• Different discount strategies: which one had the best results?
• Garments’ categories: which one influenced the selling?
During the COVID-19 pandemic, have you ever wondered what your competitors are up to?
There is an easy way to find out with RETVIEWS.
As one can expect, Fashion retailers took various merchandising actions during this pandemic. RETVIEWS can provide you with the latest information about your competitors’ activities gathered through their newsletters. An easy way to stay up to date without getting a lot of spam in your mailbox.
DIFFERENT DISCOUNT STRATEGIES: WHICH ONE HAD THE BEST RESULTS?
It is no news to anyone that the Coronavirus pandemic has put the retailers in a complicated stock situation, forcing them to stock garments that are not selling in their now-closed stores but also in their warehouses.
This pandemic has impacted not only the selling part of the business but the whole supply chain as well. The two largest manufacturers of the Fashion Industry, i.e. China and Bangladesh, are suffering the most in this situation.
Some might say: “easy, let’s transfer everything to the online channel”.
However, this is not that simple.
It is noteworthy to mention that while some retailers share the same online and offline warehouses, some others don’t have this luxury. Therefore, for the one having a common warehouse, the shift from offline to the online garments is more accessible, and the loss can be minimised. For the others, these garments’ move is trickier as one retailer cannot physically take its garments allocated for stores and send all of them to the online warehouse (legal and spacing matters).⠀
During the COVID-19 confinement worldwide, almost all retailers have decided to take the bull by the horns and to shave their stock.
It can be observed on the out-of-stock evolution graph above.
- • H&M Group style: Additional discount
To tackle the current situation, all the brands of the Swedish giant group have offered an additional discount on their mid-season sales. The objective is cleaning as many old stocks as possible.
This action resulted in increased sales for the group. However, once the offer was rescinded, and with the new allocation’s incoming, the out-of-stock level has lowered down.
- • Mango Style: Full house discount
During the same period, Mango has decided to go bold and shaved its entire stock to lower the post-coronavirus stock situation.
The retailer put on March 27th all its full price SKUs at a 20% discount for a week. It has significantly decreased Mango’s level of out-of-stock, which has lowered down further with the new allocation of summer garment.
- • Bershka style: Selected articles substantial discount
- Some brands, such as Bershka, have decided to put selected articles in a promotion. This action was taken right after the announcement of the extension in the confinement period. Great selection combined with an attractive discount (up to 50%) has skyrocketed the Spanish brand’s sales.
In brief, some actions have been more effective than others. Out of the three measures mentioned above, Bershka’s approach had the most significant impact on the stock situation. The timing, selection, and attractiveness of their strategy allowed the brand to increase the visibility of its stock and, thus, its sales.
Right after Bershka, Mango’s strategy gets the silver medal due to Its full house discount paying off, and as a result, helping in drastically increasing its sales. However, such an action that lasted a whole week might be too long to encourage undecided customers. The peak was reached within a few days and then dropped back. It shows the importance of exclusivity for a brand. The brand has, since the analysis, extend the period of the discount until 13th April. Another week of promotion for Mango that might have a positive impact on its selling, or not.
Last but not least is the second-biggest retailer in the world, Hennes&Mauritz (H&M). It employed the most conservative approach. The group’s action to offer an additional discount was a good idea as it helped them to clean some old stock. However, it did not have a significant impact on the sell-through of the group.
GARMENTS’ CATEGORY: WHICH ONES INFLUENCED THE SELLING?
What type of garments is selling the most during the COVID-19 pandemic? Do people still want to dress up, or do they want to be more relaxed?
As work-from-home is the new normality, people want to wear comfortable garments during work hours. For the others, the dream of pyjamas all-day while Netflix and chilling is now their reality.⠀
The garments which have seen the highest growth of out-of-stock rate are :
- • Clothing and accessories have seen the most growth of out-of-stock with 13.8% and 16%, respectively. Children are at home, and they still need to get dressed, which can partially explain the increase in the number of sets (which include packs of socks, pyjamas, etc.).
- • Sweatpants are in second place with an increase of 13%.
- • Then comes nightwear (9%) and jumpsuits (8%).
Other categories that saw a substantial increase in out-of-stock are t-shirts, leggings, and casual clothing with an average of 6% each.
⠀At the same time, retailers have also planned this situation carefully. The highest level of incomings is from these categories as they keep on selling! They will probably foresee another increase in terms of sales as all countries have extended the confinement period and might make it last longer than the announced mid-April.
On top of that, Marketing and communications have worked wonders together with merchandising strategies. Everywhere, from websites to social media, the brands have promoted their “stay at home” collections. They have also adjusted their collection with a clear focus on each landing page with comfortable, yet fashionable outfits.