Oh, such a hot topic – SALES! I read a lot during my days, a lot, and when browsing through the industry news lately there are two topics: CEO’s leaving & Sales. As unfortunately I have zero control over the world leading CEO’s, I opt to dive into the Sales topic a little more as it strikes me how much attention it’s getting.
Sales always has been on our agenda’s, talking corporate and SMEs. Funny that this topic is so rooted within both brands, and consumers, but I never had this top of mind when learning about fashion. It’s just something that’s there and we all long for these seasonal clear-outs to come. While studying fashion at AMFI I cannot recall any long-lasting conversation about Sales, why it’s there, how you can use this within your business or if it’s a good or bad thing?
There are so many thoughts about Sales, but unfortunately it all hits back to the core itself – the Brands themselves. But why in heavens name would brands with value mark their products down and loose cash willingly on a full price sale?
Some luxury leaders have been notifying they should stop sales as they are luxury. Yes, we pause for the strategic strength in leadership here. Some sustainable labels have been notifying they should not do sales as this is contradicting them believes. Where did this all start, how do we manage Sales these days and will this change in the future?
Sales is strangely enough a cause as well an effect. Over the years, we’ve been over-producing clothing, both by brands & requested by the consumers need of broad offering. Let’s say that a rough estimate of 30 to 40% average production is sitting ducks in a warehouse, or is being shipped back to a warehouse at the end of a regular season. Every second this product is sitting there, it’s a. losing value and b. just simply blocking shelf-space. Solution to clear this out – SALES!
Climate Change (to some individuals a hoax), is impacting the fashion calendar heavily. Due to the official seasons kicking in later and the fashion calendar staying as is, the winter season only starts when the new spring fashion calendar already starts kicking in. To enable literal shelf- & warehouse space, a clear out of the old season is needed. Solution – SALES!
And then panic hits, there is less to no liquidity looking at the projections for end of the season / year. You’re sitting on raw material, slow sales and a climate that is not supporting your projected sales. Solution – SALES! Let’s produce our bestsellers in the left-over raw materials and mark all down, sell loads and save the day.
One topic is already on the table to change – the fashion calendar. Even though some people think the Chinese are fooling us here, the moment I still walk around in flip-flops on a late October evening within Zurich Switzerland, tells me something is going on! Let’s pray to the fashion gods (Anna W. help us out here) that we can imagine another fashion flow going forward soon. Or seek to manage this ourselves within a collaborative movement of labels, changing development, production and delivery dates, etc. (Some of my clients are already on the road to get this done, fast!)
The other is a rather simple, yet complex one – Product Planning! You cannot look forward if you don’t look back. It’s key to review your past sales and not only jot the numbers down and analyze, but also strategize from that point forward. Strategically plan your collections, products and/or brand is key to generate a high product efficiency. And this will result in low stock situations, a higher profit & a happy returning consumer. You have just started and have nothing to fall back on, please reach out to me, and I can help plan your product accordingly to market need.
Let’s hope that the future is bright, consumers buy less and more focused, brands don’t overstock, and product planning is a key asset in every fashion label to drive growth! Sales will be a thing of the past and our kids will be laughing later at how stupid this whole thing was.
xo Arinda (7/2/2017)