The Traditional Seasonal Drops Do Not Work
By Reggae Elliss
The recent extended summer, with warm temperatures well into May, generated a lot of retail commentary in the wider media, much of it asking why the fashion world continues to drop winter styles in February.
One article in the Sydney Morning Herald on June 5 focused on the early sales that Myers, David Jones and some speciality stores embarked on in May. Not so surprising when you consider the winter stock has been on the shelves since February
But as the writer asked: “Who was the bright spark that decided that shops should start stocking winter clothing in February? I mean, really. No one in Australia has ever wanted to buy a coat in February.”
The SMH story included quotes from Steve Kulmar, a senior strategist at retail consultancy firm Retail Oasis and he asked a similar question:
“Why are we still stuck in this routine of somehow imagining, unbelievably, that customers are going to want to buy winter stock in the two hottest months of the year?” Kulmar says. He says shops should start stocking winter clothing in late April, leave it full price until June, and not start the clearance until July or August.
Product perfect for May
Of course this is all very applicable to the surf retail industry and the topic was raised by Volcom CEO Dougall Walker at the last SBIA Roundtable held in May, Dougall suggesting that we need to look beyond the current Four Season delivery. It was an informal discussion aimed at getting people thinking about possible changes, looking at different “capsules” to be delivered within season.
Since the roundtable, Dougall has come up with a few ideas that will no doubt generate further discussion over the next few months.
“Rather than refer to it as “Seasonal Realignment” I am referring to it as Product Delivery Realignment, “ said Dougall. “This is because the industry’s traditional seasons that we have all worked our businesses around, bare no resemblance to seasonal weather or product demand periods.”
Dougall also believes the industry needs to move away from seasonal references, but look at dividing purchasing into six distinct delivery blocks, (DBs) ie every two months.
“Both retailers and reps are flat out running their business so the last thing most want is more range releases,” said Dougall. “So the suggestion would be to have three releases per year, let’s call them Indenting Terms (IT) that present two DB’s each, four months in total.
“The “Indenting terms” would differ from the current seasonal indents,” Dougall added, “as the new indenting terms are designed to help promote the correct and appropriate seasonal product. They are also dictated by customers’ buying patterns rather than inflexible “correct” seasons or Calendar/financial years.”
Of course, for changes to occur the brands and retailers will need to work together and this will be discussed by the SBIA Board and at the Softgoods CEO Roundtable scheduled for next month.
Some retailers have already expressed tentative support for change and are open to further discussion. Anthony Wilson, owner of Saltwater Wine/ Stormriders and SBIA president is one who believes we need to seriously look at the current delivery alignment.
“From my personal point of view I think we have the whole product to market paradigm wrong,” said Wilson. “ We know from the consumer survey results that 70% of our customers are coming into store once a month or more, yet the first two months of every season are always loaded up for first available product and then very little or none in the back end of the season.
“The reality is we need to be dropping fresh seasonally-relevant product into our collective doorways every month, without fail. If we don’t do that we look tired and boring pretty quickly.”
“That’s why pre-shipping is such a counterintuitive exercise. It is now the end of June and we have been pre-shipped by a number of brands as far out as September delivery. If we put that product into store now those brands, and my shops, are going to look pretty tired by October when the new ranges rolls in.”
Macka’s thoughts are shared by Paul Green, owner of Slimes on the NSW Central Coast and an experienced surf retailer with 31 years skin in the game. In an interview in this month’s SBIA newsletter, Greeny reckons that the current seasonal distribution means customers “have been seeing the same product for three or four months. As retailers we have to start buying the right product at the right time. When we first started talking about four seasons– I voted for six.”
For Wilson, these discussions are imperative for the success and future growth of the industry.
“ I get the argument that Australia is a big country with a diverse climate and that’s a reason for needing a broad product assortment …but fleece in February? The single hottest month of the year? ‘C’mon. At the end of the day the timing of product to market has got to be driven by the brands so it’s really refreshing to hear what Dougall is putting forward.”
Product perfect for February
As we said earlier, any change is dependent on the brands and retailers working together. For Dougall Walker, this means working together on what he refers to as the ABCs:
A. Appropriate Product for each DB to increase the opportunity for better sell through & less excess inventory sold at low margins.
B. Budget Accordingly. Retailers need to spread out their purchases to better reflect their customers buying patterns. Brands need to adjust their budgets as well and not pressure reps and retailers by using previous year’s monthly or quarterly sales targets.
Brands need to-
- Offer more new product that is more appropriate for the DB’s
- Not try to force reps to sell & retailers to buy too much product before it is weather appropriate.
- Not pre ship product more than one month prior to the requested deliver month unless requested by the retailer.
Retailers need to-
- Adjust their purchasing to support weather appropriate product offered by the brands.
- Adjust budgets so the purchases are spread more evenly across DB’s that better reflect customer-buying patterns.
- Not accept pre-shipped stock that could fill their stores with product that will have very minimal chance of immediate acceptable sell through.
“Of course none of the above is set in stone,” Dougall said. “But hopefully it will promote thoughtful discussion and lead to much needed change.”
Dougall Walker with Tom Carroll