Despite trading in the current volatile landscape and facing supply chain difficulties, digital sales were a bright spot in Nike's third-quarter results. A 59% increase was reported alongside strong double-digit growth across all regions. However, things haven't been so rosy for other businesses.
The H&M Group recently reported sales across its brands plummeted 21% and British couture house Ralph & Russo is the latest brand to file for administration due to the pandemic.
With gloomy headlines constantly breaking across the global press, we outline the six key challenges retailers today are facing and how they can use Retail Market Intelligence to best arm themselves to compete in the pandemic economy and the future.
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1. Having an appealing & relevant assortment
In a market flooded with loungewear, how do you make your sweats stand out from the pack? With competition so high, having an assortment that appeals to today's fickle consumer is a major concern for retailers that goes beyond delivering the hottest trend at the optimal time. A retailer's core line is where most of its ROI lies and therefore needing the most care given. Retailers with a global presence will also have to concentrate on catering to different seasons, so you’ll need some pretty savvy buyers to ensure the right products are invested in.
We knew retail professionals had enough on their plate even before a worldwide pandemic disrupted their whole operations. That's why data can alleviate some of the guesswork. EDITED gives you a 360 view of global assortments to see how your offering stacks up against the market in real-time to see what’s working, at the click of a button.
2. Getting the pricing right
The digital age has made consumers more price-aware than ever, giving them the ability to compare prices while shopping on and offline. Getting the pricing wrong on a product launch can risk an entirely new line ending up in the sales section. Throw in factors like hyper-fast fashion brands constantly dropping newness and undercutting prices. Retailers need complete visibility of the market's pricing by category to remain competitive. And they need that information now.
Luckily, EDITED swiftly displays the entry, average and exit prices of products being advertised in user-friendly, interactive charts. Now, you can take immediate action, ensuring your latest range won't be priced out of the market.
3. Having control of stock levels
An accurate gauge of demand is critical for retail planners and merchandisers, who ensure the correct number of products are purchased and distributed to the right stores (for those with a physical presence). Planning is a delicate balancing act. Retailers can miss out on a hot trend if planners are being overly cautious and buying too little - by the time they reorder the stock, it's usually too late. Contrastingly, buying too much of a product could lead to an overstock issue and attract hefty markdowns, which will damage your margins and add to the growing number of unsold goods ending up in landfills.
Retail Market Intelligence complements the data merchandisers use on a day-to-day basis, adding another layer of protection to the million-dollar decisions you're making for your category. With visibility on the number of styles launched, discounted and selling each day, you can adjust your assortments accordingly, ensuring you're only putting maximum units behind the winning items that will turn profits.
4. Understanding the consumer
Thanks to the internet, the rise of smartphones and social media, consumers are more connected with brands than ever. They expect seamless and tailored customer service, as well as for businesses to be responsive to social and political issues.
Consumers' fashion awareness has ramped up, making them also responsible for setting some of the next trends your business will be investing in. Look at some of the recent trends that have achieved viral success, like Regencycore, Cottagecore and Dark Academia. These looks may have appeared on the runway, but that's not where they started. Platforms such as TikTok have served as an incubator for Gen-Z style tribes to experiment with new aesthetics before they hit the mainstream, acting as a disruptor to the traditional trend funnel.
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5. Understanding new markets
With globalization and troubled local economies, many retailers have pushed for overseas expansion. Yet, growth without thorough research and understanding of foreign markets can lead to mistakes. With international travel paused, retailers are even more challenged in tapping into new regions. It's critical for any business with expansion plans to know the local competition, pricing and consumer. This is where EDITED global data comes in, giving retailers insight into new regions without leaving their desk - or couch if you're working from home! Businesses can examine what their overseas competitors are stocking and how products are being priced and discounted. They can also see what trends are selling compared to their home country, shedding light on what appeals to the local consumer to minimize expansion risks.
6. Battling the high cost and low return of brick-and-mortar
The pandemic accelerated the harsh reality that the future of retail belongs to digital. Even as stores begin to reopen, physical locations will only rack up eye-watering costs to operate while consumers continue to prioritize the convenience of shopping online.
On average, renting in London’s Oxford street is £143.75 per square foot. The Debenhams store in this location clocked in at 370,000 sq ft, making yearly rent £53.1m – nearly the same amount boohoo purchased the 242-year-old department store for at the start of the year. Taking into account footfall slumped 63% during the first wave and then 65% over the November lockdown, that’s a nauseatingly high operational cost with no return. Throw business tax on top of that and brick-and-mortar is becoming commercially unviable, further underscoring why investing in ecommerce is business-critical in 2021 and beyond.
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