The summer holidays are over, the normal rhythm seems to have started, people are slowly going back to the office and the weather is turning into autumn mode. Perfectly timed. If it gets chilly and dark outside, coats and jackets can be sold. That's a good thing. But what did last season look like for retail and what exactly can we expect? Trade association Euretco told us all about it.
There is a lot of positive to report about the past summer season. For example, for the fashion retailer, the average resale at the end of August was 85 percent (5 percent higher than the year before), there was 30 percent less stock in stores than in 2020 and the margin was on average 2 percent higher compared to the year before. In total, turnover in the women's fashion category was 14 percent higher at the end of August than last year. For men's fashion this was 8 percent. Due to the pandemic, the past 3 seasons have been unpredictable, but the retailer also seems to have learned from it. In addition to a new creative form of customer contact, the fashion stores have been forced to plan and are using their stock more efficiently. Also, the sales seasons are now being stretched, which means that the discount sales have a later start. This has the advantage that it is possible to discount in a more targeted way, which in turn results in better margins. If retailers manage to hold on to this, the coming season looks promising. The autumn weather is cooperating well, and even though the shopping behavior of consumers has changed due to the pandemic, they still very well know their way to the fashion stores. Still, challenges remain, according to Euretco.
Now, suppliers experience more difficulty with delivering on time. There is an immense shortage of containers in the eastern part of the world, with the result that transport costs have become as much as 8 to 10 percent more expensive. In fact, there have been noises in the industry about suppliers who have indicated that they cannot deliver on time. They anticipate that the first autumn deliveries will not be delayed too much, otherwise the momentum will be over and you will be too close to the next season. It remains to be seen how this will develop in the coming weeks. This is a very unfavorable situation for both the entrepreneur and supplier.
Due to the higher costs and the lack of delivery, the retailer is increasingly looking at possibilities closer to home. This wish is also shared by the consumer, who has started to buy even more consciously due to corona. A big additional advantage: by producing closer to home, the extra transport costs will be eliminated, which will be immediately noticeable.
The desired turnover level of 2019 may not have been achieved yet, but the retailer is certainly on the right track. For most fashion retailers, the attractive liquidity position ensures security for the future. The stores look well filled and full of inspiration, ready for the coming season. Now that the last items of the summer collection are disappearing from the stores, the fashion retailer can start the new sales season with confidence again.
Written by Marjolein Stormezand in collaboration with Euretco.