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Denim’s ‘New Normal’ Centers on Core Product, Inventory Discipline

Inventory optimization was already a challenge before the Covid-19 pandemic, but the supply chain’s upheaval forced denim brands to confront an even bigger problem: overstocks amid inconsistent demand. Now, a year into Covid, brands must rethink their core product lines to keep inventory down while still satisfying evolving shopper preferences.

During a recent Rivet roundtable, executives from Diesel, Tenue de Nimes, Isko, The NPD Group and Cotton Incorporated weighed in on what the pandemic wrought and where denim goes from here.

Inventory management was a main pain point. Patrick Valeo, CEO of Diesel, said that the denim brand “had approximately 200,000 more SKUs within our warehouse than we really should have had” going into the pandemic.

While Diesel quickly liquidated the excess inventory upon launching the Moon omnichannel operating model, the short-term storage expenses taught Valeo a valuable lesson about narrowing the brand’s focus.

“Instead of always just buying maybe what looks nice, at the moment we really focused on that core product and putting depth into that. This works better than worrying about all the fashion pieces which tend to move a bit slower, especially when you don’t have people visiting a store,” he said.

Similarly, Menno van Meurs, owner of the denim brand and boutique chain Tenue de Nimes, said he and his team spent most of 2020 defining the brand’s core to come out with a stronger offering.

They were led by the question, “What are the top 10 sellers that you need to replenish with your eyes closed?” van Meurs said.

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Valeo acknowledged that brands must maintain this discipline into the fall, but can’t be overly cautious in their inventory buying either, especially as the pandemic subsides and fashion demand increases.

It’s a tightrope between being understocked and reverting back to pre-pandemic stock levels, posing an upcoming test for brands.

“People are creatures of habit and people want to go back to normal, and normal probably is being a bit overstocked,” Valeo said. “I think we’d be foolish to say it’s not going to partially go back to that route.”

Rather than simply stocking up, van Meurs said now is the optimal time for brands to collaborate with suppliers to create interesting products to draw shoppers in. Tenue de Nimes worked with brands and suppliers during the pandemic to produce fresher ideas, he said.

“The whole business model was upside down anyway, so you might as well bring some superb products to the market, because otherwise, you simply can’t survive,” van Meurs noted.

“We might have been making some of the best product we’ve ever made in that sort of panic and creativity. I’ve often said to my top suppliers ‘let’s never do it any different anymore.’”

Skinny: out; high-rises and wide-legs: in

And it seems that consumers are ready for some fresh ideas. As far as top-trending product styles go, high-rises and looser legs lead the list, according to Kristen Classi-Zummo, director of market insights at The NPD Group.

“Looking at our March data, straight-leg openings are actually set to surpass skinny jeans, and that’s the first time I’ve seen that in years,” Classi-Zummo said.

Sonny Puryear, marketing and business development manager at denim manufacturer Isko, agreed that the skinny jeans trend is “definitely slowing down,” particularly among the younger consumer, but felt that it was not going away completely.

“You’re definitely safe with traditional fit and slim cut, but loose fit, boyfriend or mom jeans are popular as well,” Puryear said. “Also, we’re seeing a lot of requests for the retro ’90s marble look.”

Shoppers find more reasons to buy jeans

The good news for denim manufacturers and retailers is that regardless of the style or trend, consumers say they have more reason to buy jeans on the pandemic’s downswing.

While 69 percent of U.S. consumers said they will wear denim jeans either the same amount or more often if they are working remotely in the coming year, even more (78 percent) said they would wear them if their office shifted to a casual dress code, according to data from Cotton Incorporated.

“We heard a lot about sweatpants [during the pandemic] and obviously we know consumers were wearing them, but they were also wearing their denim,” said Melissa Bastos, director of market research, Cotton Incorporated. “About 49 percent said they were wearing their jeans the same amount during the pandemic as they were before. They had a lot in their closets already, they consider this to be a product that can make them look good and feel good, and it’s comfortable for them.”

And although casual and comfort have been all the rage throughout the pandemic, denim jeans may benefit from this trend more than people realize. According to Cotton Incorporated, 21 percent of consumers wear denim jeans when they want comfort, which surpasses the 20 percent that said they would wear sweatpants and the 16 percent that prefer jeggings or leggings.

“This is not just last year, this is current, so comfort will continue to be important,” Bastos said. “Comfort plays an important role in the future for consumers and I think denim jeans are a key part of that.”

Beyond the comfort factor, denim brands now expect sustainability to dominate more conversations in 2021 and beyond. During the roundtable, Puryear noted that Isko had a significant uptick in customers who wanted to talk about sustainability within the first six months of the pandemic.

“We have partners that were not interested in sustainability offerings pre-pandemic,” Puryear said. “We have some that dabbled in it, we have some that had very clear targets and goals, and we had some that led the pack. We are able to offer each of our partners, wherever they are on the spectrum, something to help them achieve their goals and targets toward sustainability.”

Watch the webinar to learn more about:

  • The changing role of stores and e-commerce in denim sales
  • How BOPIS and livestreaming can help denim brands merge the channels
  • Denim’s shifting promotional strategies
  • How denim sales can weather the 2020 job losses
  • How the industry can build on its sense of community through social justice engagement

Click here to watch the webinar now.