If there’s one thing American shoppers love, it’s a sale. It’s a buying behavior retailers initiated decades ago. Since stores have deliveries so early in the season, shoppers often just wait for a sale so they can “buy now, wear now.” Of course, this cuts into retail margins. But smart retailers are learning how to work with designer delivery schedules while still offering consumers the clothes they want, when they want them.
Hudson’s Bay and Lord & Taylor’s Nelson Mui, men’s fashion director, said stores are becoming better about managing their transitions between seasons, especially since the majority of the retailer’s male customers have a buy now/wear now mentality.
“It’s forcing everyone to better manage the transitions of how we flow and bring in product,” he said. “What you bring in during those transition months is crucial because you do need some newness on the floor after all those markdowns and clearance. Even in December, when everything’s marked down for Christmas and holiday, it’s good to have something on the floor that’s full price, that’s fresh and that has a different point of view. It doesn’t mean that you bring in a lot of goods at that time, but the transitions are crucial. Otherwise, you have a build up of inventory that affects the entire season’s selling performance.”
Nearly two in three consumers (66 percent) said they shop for clothes on sale, rather than buy at the beginning of the season (21 percent), according to the Cotton Incorporated Lifestyle Monitor Survey. About 44 percent of apparel offered at key U.S. retailers was priced as being on sale in the first quarter of 2015, up significantly from 37 percent two years ago. Women (69 percent versus 60 percent of men) and consumers ages 35+ (69 percent versus 60 percent of those under 35) are significantly more likely than their counterparts to shop on sale.
Jason Somerfeld, owner of Letter J, a better men’s store in the art gallery district of Manhattan’s West Chelsea neighborhood, said people want flexibility and diversity in terms of seasonal product.
“If you’re talking about fall, heavy items come in closer to the season,” Somerfeld said. “You have to be careful because it has a very short shelf life. Once the weather changes, people don’t want to look at it any more. But something like a tee shirt is offered 12 months a year at our store. You can layer over it with a denim shirt or a jacket. It’s really about the mix and the amount of product you bring in for the seasonality of the business.”
On average, men actually spend more on clothes each month than women ($80 versus $64), Monitor statistics show. Overall, shoppers earning more than $75,000 spend significantly more each month ($106), while those earning less than $50,000 spend much less ($45). The median U.S. household income is $54,203, according to Sentier Research. Which makes it understandable why so many people look for sales.
But rather than simply discount items to move merchandise, SAP’s Lori Mitchell-Keller, senior vice president of the global retail industry business unit, said there’s a more practical way to cater to consumers.
“Comprehensive customer data, including analyzing social sentiment surrounding trends and styles, combined with detailed supply chain information can help retailers anticipate demand and enable them to fine-tune inventory throughout the buying season,” Mitchell-Keller said. Ideally, the data would help stores offer in-demand styles that sell out quickly and are gone before the end of the season.
Shifting trends and consumer attitudes are measurable, Mitchell-Keller states.
“SAP recently analyzed more than 175,000 social media mentions to uncover the top fashion trends around the world, and specifically what customers are looking for this summer,” she said. For example, “The social commentary revealed that 60 percent of consumers are trending toward animal prints for the summer. When rolling out inventory based on consumer demand, retailers can start to shift away from traditional discounts and toward other rewards such as loyalty incentives or personalized offers, which help retain margin on the seasonal inventory.” In fact, according to the Monitor data, the majority of consumers (51 percent) said they want apparel brands and retailers to provide exclusive offers and discounts through social media.
For Somerfeld and Mui, attaining the right mix is complicated by the designer schedules and delivery dates.
“I’m going in one month to buy next spring from Etro, which is almost a year out,” Somerfeld said. “The Italian, French and German calendars are very early.”
Mui said the deliveries also vary depending on whether they’re for mainfloor or designer collections.
“A lot of designer collections will have pre-fall and pre-spring in men’s wear so it’s a longer time on the floor,” Mui relates.
An extended period of time on the selling floor could be a good thing, considering nearly four out of 10 shoppers (39 percent) said they get their apparel inspiration from store and window displays, according to the Monitor data. Women (45 percent) are even more influenced by the store’s merchandising.
But SAP’s Mitchell-Keller said available data can help retailers embrace consumer sentiment, listen to the buyers and create ways to respond quickly to demand.
“This takes much of the guess work out of what merchandise to stock, how much to stock and when to stock it – and makes it easier to optimize pricing,” she said. “By understanding consumers, retailers can move more full-price merchandise and reduce discounts at the end of the season.”
This article is one in a series that appears weekly on sourcingjournalonline.com. The data contained are based on findings from the Cotton Incorporated Lifestyle Monitor Survey, a consumer attitudinal study, as well as upon other of the company’s industrial indicators, including its Retail Monitor and Supply Chain Insights analyses. Additional relevant information can be found at CottonLifestyleMonitor.com.