Fashion apparel is a unique business. Brand managers along with their marketing teams and designers continually refresh and remarket to create demand for new styles. Brand sales teams present new collections multiple times a year with the goal of capturing the maximum in pre-season bookings, then in-season they hope predictions of what will sell comes true and generates re-orders. This business can soar or plummet on minor changes in brand perception.
While some brands year-over-year carry the same basic styles, which allow for easy tracking of fluctuations, most fashion brands are continually changing. Change has become the norm, and disruptive changes in retail have created major challenges to forecasting and identifying trends.
With consumer demand and technology advancements leading the way for change in the fashion industry, you can prepare for the disruption by incorporating these key metrics to track the health of your brand and correct minor issues before they become major problems.
Contribution by Category
Take a look at your revenue by merchandise category. Is it well-balanced? A solid brand with styles across multiple categories should be selling fairly consistently over time. Track season-to-season and same-season-to-prior-year. Major shifts that can’t be explained by fluctuation in consumer demand could indicate trouble in certain categories.
New Doors
Opening new doors is critical to growing your market share. Track new retail locations season-to-season and year-to-year. Examine the trend and geography. Significant differences will exist between emerging and established brands, but the trend is more important than the number. If growth is stagnant or localized, or worse—you are losing retail locations, look further into the data to understand why.
Retail Mix
Look at retailers carrying your products and examine how well-represented your brand is in their overall merchandise mix. Is it more than last year? Study retailers targeting your primary customer base. Is your share growing? A steady or increasing percentage share is a positive indicator for the health of your brand—even if overall sales at a retailer are down. But if your position in the department is shrinking, then your brand is losing ground and you need to know why.
Margins & Markdowns
Every retailer takes markdowns, and most seek money from the manufacturer to make up for that lost margin. It’s part of the business. Look carefully at your markdowns: Are they on specific styles or more generally across the line? Broad sweeping markdowns spell trouble. Examine markdowns by fabric, concept, and visual design. Is there a common thread? Track maintained margins across the line and by category season-to-season, year-over-year. Are you trending up or down? Looking at what didn’t sell is just as important as what did.
Omnichannel
Track sales of your brand by category online versus brick and mortar. If you’re not keeping pace with the overall growth in online sales, then consider altering your sales strategy to target more online and omnichannel retailers. Examine your consumer-direct online sales: Are you growing in pace with overall online adoption? If you don’t have an online direct-to-retail strategy, you should strongly consider investing in this additional distribution channel.
Closeouts
Overstocks and closeouts are inevitable. Lost sales, inaccurate forecasting and shifts in demand will lead to closeout merchandise. Study your trends over time. How eager are wholesalers and off-price retailers willing to take your excess merchandise? Is there a growing volume of dead stock in your warehouse? Is it more than last year, or the year prior? How heavily discounted does it need to be to sell? If you have a warehouse full of dead stock that you can barely give away, you need to better understand why.
Team Attitude
Your salespeople and buyers know the business. They go to all the shows, they gossip with others in the industry and are well-aware of the trends. What’s selling and what’s not? What’s their attitude toward your brand? Are they visibly excited about your new collection and proud to represent your line? Those in the business are the first to know—often by intuition—when you have a winner or when things are heading in the wrong direction. Create a method to track and examine the feedback carefully from your team.
By taking stock of what you have and what is working as well as using the right data and analytics, you can help keep your brand competitive. When presenting new designs and collections to retailers, it is imperative for brands to use a B2B ecommerce solution to streamline the sales processes, capture buyer feedback, and analyze results. With the right tools and data, brands can simplify the wholesale process and track the necessary key performance metrics to ensure a healthy brand with retail success.
Ross West
CGS
Vice President, eCommerce Solutions
200 Vesey Street, Brookfield Place
New York, NY 10281
Tel: (212)-408-3800
e-mail: info@cgsinc.com
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