Retviews data barometer for Fashion #1

Key Takeaways

•   New arrivals are led by summer categories such as summer accessories, t-shirts, and dresses. Surprisingly, swimwear is not among the high level of new arrivals. Is it because retailers are waiting for the travel bans’ lift or have they fully moved the excess swimwear to next year?

•  Retviews data suggests thanks to a fashion industry competitive analysis that the Covid-19 stock share is equal to almost 40% of the total stock of retailers. Among these are high summer and high spring garments that will have to be put on sale. Depending on the retailer, this share is not too high.

The current state of fashion

It has now been a few months since life has changed drastically around the world. Since March 16th, almost all countries in Europe, followed by the whole world, were placed under lockdown in order to contain the spread of the deadly virus. Almost all fashion brands have seen disastrous results during the confinement, with one thing on their minds: how to get ready once the lockdown is lifted? Will business as usual return after the lockdown is lifted?

The moment has finally arrived. Retailers have adapted their strategies during the lockdown and now have to get ready for the most challenging period of the year, i.e. sales period.

The scope of our report includes France, Spain, Italy, and Germany which represents the most important markets in terms of revenue for the brands we are analyzing in this state of fashion mass-market edition.

New arrivals: What is coming in the months ahead and how has it evolved compared to 2019?

When it comes to new arrivals, it is no surprise that the biggest share goes to summer categories. Summer accessories have invaded the stores and e-tail, followed by t-shirts and dresses.

Surprisingly enough, swimwear has drastically been reduced in terms of new arrivals. In our previous reports, we have raised the question of swimwear’s peak of arrivals. According to Retviews data, this peak is yet to come. Is it going to be postponed for late June, once travel bans are lifted? Or will they stay in the warehouses until next year?

Moreover, when we compare the COVID lockdown period of 2020 and 2019, it can be observed that the new arrivals of 2020 in terms of summer garments have been reduced by 33% on average for ladieswear. This shows the quick reaction of retailers amid the pandemic.

Out-of-stock levels: which are the best selling categories?

Only retailers can accurately tell what is selling well or not as they have the exact numbers. However, we can also have a view of their out-of-stock references. It includes articles that have no sizes left, which means that they have been sold out. Therefore, this data can be interpreted as an article that is selling quickly and without any replenishment planned as the demand was too high compared to the offer.

Since the beginning of the lockdown, loungewear categories have been showcased as the best-selling ones. Nightwear is still among the top out-of-stock categories. Even since the ease of lockdown, the out-of-stock rate has grown by 23%.

On the graph above, we can observe that the categories with the highest level of out-of-stock are the ones that have seen the highest level of incomings. What can be observed here is that retailers, despite having managed to reduce the impacts of new incomings, have opportunities to replenish those high out-of-stock categories. In the current state of fashion, retailers have to be flexible. Flexible in their scenario plans, their budget revisions but also in terms of buying and the relationship they have with their suppliers.

Aging of the stock: reality check

On the graph above, it can be seen that the share of May’s stock is pretty low apart from Zara. Summer colors like lilac, light green, and orange have appeared and will probably be markdown. To know the share of transitional garments of each retailer, you can filter the categories on your Retviews interface.

Sarah Willersdorf, partner and managing director at Boston Consulting Group has suggested in an interview that “maybe they (retailers) could consider a three-season plan, taking the excess of inventory and reserve some of it for multiple seasons”. This would be an excellent opportunity for retailers to revise their buying strategy and buy more SKU but in fewer quantities. Doing that would increase their stock turnover and incentivize their customers to stay updated on the latest trends and arrivals.

Conclusion

The current post-lockdown period is pretty quiet compared to the lockdown. In terms of new arrivals, without any surprises, summer categories are here, but swimwear is not. Should we expect a wave of swimwear once the travel bans are lifted? Only time will tell.

A key opportunity for retailers this year is in working closely with their suppliers. Even if it is difficult to build any plausible scenarios without being either too optimistic or too pessimistic. Having flexible suppliers can help in replenishing the best-selling categories, reported as ‘out-of-stock’ categories, which can lead to great selling opportunities for the retailers.