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These Are the Top 5 Challenges Facing Apparel Retailers Today

It’s a tough time to be an apparel retailer. There’s the so-called “retail apocalypse” that’s shuttering stores by the thousands, plus a new crop of slick and nimble startups are bringing exciting new product direct to consumers without the staggering investments encumbering legacy merchants. There’s a lot going on, and much of it isn’t pretty.

But what are the top challenges apparel retailers are facing at this very moment? Though it depends on whom you ask, Infiniti Research cites five particular issues as the key of-the-moment obstacles.

1. Consumerism

This is the age of the consumer, according to Infiniti, and more than ever, consumers have great choice and greater convenience. Fashion inspiration and desire come from everywhere—from billboards, from the snappily dressed fellow commuter, from movies and TV shows, from international catwalks, from glossy magazine pages and of course, from the endless font of tuned-to-perfection content on social media. As such, the consumer desire for new and novel is accelerating and even the fastest of fast fashion brands can barely satiate the appetite for fresh and forward style.

Fashion cycles are accelerating so quickly that, tasked with churning out collections at a dizzying pace, some retailers are creating “complications in the supply chain, product development, planning, production, and fulfillment,” according to Infiniti.

2. Differentiating the experience

How can apparel retailers stand out when virtually every competitor is offering similar product and promotions in a similar environment? That’s why Infiniti says fashion stores must find a way to differentiate their in-store environment to attract shoppers and provide memorable (and social-media-worthy) experience. Loyalty typically is a result of enthusiastic customer engagement; brands that can crack that code can create valuable customers for life.

Though many fashion retailers have looked to in-store tech like tablets and kiosks and services such as click and collect to entice shoppers, Infiniti insists these businesses must invest in creating an engaging store environment to draw customers in. This could mean merchandising the store so that click-and-collect customers make additional impulse purchases while awaiting their order pickup, or grouping complementary products together to encourage cross-selling and higher basket sizes.

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3. Inventory management

Sometimes feel like “inventory management” can a dirty word, and it isn’t likely that any company is expertly managing their inventory expertly 100 percent of the time. It may not even possible, given so many external factors affecting demand, from the whims of consumer tastes to the weather, which is out of anyone’s control. Did it snow enough in winter to drive sufficient sales of gloves and coats? Did a wet summer put a damper on swimwear sales?

Ensuring inventory levels are just right is a significant issue for most apparel retailers, especially considering the traditionally long lead times required for many collections. Achieving “agility and excellence in stock visibility, operations planning, and inventory intelligence” remains elusive for many retailers in fashion, according to Infiniti.

4. Compliance and sustainability

From child labor and forced labor to wage violations and garment factory building code infractions, apparel supply chains are notoriously complex and fraught with corner cutting. Only in recent years have major brands begun to pay more than lip service to sustainability, with H&M leading the way by making its supplier network completely public. The Sustainable Apparel Coalition, which counts more than 40 percent of top brands among its membership, helps apparel companies set a framework for measuring their social and environmental efforts. Still, progress has been slow, even as interest in circularity, alternative eco-friendly materials and recycling is gathering steam.

“Companies in the fashion industry have to navigate through all the sustainability measures and ensure compliance to maintain a positive brand image,” Infiniti said.

5. The danger of discounting

Shoppers are addicted to discounts, and it’s proving inordinately difficult for apparel retailers to break them of this ingrained why-pay-more? mentality, especially around the make-or-break holiday period. According to Infiniti, discounting is among the primary drivers of margin erosion, but because “everyone is doing it,” it is difficult to break the cycle and attract consumers without dangling a proverbial carrot. Still, there are encouraging signs that some consumers will pay full price for quality, must-have products. Everlane’s Day Heel has sold out five times since it was originally stocked about a year ago, and inventory data on Macy’s online assortment shows sell-through of new arrivals trended up in 2017.