell through.

If something is not selling as expected , the big retailers are not investing in marketing.

These articles are just dumped back into the industry, and that generate the bad ecosystem that everyone is familiar with.

Another possible scenario regarding Fall-Winter collections that are usually delivered in three monthly shipments, is that they will drop in six monthly shipments throughout the remaining half of the year.

If we look further, the post Covid standstill is looking like that there will be fewer brands on the shop floor, there will be lower units on the shop floor and there will be fewer customers in the store.

With all those factors acting together, there should be a natural process to going back to a sustainable full price-to-markdown ratio.

Another possible approach by brand could be what is called SKU rationalization, because in many cases, if we look closely brands are just over-assorted.

With that process is mandatory to include a correct analysis of who a brand’s customers really are and what they’re buying,and obviously which product are most profitable in terms of margins.

In this exercise is taken into account investment in terms of marketing,markdowns,rates of return and other operational costs such as shipping cost, all with the aim of increasing sales.

The going back to an healthier retail calendar will also focus on what products first attracted customers with a high lifetime value, if we look further discounts may work to acquire first-time customers, but they don’t create brand loyalty and repeated business.

“The survival plan is moving to streamlined assortments, with high sell-through at full price”

Raffaele Felaco | 2020

Published by Raffaele Felaco

I am an enthusiastic leader with strong background in direct and indirect sales with an exten- sive experience in both retail and wholesale business. I have been fortunate to have worked alongside teams in structured environments both in Italy and abroad over the last 20 years, en- abling me to develop strong leadership skills, a natural approach in effective communication, the ability of positively influencing others and master complex business negotiations.

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