Width vs. Productivity: Brands with the most newness did not appear to be driving the equivalent of Sell-Out, as evident in the case of Zara and Zalora. Zara has been slow to e-commerce adoption, as online expansion to Asia began just last year.
Faced with a similar e-commerce predicament was H&M, who just launched its online presence in India and China in the first quarter of 2018 (China via Alibaba’s Tmall), playing catch-up with its major rivals.
The fast fashion behemoth was also in another news headline early this year for having high unsold inventory worth US$4.3 billion, based on its first quarter financial report. Newness launched by the brand this month was modest in rank, albeit behind Sell Out by 12%.
Unlike H&M’s low New-In as a result of an existing over-stocked situation, Boohoo may have under-forecasted New-In with its massive sales growth of 50% reported for the first half of 2018 by The Guardian, which could lead to underwhelming sales (its Sell-Out exceeded New-In by 9% in this report).
Emerging Brands: Little known brand Pazzo from Taiwan made a surprise entry into the top 10 rank, with high newness and good productivity. The chic and affordable brand appeals mostly to the locals (Taiwan is among the world leaders with high e-commerce penetration).
Thailand-based Pomelo Fashion aggressively gained market share in Southeast Asia with its fourth newly opened physical store in Bangkok, while maintaining a healthy online performance.
Next Step for Brands
Adopt Proactivity: Crucial to trade productivity is routine measuring and monitoring of the relevant metrics.
Aside from the usual sales against inventory analysis, the alternative measure of Sell-Out against New-In demonstrated in this report presents an additional perspective to indicate early signs of overstocked issues or missed opportunities.
Brands should be proactive to forecast and re-forecast the quantum of newness and adjust the phasing of launches with each analysis to stay ahead of the game.
Go Glocal: The success of Pazzo and Pomelo Fashion can be attributed to their deeper understanding of consumers within the region.
While the international brands competed to offer global key trends of Fall 2018, the Asian brands retained some local elements, such as Pazzo’s above-the-knee dresses with light blouses and Pomelo Fashion’s buckled bottoms. In fact, on top of the local trends, Pomelo Fashion also launched a new collection in pastel palette this month – a seamless effort that appealed to the target market.