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2018: Strategies for retail success

retail success

As A/W 17/18 comes to a close, data from Instock, WGSN’s retail analytics platform, points to key messages and shifts in consumer demand. Here are the five things you need to know as you plan for the year ahead.

The clothing pie is getting smaller, so radically reconsider brand and product proposition.

Retailers have reduced new-in volumes (-1.62% YOY) to control excess stock levels, but that hasn’t made a dent in overall volumes (+2.34% YOY). There is little doubt that shopper spend is moving towards experiences and lifestyle; and as a result retailers are fighting for a share of an ever-decreasing clothing pie.

 

Retailers are discounting more but shoppers aren’t buying more, so cater to the considered consumer.

YOY out-of-stocks have stayed stable despite markdowns jumping YOY. UK consumers are already strategic shoppers conditioned after years of low economic growth and volatile socio-political climate to prioritise value for money, so price alone is no longer the differentiating factor. Brands winning out are those that have distinctive service propositions (ASOS, boohoo) or those with a distinct design signature (Joules, Ted Baker), indicating that shoppers are thinking deeper about value for money. Accordingly, having a clearly communicated and distinctive product point of view (quality-driven such as at Arket or choice and service driven such as at ASOS) must be the norm.

 

Move seasonal product drops closer to season to benefit full-price spend.

In A/W 17/18, outerwear drops moved closer to season (peaking in October, as opposed to September in 2016) to compensate for weather volatility; and as a result – more shoppers bought into full-price outerwear. Average price of out-of-stocks for both jackets and coats jumped YOY. With this clear impact on margins, retailers will benefit from applying a similar approach to season-specific summer categories. Being responsive, flexible and agile with merchandising will be key to achieving this.

 

Make sustainability your core value.

Sustainability is no longer a niche concern – high-profile high-street retailers such as H&M and Zara have expanded sustainable collections, Selfridges has incorporated a ‘buying better’ online segment, while Gucci and Michael Kors have banned the use of fur – which is no doubt a reaction to changing customer perceptions – as shoppers think deeper about the impact of fashion consumption on the environment around us. Consumers have become ever more vocal about their concerns regarding sustainable issues, making it imperative for retailers to offer visibility over their material procurement and apparel production practices. In addition, as shoppers think deeply about value for money, sustainability will increasingly emerge as a core concern.

 

Offer optimistic products and re-engage disillusioned customers.

The outperforming styles of A/W 17/18 point to a perceptible shift in consumer desire. Tired of socio-political doom & gloom, consumers are increasingly desiring cheerful, optimistic joyful products – as evidenced in high demand for details and products such as sequins, muppet-esque teddy jackets, the joyous return of the Christmas jumper, and the growing popularity of Gucci’s maximalist design aesthetic. This sentiment will continue into 2018, and retailers must tap into it via products such as sparkly footwear (think Victoria Beckham’s S/S 18 pumps), color-blocked knitwear and maximalist styling.

 

NEED RETAIL DATA?  Knowing when to back a trend, colour, category or item and knowing when to back off is crucial – you can’t afford to get it wrong. Know exactly what’s trending in retail across every category with WGSN Instock. Find out more here.

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