Fashion in Crisis: 6 Merchandising Best Practices
Strategic merchandising is the only way to get out of the Covid-19 slump.
In a recent webinar featuring Sarah Johnson, founder of Flourish Retail and former head of merchandising at Asos, Johnson shared the ‘new’ set of practices for merchandisers in navigating this crisis.
Merchandising in a Crisis
Identify the ‘Gap’
The first thing you have to do is assess how far off-target your sales currently are. The next course of actions will be dictated by the size of the gap.
Re-forecast Based on Current Market Data, Not Historical Patterns
Previous trading patterns will not be sufficient in an unprecedented event. More than ever, it’s important to re-forecast sales for the worst-case scenario.
It’s better to overestimate than to come up short.
Take Account of Exit Margins
The key to mitigating losses is adjusting your margins. Having a clear understanding of not only intake margin but also the net margin is vital in protecting the bottom line.
A big part of this contingency plan includes discounting.
Find room to modify margins and alternate between deep discounts and shallow discounts.
Adjust Opening Stocks and OTB
Supply chain disruptions will cause inventory issues and affect product phasing. Break apart the product range and find opportunities to re-allocate held stocks to the next season or push more investment into products with faster rates of sale.
E-commerce is Now the Priority
With non-essential businesses unable to operate physically, e-commerce is paramount to survival.
The shift to online shopping will likely continue even post-crisis, so ensure fulfilment and distribution centres are able to accommodate this.
Keep a Close Eye on Your Competitors
E-commerce will be saturated as more brands move online. Other brands are likely to be discounting too, ensure prices offered are on-par with competitors.
Constantly adjust pricing according to market changes – the trading season will endure peaks and throughs, the key here is to price optimally during a peak to gain higher margins.
Remain calm and harness your merchandising skills as much as possible.
Avoid knee-jerk reactions such as cancelling stocks or liquidating your entire inventory.
The best way to weather this storm is by being flexible and trading methodically.
You might also like
Top Fashion Retailers in Southeast Asia
As markets around the world continue to be impacted by the pandemic, Southeast Asia thrives. Sales have plummeted in the UK and US, but international sales increased by significant margins for Asos. Meanwhile, e-commerce in the US got a major boost from cross-border trade, lifted by 42% from last year. In other words, the emerging […]
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 […]