Merchandising Strategies for the New Normal

Covid-19's impact on consumer preferences has necessitated a new set of merchandising strategies. In this report, we analyse strategies of fast fashion retailers in the UK to explore the merits of leveraging high growth categories and subcategories, dynamic pricing, compact seasonality, demand-driven supply chains and more.

Written by Atiqah KamarudinMay 29, 2020


Key Insights

  • Shift in Comfort Dressing: Current lifestyles have created a renewed a surge in athleisure, as consumers prioritised comfort.
  • Opportunity in Full Price Sell-Out: We’ve identified high-growth categories and subcategories, which provide opportunity for brands to experiment with pricing and maximise full price sell-out.
  • Accelerating Demand-Driven Supply Chain: Seasonless collections and tight assortments will allow brands to create agile, demand-driven supply chain.


We can’t understate the impact the coronavirus pandemic has had on the fashion industry. As retailers continue to face inventory issues, changing consumer preference has highlighted the industry’s deep-rooted problem – seasonality. Some brands have taken measures to cut back on assortments, while others decided to push deliveries to next year.

This report aims to uncover the merchandising strategies adopted by fast fashion retailers in the UK and how they can move ahead to leverage on potential opportunities in embracing the new normal.

More than 200,000 data points were screened from January to May 2020 against the same period in 2019 across womenswear categories on Asos, Boohoo, Zara and H&M.


All data used in this report comes from products retailing online as tracked by Omnilytics, unless otherwise mentioned.

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Compact Seasonality

With production cycles and deliveries in disarray, many designers and retailers are wanting to reset the traditional fashion calendar, bringing it in line with the weather seasons. Saint Laurent, the first major label to skip Paris Fashion Week and move off schedule for the rest of 2020, will likely inspire others to follow suit.

With excess inventory and rampant discounting at an all-time high, retailers are in a better position to keep their assortments tight. Consumers, currently less interested in fleeting trends, are more likely to shop essentials and seasonless items.

Shift in Comfort Dressing

Despite low consumer sentiment, key apparel categories still observed positive YoY increase in sell-outs. The already-successful Activewear category benefitted from the growth in at-home workouts, with a strong 43% growth in sell-out YoY.

As lockdown measures started to ease in the UK, comfort dressing remained at the fore. Intimates, mostly dominated by Sleepwear, saw a whopping 41% increase in sell-out YoY. The bottoms category also saw a clear shift from formal styles to casual and relaxed silhouettes, indicating longevity post-pandemic.

With consumers prioritising comfort, loungewear – a trend closely aligns with athleisure – is at its peak. The style was uptrending across most core categories. Hoodies & Sweatshirts, Joggers, Jumpers & Sweaters and Sleepwear Tops & Bottoms were the main subcategories that made up this new core offering (Chart 2).


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Full Price Opportunity

The main Activewear, Outerwear and Pants & Leggings subcategories reported above average sell-outs at full price.

Activewear performed best in both total sell-out and sell-out at full price, signifying the renewed popularity of the category. Drilling further into Activewear, we can see that Tops & T-Shirts was the most popular subcategory, which was made up mostly of Tank and Jersey Tops.

In Outerwear, Hoodies & Sweatshirts garnered above average sell-out at full price, while Jumpers & Sweaters fell short by 0.5 percentage point. Casual silhouettes proved to be in high demand as Joggers and Leggings managed to record above average sell-outs, compared to more formal bottoms subcategories.

Consumers’ increased willingness to pay for these products signals a huge opportunity for retailers to continue driving these subcategories at full price. It’s wise to look out for opportunities like this on core items, prolonging the product lifecycle.


Retailers Championing Full Price Sell-Out

Zara was driving full price sell-out for casual outerwear at 65%. The retailer leant into the popularity of the category, as it increased its offerings this year by 40% compared to last.

With activewear on the rise and loungewear being the new essential, Asos was in a better position as it had the widest offering on these categories with nearly 10,000 SKUs. The retailer also led with above average sell-out at full price, signifying its strong position in these categories.


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Dynamic Pricing

Breaking down the median price by key subcategories revealed Zara’s dynamic pricing during the Covid-19 crisis. The retailer chose to increase pricing for categories with high growth, capitalising on demand.

Zara launched new Hoodies & Sweatshirts and Cardigans during the Covid-19 period with an average of 6% and 9% increase in prices respectively, compared to last year. Despite the higher price, the retailer managed to achieve an overall improvement in total sell-out at full price of 65%. Sell-out in April also increased following the rise in median price in Outerwear subcategories (Chart 5).

Similarly, the subcategories within Pants & Leggings also experienced increased sell-out. The success of the pricing strategy was led by the relevant offering, as you’ll see next.


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Dynamic Pricing (cont’d)

Relevant SKU Styles

Digging deeper into the bestselling SKUs, minimal and relaxed-silhouette pieces were preferred by consumers this year. The pandemic has clearly shifted consumers’ preference, as transitional designs in core colours won them over.

To tap into the ‘buy now, wear now’ consumer, brands not yet in this space could pivot towards this new demand in comfortable loungewear by starting with a small capsule collection. Given seasonless items stand a higher chance in the current climate, brands would be wise to evaluate the space in their assortments. At the same time, CEO of Hilldun Corporations, Gary Wassner, suggests brands go through the bestselling SKUs and find products that are emotionally compelling to consumers. It is the pairing of these product areas that will best serve retailers moving forward.


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Meet the Author

Atiqah Kamarudin

Nur Atiqah Kamarudin is a Senior Business Intelligence Analyst at Omnilytics. With past experience at Nielsen and Euromonitor, she has spent years analysing data and unearthing insights to help brands and retailers make informed decisions. She currently produces reports on the fashion industry and its changing retail scene across the United States, United Kingdom, Australia and Southeast Asia.

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