Retail Outlook for Fashion
By David Dorf on Jan 23, 2009
Here's a scary statistic: Normally 4% of women surveyed by America's Research Group say they have no plans to purchase new clothing in the coming year. For 2009, one third of women say they will purchase no new clothing. Yikes! That can't be good for retailers. Many fashion retailers like Charming Shoppes (Lane Bryant, Fashion Bug, Catherine's), Gap, Eddie Bauer, Timberland, and Ann Taylor have already closed a significant number of locations, and I have to assume there's more to come in 2009. So what else can they do?
At NRF I asked a large fashion retailer if they were investing in software this year, and they basically said that they had reduced the budget but were still investing in the things that directly touch the customer, like POS. A slowdown is a great time to invest in stores so that when the economy turns around, they are well positioned.
Another area to consider is price optimization. Setting the right initial price, sale price, and eventually mark-down cadence are crucial to maximizing margins. This is an area where retailers can realize an immediate payback by relying more on science and less on "the way its always been done."
At NRF, Oracle Retail announced the Fashion Bundle, a collection of integrated products to support the fashion industry. It includes demand forecasting, item life-cycle planning, assortment planning, size profile optimization, and in-season optimization to name a few areas. These can be implemented incrementally, each providing its own distinct value, culminating in a comprehensive solution that helps retailers make better, more profitable buying decisions.
Instead of strictly playing defense, now might be the right time for fashion retailers to go on the offense and differentiate themselves in the market.