With Q1 now closed, how did retail shape up? What are consumers digging and did brands get it in time?
Industry press talking about the so-called ‘retail apocalypse’ is classic fear-mongering. Certainly retail has changed and will continue to do so in the coming years. But what it overlooks is the cool and innovative things that are happening in our industry. Not to mention the fact that consumers are still buying stuff – it might just be from a different place.
In fact, the 2017 holidays were unexpectedly bright for many. So how has retail fared so far in 2018?
Killing it in Q1
Here are the retailers who’ve announced a promising start to the year:
- Abercrombie & Fitch is back. Its stock rose nearly 40% in Q1 as comparable sales trends continued to improve and gross margins continued to shift upwards.
- Like-for-like sales at fast fashion retailer Little Mistress Group have soared 26.4% year on year for the three months to March 2018.
- Puma is notching up activewear wins, now on track for net sales to grow 10% each year to 2022.
- Levi’s has upped its full year guidance to 8% following a 24% net revenue increase. That’s driven by strong brand growth across all regions and channels.
- Macy’s posted its 34th consecutive quarter of double-digit growth in digital. The retailer has invested in technology to make check-out wait times shorter and to augment the experience of purchasing furniture.
Meanwhile, H&M has reported a dismal Q1, with flat year-on-year sales and plummeting operating profits. The retailer is struggling with high inventory levels it can’t clear. Meanwhile, the retailer’s new brands’ sales have grown 15% year-on-year and online sales are up 20%.
How they did it
Little Mistress achieved its stellar sales “working with 36% less stock” and adopting a strategy to buy closer to season. Puma has refocused its business on sports products, scaling back on the fashion segment. And A&F has invested deeply in its best performing brand, Hollister.
The themes here are committing to digital, focusing on what does well within brand and not over-investing. See, retail is not dead – it’s just the skills to do it best have shifted.
Q1 retail winners were committed to digital, focus on the best-performing elements of their brand and don’t over-invest.
Today, with a more crowded market place and new spend being committed to innovating in digital, every single part of a retailer’s product assortment has to connect.
So, how many of Q1’s bestselling trends did you buy into?
The bestselling trends of Q1
Round lenses are still dominating, making up 39% of all sunglass arrivals, but it’s small lenses which have been Q1’s trend hit. You can thank Kanye’s memo for this one, but it’s a look backed by luxury brands like Illesteva and Prada, as well as across the fast fashion landscape.
Expect these to keep selling through the year – no doubt that Coachella next week will be driving this one fiercely.
2. Cross-body bags
New arrivals of the cross-body bag have increased, taking up 26% of bag arrivals – a 14% increase from Q4. The flight bag and waist bag/fanny pack are the most dominant cross-body styles for either gender. It’s a highly functional look that will make an impact through the summer and into fall.
Such a big trend within womenswear, this one has even filtered through to men’s. Berets are selling well, and although we expect to see a high summer dip, watch this trend – you should consider it for Q3 2018.
4. Chunky Sole Sneakers
It’s the Balenciaga effect – who last year took the normcore theme to the extreme with 80s dad sneakers bearing chunky soles. For Q1 these took on cartoonist proportions at the likes of Zara and Topshop. As we’ve seen in consumer sneaker trends recently, we can expect at least two seasons from this one.
5. It’s all yellow
Yellow was a recurring shade in Q1 bestsellers spanning the full market from luxury to mass in accessories, apparel and footwear. And though Pantone called Ultra Violet as its Color of the Year, data suggests otherwise. More yellow items sold out in Q1 than purple.
Q1 new arrivals of culottes were up 56% on Q1 2017, with big uptake on the mass market. Pleated metallics and bold colors are working well – though these are also a great workwear category item as invested in by ASOS, Everlane and Frank & Oak
7. Striped everything
You read it here first: bold stripes will be this summer’s key print story. New arrivals are up by an astounding 43%, given the print is such a perennial. The print is selling well on midi dresses, in pants and on skirts across a huge span of price points.
8. Paperbag waist
This one is a bit of surprise trend, having grown 344% in Q1 on last year. Trousers account for 51% of the paperbag waist assortment, with shorts and skirts also receiving notable attention. Pants are selling best, but there have been some key skirt pieces from Bershka and Zara.
9. Slogan tops
International Women’s Day and the Women’s March fell in Q1 and retailers were prepped for it with t-shirts bearing positive message slogans. With the high turnover in social language trends and memes, this is a trend that will run and run. Staying on top of the right slogans is where you need to pay attention.
Although blazers are performing well across the board, there’s a very specific shape of blazer that’s been a killer hit in muted pink right across luxury and mass markets.
These will probably have peaked in the next month or two, but the silhouette will stick with us into Fall 2018 – make sure you’ve included a longer-line double breasted style in your workwear offering.
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