The unpredictable retail climate will have retailers wanting to play it safe with their new season arrivals. However, consumers will want to shed their sweatpants after months indoors so investing in trend-led products will be more important as ever. How do you navigate this delicate balance?
The answer is to look to charts, analysis, formulae and numbers. While none of this sounds incredibly sexy right now, this is where market intelligence enters the game.
Market intelligence is the new merchandising. Why? Well, retail processes have been broken long before COVID-19, but the times are a-changin’. Time-consuming, old-school tasks have been revamped with cutting-edge technology, giving retailers a 360 view of the market at the touch of a button and taking the guesswork out of the decision-making for your category.
Retail is evolving. Don’t get left behind. Reach out for a demo to see EDITED in action.
What does a best-selling assortment REALLY look like?
Imagine an online store where you only sold best-sellers. A marvelous target-smashing flagship.
What would it look like?
Well, taking the data at face value, the reality is pretty bleak.
It would look like this:
…and this for womenswear….
Oh, and not forgetting footwear:
All those items are among the most popular and successful in the US and UK mass market. They haven’t been advertised as discounted and when they sell out, they get restocked and remain in assortments as evergreen products.
The truth of retail is that trends are just the tip of the iceberg. The majority of money is made on very average, normal stuff.
So, building an assortment consisting of comfy sweats, relaxed denim and sensible footwear should get you to retail nirvana. Looking at the most popular colors of best-selling womenswear in the US and UK, 27.5% of successful apparel are black. While around 40% of best-sellers are in the rather safe range of white, blue, neutral, grey or navy.
It takes a bit of bravery to see that and still invest in bold colors, right?
Then consider the charts below. They show which womenswear categories retailers are choosing to invest in. The left chart shows what’s arrived in the last three months. And the other shows which items perform best – those that sell through are consistently restocked and never discounted.
There are noticeable differences, like the much higher focus on dresses and all-in-ones in best-sellers.
It’d be fair to ask, why aren’t retailers giving an equal weighting to the categories that perform well as to the new arrivals? That’s because savvy retailing is a careful balance of giving customers what they know they want, and surprising them with things they haven’t yet considered making it important to clue yourself up on trends emerging from social media like Cottagecore, pop culture influences like music videos and the dominant runway looks.
Retail would look bleak if we only sold best-sellers
Despite the viral success of the house dress lending to the appeal of floral dresses, plain black styles are consistently outselling this print. And even as the denim market struggles amid COVID, the faithful skinny jean continues to outpace more comfortable and fashionable flared and wide-leg cuts. Safe things sell well – better than trend items in fact. But the truth is, retailers have to balance the risk between the popular basics and the trend-led product if they want an assortment that feels inspiring to shop for.
How much investment to make in trend varies from retailer to retailer. One way to gauge that is in assessing the amount of newness in a retailer’s assortment.
Last month, around 8-9% of products available at department stores such as Macy’s and Bergdorf Goodman were new. Then around 44% of H&M’s assortment was new in the last month, while Zara sits closer to 60%.
Market intelligence makes you a better risk-taker
Rather than simply using data to churn out the hits, it’s possible to use numbers to enhance creativity.
Having a full market view will help you make sure you’ve got enough of the stuff that will sell, so you can use your OTB budget for some serious fun. It can help you understand how to price something that you’ve never stocked before, and ease fears around category expansion. Data can help you queue the timing and buy-depth on that red hot trend you detect first.
Use market intelligence to live a little dangerously. In this new normal, fortune favors the bold.
For more insights on how EDITED can help enhance your everyday processes, check out our weekly Insider Briefings.
Contributions by Market Analyst, Kayla Marci.