Creating A Bestselling Assortment Strategy Every Time
In today’s highly competitive retail environment, every brand and retailer needs a strong assortment strategy to stand out from the pack.
Just like in any segment within retail, the product is king and this is especially true in the fashion industry. Investing in the wrong products will not only lead major overstocking problems but also brand dilution, wasted resources and disappointed customers.
Beyond just curating the right products for your shelves, the assortment strategy is tied to multiple functions in fashion retail including inventory management, visual merchandising, marketing and promotions.
Therefore, it is important to ensure your assortment strategy is aligned with consumer needs and optimised for the current market.
Monitoring market movements helps you to understand in-demand products or potential trends that resonate with your customers.
Here are three key considerations for your future assortment planning.
Identify and Validate Top-performing Trends
Building an assortment in an industry with ever-changing trends is challenging, as it can be tough to separate top-performing trends from short-lived fads.
From designers’ runway creations to the latest influencers’ and celebrities’ social media postings, the understanding of what’s ‘trending’ isn’t always so straightforward.
Therein lies the issue.
Identifying a trend is only half the equation. Validating it makes the other and is arguably the more important half when it comes to attaining sales and profits.
Introducing a particular product into your assortment with a baseless assumption that it will sell could potentially lead to plenty of deadstock at the end of the season.
So how do you validate if a trend truly one that’s selling?
Aside from leaving the house for essential activities, today’s consumers prioritise comfort over anything as they stay sequestered in. Especially with much of work and studying taking place online, categories like suits have now grown irrelevant while loungewear takes precedence.
As seen in the chart above, demand for joggers began to rise in late March coinciding with the stay-at-home order in the US and UK. Although its popularity fluctuated during the period of analysis, joggers consistently outperformed the wider pants & leggings category that was on a downwards trend.
This pair of orange joggers from Urban Outfitters was first stocked in February. Up to August, we can see the product had been sold out 20 times and soon followed by a new round of replenishment despite its higher than average price and having no discounts to drive up purchases.
By studying the stock movement of key trends like joggers, you will be able to pick out the trends from the fads, based on product performance.
Action Plan for Declining Trends
Top-performing trends are one thing, declining ones are an entirely different issue. When it comes to planning your next collection, understanding the performance of trends over a specific timeline is crucial.
Trends shift quickly so knowing which stage a particular trend is at in its life cycle will help you determine your next steps. In this case, if a trend is declining, you can immediately start hashing out the best exit strategy without resorting to high discounts.
Animal print is an example of a declining trend, as the once-popular pattern has been slowly losing its prominence within the span of a few months.
As shown in the graph above, animal prints commanded higher demand at the beginning of the year but began declining in Q2.
In this case, there are three scenarios:
- If you are still in the planning stage of your assortment: determine if this is still worth the investment by the time you launch your collection. If not, it is probably best to look toward a trend that is moving upwards.
- If this particular trend is already in its production phase: look towards pricing strategies and perhaps lower its entry price.
- If you are currently stocking this: start clearance early at an optimum discount range to ensure profits.
Understanding this is crucial to help you avoid investing in a trend or product assortment that is tapering off in popularity.
Establish the Right Cross-market Assortments
Knowing your market is essential but it gets increasingly complex when you want to target other regions. No two markets are the same, so being able to firstly understand how certain trends perform in different markets will allow you to identify what your customers are looking for so you can accurately meet their demands. This is especially helpful if you’re expanding to new markets.
Zara, a popular brand available in multiple regions, is a great example. Focusing on the US and France alone, there are already distinct differences in trending categories and colours, even with a similar number of total products.
While both had the same top five categories, the percentages of contribution differ greatly. The data shows that tops and outerwear were top categories in both countries, however, Zara US had a higher share of tops at 4,192 versus Zara France’s 4,058. The contribution of outerwear also differed for both countries by 1%.
Aside from tops and outerwear, dresses were the third most stocked category in Zara France, making up 9% of the total assortment. The same category was last in the US, at 8% of the total assortment.
The colour distribution chart by category chart shows the differences in seasonal colour palettes between the two countries in July of 2020.
As seen in the first row, blue was the main seasonal colour at Zara US, dominating nearly 17% of the total assortment. It was followed by pink at 7.7%, brown at 7.4%, green at 4.6% and lastly, yellow at 3.7%
Over in France, similar colours appear again, however at different contributing percentages. Brown that was previously the third-highest contributing colour in the US, is beaten by green.
The differences also continue in category allocation. The three key categories in brown for Zara US are shoes, outerwear and tops whereas brown in France is represented by shoes, bags and accessories.
With just these two examples, it’s clear that each market has distinct preferences across regions, in spite of being the same brand carrying the same products.
At the same time, we can also see similarities between the two countries which indicate universal trends that are accepted across the board such as blue and pink.
Cross-market analysis such as this can especially helpful when trying to determine local consumer sentiments. By studying the variance between the two assortments, you can understand which trends work for all markets versus local consumers only.
The Keys to a Bestselling Assortment Strategy
In summary, the three steps to developing a bestselling assortment strategy, every time are:
- Identify and validate top-performing trends – Determine if viral trends are really performing by studying stock movement.
- Strategise for declining trends – Avoid trends that are losing prominence and if it’s already in your assortment, plan your exit strategy to drive up conversions.
- Establish the right cross-market assortments – Decipher which trends are universally accepted versus local market preferences.
You might also like
Back-to-School Retail Fizzles Under Pandemic Pressure
As one of the biggest shopping periods in fashion, back-to-school harboured hopes of an economic boost for many retailers. Last year, back-to-school saw consumer spending surpass $80 billion, second only to the holiday season. But uncertainties in the new schooling calendar and weak consumer spending will likely result in a more muted affair than retailers […]
Holiday Retail 2020: Predictions and Demand-driven Strategies with the Parker Avery Group
This year’s holiday retail will be unlike any the industry has ever experienced. As the biggest annual shopping period, the holiday season accounts for 20% of retail sales each year. But for this year, after a tumultuous period of economic downturn, a boost in consumer spending is highly anticipated. That said, retailers have to exercise […]
The Evolution of The Luxury Fashion Market
The luxury fashion market is in for a demographic transformation. As consumer behaviours are shifting towards a more digital and experiential trend, luxury brands are realising the need to reinvent themselves. Just a mere decade ago, the premium market was dominated by baby boomers and Gen X – those born after the World War through […]
Fashion’s New World Order Powered by Tech
The pandemic has had repercussions far beyond retailers’ revenues. During the lockdown, nearly every facet of the fashion industry was brought to a standstill. From manufacturing to media, social distancing threw a major wrench in fashion’s roadmap. Unlike other industries that have been quick to adopt tech innovation, fashion had grown accustomed to the conventional […]
How to Remove the Guesswork from Trend Forecasting
Before Covid-19 upended the world, the industry often resorted to the same fashion trend analysis methods to gauge market demand. Trend forecasting services like WGSN are typically used to guide the fashion design and buying processes, leading to the homogenised state of the fashion landscape. There are also other common methods used, such as… Historical […]
Top Global Online Fashion Marketplaces
The increasing convenience of online shopping paired with the new social distancing norms has culminated in the rise of online fashion marketplaces. In a time where many retailers are struggling to survive, marketplaces like Asos and Amazon have emerged even more profitable than before. Asos announced it had surpassed $1.2 billion in revenue after experiencing […]