June 21, 2018
In the fashion business, brands and retailers are reaching out to different platforms in order to gain a footing in the industry. From multi-label retailers to e-commerce, the landscape has transformed into a global ecosystem. This is due to the shift in trends in consumer behaviour. While it is true that some countries, like Australia, have a slower retailing scene; it is not a reflection on the consumers. With technology integration, consumers are not only able to catch a glimpse of worldwide trends, but they are also able to shop directly for them too. For example, online UK label ASOS, which carries popular brands like Topshop and Monki, ships worldwide. Similarly, one of Asia’s largest e-commerce platform, Zalora, has designated websites for seven Asian countries, carrying big names like Superdry and Miss Selfridge. The interwoven system has allowed convenience, and there are even the same products available on different platforms.
How exactly is the same product strategised across different retailers?
But First, Why?
Selling on third-party sites or listing on multi-labels is one way to reach out to a wider audience. As the market is already saturated, it can be tough for newcomers to stand out amongst the crowd. Since releasing discounts is not exactly the best way to go about it, some choose to reach out via bigger platforms. ASOS, NEXT and Zalora are a few examples of these platforms that have garnered massive followings over the years. Since e-commerce removes the medium of physical stores, reaching out to multi-label retailers ensures a faster process. More importantly, selling on different platforms boosts brand image. Some multi-label retailers, such as Harrods or JD Sports, have their own brand personas attached, which attracts a specific type of consumer. Harrods is perceived as luxurious, while JD Sports relates well to athletes or sports enthusiasts.
In fact, different brand imageries impact how the very same product is priced, discounted and sold. Some retailers release discounts, others increase the price points. Some markets receive the products sooner than others, even if they are listed on the same platform.Omnilytics’ Product Match is a feature that allows products – the very same or similar – to be compared and contrasted for different brands across various retailers. To better illustrate, River Island will be used as an example.
River Island is a UK high-street fashion brand that has over 300 brick-and-mortar stores around the globe, as well as an e-commerce site. Even though the e-commerce site ships worldwide, the very same brand can also be found in ASOS and Zalora. This brings forth the obvious question: how are the same products from River Island strategised on ASOS and Zalora?
Products Resurface On Multi-Label Retailers 1-2 Months Later
After River Island releases a product, the cycle – depending on the popularity – lasts for about 1-2 months. The remaining stocks will be distributed to the multi-label retailers in hopes of clearing them off.
As seen above, the first seen date on River Island for this red heels was 29 September 2017. ASOS, on the other hand, starting selling the same product two months later, which was about three weeks before River Island’s last seen date. While River Island did not release discounts for this product, ASOS gave a 31% discount during December 2017. This explains why the product had only one sellout and replenishment rate on River Island, but a total of six sellouts and 17 replenishments on ASOS.
For the Southeast Asia (SEA) market, the same pattern emerged. For this embroidered dress, its first seen date was 4 August of last year on River Island. A few days before its last seen date, the multi-label retailer started selling the dress on its respective platform. While River Island did not release any discounts, Zalora Malaysia placed an 80% reduction, and it eventually sold out by 5 June.
To better illustrate, the same product from all three platforms are displayed side-by-side above. The image shows an animal print swimsuit that was available on all three platforms. Similarly, both ASOS and Zalora sold the product around the same time – a month later than River Island. However, for certain products, ASOS or Zalora do not always sell them simultaneously, and may receive them earlier or later.
The Price Difference Between Multi-Label Retailers
Depending on the contract between the brand and multi-label retailers, the prices may vary for the same product. The multi-label retailer may choose to increase or decrease the original brand’s pricing, and set their own discount strategies after.
In this case, both Zalora Malaysia and ASOS adjusted their prices in accordance with their strategies. From the comparison above, the suede loafers from Zalora received a 60% price reduction (from 19th March to 12th June), while ASOS (5th January to 29th June) maintained the original price. Because of individual pricing strategies, both had different sellout and replenishment rates as well. The one on Zalora Malaysia faced four stockouts and seven replenishments, while the other had only three replenishments.
Another example is this bow top by River Island, and it was discounted on both Zalora and ASOS. While Zalora increased the price point as its initial price, the current price is still higher than that of ASOS. Both multi-label retailers received the same product around November 2017, and released discounts around the same time on January 2018, albeit with slightly different strategies. ASOS set a 40% discount straight off the bat, while Zalora released minimal discounts that slowly built up. It saw a 6% reduction first, and the percentage gradually increased with time.
Same Retailer, Different Strategies
Since each market has their own consumer base, economic background and market view, the same retailer would strategise differently. This applies to Zalora as well, in which they cater to Malaysia, Singapore, Indonesia, Brunei, Taiwan, Hong Kong, and Thailand. After comparing the same product with Omnilytics’ Product Match, there were a few present discrepancies.
Zalora Malaysia, Zalora Singapore and Zalora Indonesia all carried the jumpsuit shown above. However, for Zalora Indonesia, the jumpsuit was only seen a month after it appeared on the Malaysian and Singaporean site. The delay could be because of the market’s receptiveness towards new-in items, or simply because they wanted to clear old stocks first. The interesting aspect, however, is the discounting rate. Both Zalora Malaysia and Singapore had high sellout rates, but it was mainly due to the discounts of 75% and 80% set respectively. Singapore’s last seen date was 3rd June, three months later than the Indonesian market. In fact, Zalora Indonesia started seeing sellouts even at full price.
Again, the embroidered dress from River Island saw a similar pattern. Zalora Indonesia starting selling the dress weeks later than Singapore and Malaysia. However, the discounting strategy was not utilised as much. While Malaysia and Singapore set a 65% discount, the one on Indonesia had 20 percentage points less. Both the Malaysian and Singaporean market saw stockouts after discounting, which indicated that the consumers from the region were more motivated by sales.
So, how exactly is the same product strategised across different retailers? Well, there’s no one-size-fits-all answer here, as different retailers adopt different strategies based on their own target market. In this case, both ASOS and Zalora mostly received the same product from River Island about the same time, but the range varied when it came to pricing and discounting. In fact, as shown by Zalora’s example, even the same retailer can each have different pricing and discounting strategies depending on location, as proven by Zalora in the SEA market.
Omnilytics’ Product Match allows brands and retailers to study how competitors set their business strategies, as well as how multi-label retailers – that may potentially carry your competitors’ brand – do so. The key takeaway here is this: with the fashion industry expanding at every second, it is essential for brands and retailers to be in the know of every possible vertical.