Fashion Merchandising:  Product Launch & Phasing Strategy

Fashion Merchandising: Product Launch & Phasing Strategy

Written by Sufiana SharuddinDecember 16, 2019

Fashion Merchandising:  Product Launch & Phasing Strategy

In fashion, timing is key. To fully optimise a merchandising strategy, a retailer has to know the exact time to launch a new collection, start a promotional cycle or expand into a new market. 

If a collection is launched too early (or too late) in the season, it may result in missed sales opportunities. This leads to bigger challenges such as overstocking or high markdowns. 

Product newness is one of the biggest factors that affect cash-flow. In the age of peak convenience as a result of online shopping, today’s generation of shoppers demands instant gratification.

However, clothing development and production is still a relatively slow process. 

The typical go-to-market timeline to produce a new seasonal collection is between three to six months.

Fast fashion brands like Zara and H&M invest millions of dollars into speeding their supply chains to keep up with the fast-moving trend cycle and consumer’s short-term needs.

Credits: Unsplash @kishor93

Planning and managing newness launches are no easy feat, especially in today’s highly competitive e-commerce landscape.

Some retailers have opted to shorten gaps between their product launches, moving towards six times launch a week. 

Missguided is a clear example.

fashion merchandising: Missguided's new-in count by week.
Missguided’s new-in count by week. Source Omnilytics Dashboard

Here, you can see Missguided’s launch strategy in the span of a year. Seen in the chart above, the varying shades of blue boxes indicate the dates Missguided launched new products on a weekly basis. 

In May of 2020, Missguided launched a total of 439 new in the first week.

Discount Phasing and Launch Strategy

To understand the dynamic shifts in their merchandising strategy, we analysed the phasing patterns of two major fast fashion retailers, Zara and Missguided.

Merchandising Strategy: Comparison of Zara's, Missguided's and new-in and discount view
Comparison of Zara and Missguided’s new-in and discount view. Source Omniytics Dashboard

In the example above, we can see the differences in launch strategies amongst the two retailers.

Zara conformed to the traditional seasonality and only launched a large amount of newness in July to September, during the transition from Summer to Fall seasons.

Its discounting strategy also tied in with mid-year and end-of-year sales as we see a high number of new discounted items in December ’19 and June ’20 respectively.

Missguided’s merchandising strategy, on the other hand, is much more robust with new-ins and markdowns fluctuating throughout the months.

Majority of the newness was launched in October ’19, March ’20 and June ’20, while high markdowns were executed from October to December 2019. 

New-in Analysis

New-in analysis for Zara and Missguided.
New-in analysis for Zara and Missguided. Source Omniytics Dashboard

A deeper analysis of new-ins allows retailers to track the exact day of the week when a competitor launches new products.

As seen in the heatmap above, Zara launches the most products on a Thursday. Similarly, Missguided launches on Tuesdays and Thursdays, although there are some variations. 

Part of the reason why retailers tend to launch products mid-week is due to online traffic increasing significantly on Wednesdays. In fact, studies show that Wednesday and Thursday are the best days to send promotional newsletters because of higher click rates.

Markdown Tactics

Markdown analysis by Zara and Missguided
Markdown analysis by Zara and Missguided. Source Omniytics Dashboard

Zara adopts a similar strategy for deploying markdowns. As seen in the chart, Thursdays and Fridays are the most common days Zara deploys its discounted SKUs.

Missguided, however, has a less structured approach to its markdowns with varying launch days across the month.

Taking a deep-dive at analysing Missguided’s discount phasing strategy shows that it commonly launches new discounted items from Wednesday to Friday at a shallow range from 10% – 29%.

A weekly view of Missguided's discounting strategy
A weekly view of Missguided’s discounting strategy. Source Omniytics Dashboard

Missguided’s general markdown approach is to launch frequent discounts leading to wide depths of discounts online.

At the brand overview level, its total discounts span from 1% to 69% off with the highest concentration of products within the 10%-49% range.

Ongoing discounting strategy by Missguided
Ongoing discounting strategy by Missguided. Source Omniytics Dashboard

Key Takeaways

We can see how different fast fashion retailers deploy product launch and discount phasing strategy.

Zara’s merchandising strategy is clear – when it is launching a large number of new-ins, it markdowns little and vice-versa.

Whereas, Missguided opts for a dynamic approach with its merchandising strategy that is tailored according to the needs of the company.

For retailers with a strong offline presence, discounting too often can lead to a diluted brand image and negative impact on profit. E-tailers, however, have the flexibility to be more dynamic with their markdowns. These discounts are often deployed in various ways such as special discount codes or themed discounts.

From getting the timing right to identifying the right products, there are many considerations for the perfect launch.

The key to this, and to gain a competitive advantage, is by having real-time fashion market insights to analyse and track the movement of new-ins and markdowns of competitors. This allows you to make informed decisions and react in a timely manner to changes within the market.

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