Assortment Planning & Sourcing
Reflecting on the immediate previous season’s performance is now more crucial than against the past season, to identify the right assortment mix for future strategies. As the pandemic has worsened fashion’s excess inventory issue and proliferated markdowns, assortment planning is a key area to get right. This can be done by taking a demand-focused approach to the assortment strategy to increase full-price sell-through.
Identify Validated Demand Shifts
Overall, H&M’s performing and underperforming categories were in line with the ‘new normal’ lifestyle. With the waist-up dressing gaining popularity during the pandemic, Tops and Outerwear performed strongly at full price.
In contrast, Dresses warrants a risky category, registering a lower than average sell-out rate despite the high average discount. With low demand for going-out attire, brands should trade cautiously within this category. Granular analysis on a subcategory level will help brands identify the type of dresses that are in demand to invest in.
Find Opportunities to Optimise
Understanding the relationship between category mix and performance enables brands to uncover category opportunities. In the case of H&M, Intimates was a category of focus as it delivered an above average full price sell-out. Similarly, the brand should also capitalise on the ongoing popularity of Activewear, as it performed strongly in both sell-out metrics.
While Maternity Wear did not trade as strongly at full price, the limited assortments by competitors gives H&M the opportunity to optimise to an authoritative positioning in the category.