Regular promotions schedule may soon come to an end as the impact of the COVID-19 pandemic may result in a decline of off-season merchandise and an overabundance of product. Fashion brands and retailers that typically deliver their collections in April or May, are deferring them to June, July and August. This will further defer their fall sales to September and October, in step with the start of the fall season.
Downsizing collections to cut losses
To eliminate liability that comes with retailers canceling and returning orders, many fashion companies are downsizing their collections. Major department stores have stopped accepting product since March, purchase orders be damned.
Owner of fashion brands such Equipment, Joie and Current/Elliott, the Collected Group has reduced its planned summer collections by one-third. The
size of one of those assortments will be divided among the three scheduled deliveries to retain regular. The company, is also skipping the resort season altogether, which typically enters stores in October, November and December. Though its fall collections, will not change in size, but will drop in six monthly shipments throughout the back half of the year.
Shifting to profit-making products
One of the solutions, Jess Brondo Davidoff, Managing Partner at crisis management firm Sprezzatura is focusing on is shifting its attention to products that drive the biggest bottom line. This also includes identifying the brand’s customers, their buying patterns and the products that bring in most profits. This is determined by factoring in the discounts and performance marketing driving their sales, their rate of returns, and their cost of shipping and warehousing.
Many brands’ are also moving to streamlined assortments, with high sell-through at full price. They are not building additional dollars into their prices, because they know it will be marked down. For instance, Collected Group doesn’t plan to deliver products that are not seasonally appropriate as it just goes to perpetuate the already existing vicious cycle of markdowns, which has been most frequent over the last 12 months.
