How Ultra-Fast Fashion Retailers Strategised for Coachella 2018

April 27, 2018

Yi Jun

In a span of 5 years, the gross revenue for Coachella saw an increase from 67.2 million (2011) to 114.6 million dollars (2017) as over 100,000 people – some from overseas – throng Indio, California to attend the annual world-renowned music festival.

Historically, it’s about the music and arts, as the festival features musical acts ranging from hip hop to indie. In today’s context, however, “we’re turning into a more visible society and Coachella is the modern celebrity version of the Edwardian social calendar,” says fashion historian Dirix. In other words, festival-goers’ mark their attendance via social media platforms: To be seen in one of world’s most popular festival gives you major social points.

Keeping in touch on social media is the new norm, so what you wear is an essential part of the equation… especially for such a huge event that draws influence. Design Director of ASOS, Vanessa Spence, said: “the viewpoint on festival as a season has changed. People want to dress up and plan their outfits”. The hashtag movement on Instagram has a few dedicated slots just for fashion: #coachellafashion (96k posts), #coachellaoutfit (39k posts) and #coachellastyle (120k posts).

business 2 community chart

Credits: Business 2 Community

 

According to this pie chart from Business 2 Community, fashion is also the second most popular Coachella content on Youtube in 2017, just 2% behind ‘Trip Recap’. Style editor Taylor Bennett, who has been covering the music industry for more than a decade, added that the common question to ask now would be “how will this photograph?”

How This Impacts Fashion Brands and Retailers

Fashion brands and retailers realised the significance of this. “Coachella is a way for fashion firms to connect with millennials and Generation Z,” an article on Forbes by Barry Samaha reads. Elizabeth Holmes from Vogue Australia agrees, stating that “global music festivals have disrupted the fashion lineup”, dubbing it as the “fifth moment” behind collections such as autumn and spring, where it is “a new occasion driving shoppers to stores”. In fact, in 2016, a study by WSJ reports that 8 out of 10 attendees purchases something ahead of the event, with half of the total amount spent on shoes, while two thirds were spent on clothes. Plenty of online and offline retailers prepare months in advance for Coachella – as well as other festivals – since there’s a huge demand for Instagram-worthy clothes during these event.

However, the golden question to ask these retailers isn’t “what will you prepare?” but , “how will you prepare for festivals?”

Why It Can Be Hard To Strategise

Through the decades, Coachella’s fashion is ever-changing, albeit with a few staples, such as the vintage aesthetic and colourful prints. Figuring out the right trends to push is a business move that has to be well-calculated. Some ‘Coachella styles’ do translate into Spring trends, with brands creating looks inspired by them. However, the tricky part isn’t pinpointing the exact styles, it’s to navigate your team amidst festival season by understanding its structure.

While Coachella is a great platform to push your brand, retailers that join the movement have to find the right balance between supply and demand. Stocking up on too much ‘festival-trend’ inspired clothes will be an overload, causing a potential overstock issue.

Beyond Coachella, other festivals come with their own ‘styles’ and ‘seasons’ attached. For example, some retailers may stock heavily on sequinned denim shorts, with the belief that consumers can wear them for other festivals. However, festivals in the UK almost always come with a rain forecast, in which they will then require different clothing styles. Retailers that stock up too little, on the other hand, may lose sales to other competitors. This leads us to find out how some retailers prepare…

… in a world that is ultra-fast.

International online retailers, such as Boohoo, ASOS and Missguided, seemed to have found the right answer to the equation. All three retailers have a dedicated page just for festival clothing, pushing out jumpsuits, boots, sequins and accessories.

Image Source: From right, Missguided, Missguided, Boohoo, ASOS

The 4 products above are just a few of the best-selling categories that went out-of-stock during the period of March to April. However, due to their ultra-fast nature, the key is to find a sweet spot between supply and demand. There are a few strategies that these leading online players implement in preparation for Coachella, and they are all about maximising rewards while minimising effort in a short amount of time.

How did these ultra-fast retailers strike a balance in recognising the demand for festival wear, without compromising speed?

Surprisingly, Not Many SKUs Are Added

Three categories – jumpsuits & playsuits, accessories and boots – are festival favourites that were released by ASOS, Boohoo and Missguided for Coachella. Logically, retailers would increase the number of products in order to feed the demand. For example, as shown in the graph below, Boohoo increased its jumpsuits & playsuits by 80% during the time period of March to April, weeks leading up to the event.

product assortment for jumpsuits & playsuits for asos, boohoo and missguided

 

It could be explained that Boohoo added the 80% of SKUs to compete with ASOS. However, that seemed to be the only exception. Missguided only slightly increased the category assortments, while the numbers dropped for ASOS.

product assortment of accessories for asos, boohoo and missguided

 

product assortment of boots for asos, boohoo, missguided

 

Both accessories and boots from all three retailers had similar patterns: declination and minor increments. Even if there was an increase (accessories and boots from Boohoo), the growth rate was only at 20-30%. Of course, ASOS sat higher up in the chart as they have more than 500 brands on their website.

While it may sound like the retailers weren’t prepared, stocking up in large quantities may not be beneficial in the long run. As previously discussed, festivals are a large impact to the fashion realm, but its longevity is uncertain. The decision to stock body chains or boots (especially in a four-season country) will not be ideal, as these are typically ‘festival pieces’. By the time a festival is over, retailers will either end up with a huge number of products in their warehouse, or forced to put everything on sale. By decreasing the amount of SKUs, these ultra-fast retailers will be able to better manage their stocks.

In-Stock Items Were Replenished

Another strategy that all three retailers utilised was that product categories were replenished – at least once – while they were still in-stock.

replenishment rates for in-stock jumpsuits & playsuits replenishment rates for in-stock accessories replenishment rates for in-stock boots

 

As depicted in the series of images above, most of the replenishment rates for in-stock products were the highest during the month of February and March, especially for Missguided. Boohoo, on the other hand, replenished the most during March for all categories. ASOS was the only retailer that had slightly higher rates during the month of January for boots and jumpsuits & playsuits, which could be the reason why the rest of the replenishment rates for subsequent months were lower. The high percentages meant that the products were constantly restocked, most likely in different sizes and colours. As the data above was extracted from in-stock items, the numbers also proved that ASOS, Boohoo and Missguided ensured that the products do not go out-of-stock.

Perhaps one of the main reasons why these ultra-fast fashion retailers tried to avoid out-of-stock issues was because of the high demand requested in a short amount of time. If a product goes out-of-stock, that means they could potentially face loss of sales. Out-of-stock issues may not be a celebratory factor, especially in a generation driven by speed. With tough competitors and a cohort of consumers who want things fast, online players have to live up to those expectations. The demand and supply equation needs to have the right balance that the retailer sees fit. If the demand is high, but the supply does not match: the retailer loses out in sales. On the contrary, if the demand is low, but there is a large supply: the retailer will incur additional production costs.

What’s The Verdict?

While Coachella, and many other festivals, are good opportunities for fashion brands and retailers to increase sales, traffic and brand awareness, it is also essential that the right strategies are used. Of course, knowing what to bring in – the right trends, colours and styles  – play a huge part as well. For that, you need to understand how the demand and supply system works. In fact, most of the strategies are actually down to just stocking and replenishing, but it is crucial moves like these that pays off in the future. ASOS, Boohoo and Missguided are ultra-fast fashion retailers that gave consumers what they wanted, but the smart business move is that they did it to their own advantage.

Learn more about festival trends and how to effectively strategise. Drop us an email at info@omnilytics.co and we’ll be in touch!

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The data above was obtained from Omnilytics, real-time market data platform. The numbers and statistics may vary, as the platform is updated every day. The time period of the information taken was between 1st January, 2018 to 21st April, 2018.