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Having been in the Merchandising field for longer than I care to mention I have seen many Retailing trends come and go. Some have stayed some disappeared quickly without trace into the black hole of buying and merchandising lost forever. There is one though that has made a massive impact and it has to be said is the reason may businesses face turmoil over the coming months.
The principle of bringing in new collections every six weeks to sell out and bring in the next -or as I lovingly call it STOCK PHASING. The view that the consumer continually needs newness and freshness to engage them and give them that call to action to buy. It makes the assumption that the Consumer is like Pac Man needing continual power pellets to keep them fed and energised otherwise they disintegrate to nothingness. You definitely need a neon yellow boob tube, then a hot pink one, then a spotty one then a.. (you get my drift!). This was made even more challenging in the sector I come from, which was very slow moving high, multi-sku product. Planning those stock packages in and out was a continual battle in getting the availability right whilst trying (desperately! trying to sell out) which invariably never happened.
So has the consumer ever really shopped like this? Even prior to the Global pandemic the amount of stock building up and heading to landfill suggests not. The need for companies that purely specialise in exiting stock for brands also tells us otherwise. Companies were unable to turn their stock into demand. Will the pandemic cause a rethink and actually help us go back to simpler times where we invested more in quality wardrobe staples and it felt like a treat to buy a new outfit? We are starting to see bigger brands stating the desire to move to two collections a year and to lose the multiple-pre collections. They are also looking at a higher mix of “evergreen product” which as the name suggests means the product will be relevant for seasons rather than just 6 weeks. Companies are now actively planning to hibernate stock (M & S and Next) so they don’t have to burn through it at huge discounts but where appropriate to plan it in for the next seasons collections.
Whilst there will still be a need for “heat” high trend led product the balance of how much this makes up of a collection definitely feels like it is shifting. All of this drives the hope of a more sustainable future. My new favourite programme is The Sewing Bee and I love the transformation challenge where the contestants take an old garment and transform it into something fabulous. Perhaps that’s the future…
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Hibernation is a word I’ve not heard for some time, probably since Primary school. It conjures up images of hedgehogs and squirrels hunkering down for the Winter, bellies full and ready for a long cosy sleep ready to awaken in the Spring to a new start. It always sounded very appealing! Hibernation in the last few weeks has come to mean something entirely different when M&S declared they were going to put lots of their SS20 stock into “hibernation”. Mainly basics that wouldn’t date locked away securely and safely, ready to be brought back out in SS21. Next followed suit and it is estimated that 15% of their SS21 buy will be made up of SS20 product.
Is it the right thing to do? Absolutely! If you do not need to liquidate the stock into cash and can keep the stock in saleable condition, keep it and plan it in as part of an upcoming range. And that it the key phrase in all of this “Plan it In”. I am a firm believer that all lines of product should be profiled as to the role they play within your business. What do I mean by that… I think there are two very simple ways every Retailer should profile their stock. You can add more finesse but as a minimum this will do it.
Is your line a core line – is it very predictable in terms of it’s forecast. Is it likely to roll on for Seasons with little need to change it. (as in the M&S example of keeping basics in hibernation ready for next year).
Is it Heat? Is it there to service a trend or a moment in time. Think the bright acids around at the moment. How long will they be around? These are the lines that unfortunately are likely to need to be discounted to clear before the end of the Season.
So back to the point on planning it in. Your planning tools should include the hibernated stock (on Buygrids, line plans etc) These lines are just as important as anything you are buying in as new and you need to ensure you don’t buy into anything that could potentially cannibalise sales. You should also ensure your open to buy includes this stock so you do not overbuy for the upcoming season.
Covid-19 is forcing the conversation on excess stock and planning. A conversation some might say it well overdue. Watch out for more blog posts coming soon.