Understanding Differences in Local Market Demand: Although the work from home phenomenon has affected consumers globally, not all markets have benefited from it. Sell-out rates soared in the US but only had minimal growth in Hong Kong.
The increased sell-out rates are an indication of shift in consumer behaviour in the US. Consumers are leaning into fitness, causing a corresponding uplift in demand for activewear.
Since sell-out in Hong Kong did not achieve the same result as the US, the difference in consumer behaviour between Western and Eastern markets is observed.
Identifying Gaps in the Market: The high sell-out rates for activewear in the US market indicate a good opportunity to potentialize. However, it is important to identify gaps through performing categories and subcategories.
The categories with the highest growth in sell-out were Activewear Shoes, Activewear Sets and Activewear Skirts, demonstrating high demand.
Activewear Accessories is a category that should not be ignored either. Its subcategories, Active Underwear and Mats achieved 100% sell-out, signalling a market gap that can be capitalised on.
Next Steps for Brands
Navigating Consumer Demand: The current global work from home phenomenon does not benefit all markets alike. Brands must be able to understand consumer demands in local markets for better navigation.
Western brands carrying an activewear assortment should observe the performance of global brands to apply similar strategies in pricing, discounting and assortment planning.
Eastern brands must monitor the local market to identify gaps in the market. Focus has to be shifted to these market gaps to create an opportunity to potentialize sales. As for eastern brands offering activewear, future intake for the segment should be reduced to pivot towards gaps in better performing segments in the market.
Generate a Base Forecast: Past data has become irrelevant in manoeuvring the current fashion retail crisis. Brands must evaluate their current situation to form a base through re-forecasting. When generating this forecast, it is imperative that brands be realistic instead of overly-optimistic.
Moreover, having a base forecast helps brands refrain from having a knee-jerk reaction. Premature heavy discounting and cancelling stock can be more harmful despite the good intentions. Maintaining a good relationship with the supply chain might be a short-term pain but it will lead to a long term gain once the coronavirus situation eases up.