The Trouble with Relying Solely on Word-of-Mouth Trend Forecasts

June 21, 2018

Vicky

Today, fashion trends are driven by so many things and people that don’t necessarily make up the fashion industry on a professional level. The fashion industry is extremely volatile, as we know it to be. Trends may go as easily as they come, as this generation of consumers are extremely fickle-minded, they are constantly seeking for the newest things to have and try.

In an industry that is driven by what’s hot and new, it’s extremely important to supply the right products at the right time to consumers. But with countless references from influential blogs, and content media platforms contributing word of mouth trend forecasts; it can be overwhelming to search through this much clutter and conflicting opinions.

With that being said, one should not dismiss fashion trends so easily or even base business decisions without concrete proof. This is where data and intuition goes hand-in-hand and needs to be utilised mindfully. To elaborate on this point further, let’s take a look at this season’s contestants as 2018’s colour trends while comparing the top two ultra-fast fashion retailers: ASOS and Boohoo:

Millennial Pink

Gaining immense popularity in the Summer of 2016, the way Millennial pink took off was like no other trend. It wasn’t just happening in the fashion industry. It was a world-wide phenomenon. From restaurants, beauty products, hair, furniture, etc. There were no stones left unturned for this nudeish-salmon pink colour. Henrik Vejlgaard, a trend forecaster said that a trend usually lasts for two to five years, while a fad burns bright but diminishes after six months. Three months ago, we found that millennial pink was still a highly demanded colour. But, it’s been two years since Millennial pink consolidated its influence in the world, has the star perhaps outshined itself, or will it continue to flourish?

Omnilytics Retail Data Millennial Pink

Image Source: The Cut

Omnilytics Retail Data Millennial Pink

 

Omnilytics Retail Data Millennial Pink

 

The data above suggests consumers may be losing interest in Millennial pink.

ASOS had a slow but steady sellout rate up till April 2018. The highest sellout rate was 46.9% in March 2018. But a month later, it plummeted to 16.69%. While Boohoo’s sellout rate consistently decreased, with the highest rate at 47.2% in December 2017 and lowest at 7.47% in April 2018.

Does this mean Millennial pink is finally going out of trend? If so, why hasn’t ASOS been responding to the low level of demands accordingly? And why is Boohoo still actively pushing Millennial pink to its consumers with an immense amount of SKUs?   

Ultraviolet/ Lavender

Following Millennial pink, many searched to find a potential contender. When Pantone released 2018’s colour of the year, the question of whether Millennial pink had finally reached its demise loomed over the fashion industry. The colour was awarded the colour of the year for its ability to ideate incentive and imagination, representing what our world needs today. Sure, Ultraviolet/ Lavender ruled over runway shows such as Victoria Beckham, Proenza Schouler, Tibi, Michael Kors and many more, but does Ultraviolet/ Lavender have the potential to take over the torch from Millennial pink?

Omnilytics Retail Data Ultraviolet/ LavenderImage Source: Trendscape

 

Omnilytics Retail Data Ultraviolet/ Lavender

 

Omnilytics Retail Data Ultraviolet/ Lavender

 

Ultraviolet/ Lavender’s data suggests that ASOS consumers gained some interest in the colour but eventually lost it.   

Similar to Millennial pink, Ultraviolet/ Lavender in ASOS experienced a slow growth in their sellout rate with an abrupt increase of 45.9% in March. It also seemed Boohoo’s strategy remained the same as it did with Millennial pink a consistent increase in their SKUs despite a continuous decrease in their sellout rates.   

Gen Z Yellow

Here comes the third and final colour many presumed to be S/S 18’ trend colour. Laurie Pressman, vice president of the Pantone Colour Institute stated that trends in colour reflect the times. Looking back over history, colour silently conveys what was taking place at that moment. Generation Z has set themselves distinctly different from their preceding generations. They are identified to be more politically active and driven by change and yellow is a colour that reflects hope, joy and positivity. We have only begun to see this colour nascent slowly but surely, through social media, celebrities and music videos. Can Gen Z Yellow actually surpass Millennial Pink’s influence over the internet crazed market?   

Omnilytics Retail Data Gen Z Yellow

Image Source: Desenroladas

Omnilytics Retail Data Gen Z Yellow

 

Omnilytics Retail Data Gen Z Yellow

 

Gen Z Yellow’s data from ASOS suggests consumers are slightly more interested in this colour and are consistently purchasing items of this colour compared to Millennial pink and Ultraviolet/ Lavender.  

In comparison to the two colours, Gen Z Yellow was the most popular colour in Boohoo, with a sellout rate of 52.5% in December. But similar to the other colours, the sellout rate decreased each month with the lowest sellout rate at 10% in April.  

Why Are The Graphs So Similar?

According to data from Omnilytics, ASOS experienced a spike in March 2018 then a fallout in April 2018. It is no coincidence that all three colours would appear to be less popular just a month later. It’s important to note that March happened to be a month of breaks and holidays in the US and UK. In the US, Spring break stretches throughout the entire month of March while in the UK, Easter holidays last from March till April. By nature, consumers tend to spend more before going on holiday so it’s no wonder that ASOS experienced such high levels of sellout in March and fell so dramatically in April.

On the other hand, Boohoo experienced an all-time low in sellout rates after December 2017. The high level of sellout in December could be due to its discounting strategy 82% discounted items in December. Though it looked like Boohoo was not doing well on its own either, due to its high number of SKUs, but, when compared with ASOS’ data, Boohoo’s sellout rates were actually quite similar to ASOS.

The average sellout rate percentage for both brands were quite similar — suggesting consumer behaviours remained consistent at the bigger picture. The data above suggests Gen Z Yellow as the most popular colour this season after all.  

The Verdict

From the data gathered on Boohoo, the SKUs and sellout rates had a negative correlation. Yet, Boohoo continued increasing their SKUs. The better decision should have been to adjust their strategy according to the sellout rates from the past months and by studying their competitors’ strategies.

All three colours seemed extremely promising as the colour trends this season. There have been a great number of articles and trend reports on the respective colours, with each presuming them to be the “it” colours this season. If these resources were intended for better business decision making skills, how can one be confident in implementing their decisions and strategies with so many conflicting opinions.

We are not claiming these word-of-mouth trend forecasts as redundant but with trends changing so frequently, how can you strategise your business without knowing when the trend bubble is bound to burst? And more importantly, recognise what consumers are actually buying?  

Learn more about how you can utilise word-of mouth trend forecasts and performance data to make lucrative business decisions. Drop us an email at info@omnilytics.co and we’ll be in touch!

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 December 2017 to 30th April 2018 .