Avoiding overstock

For many fashion brands overstock was one of their top problems in 2020. This is a problem which has been rife in the fashion industry for years and was only made worse by the pandemic. Even before Covid-19 only 60% of garments were sold at full price showing that brands have hugely excessive inventories & require collection-wide markdowns.

BoF and McKinsey interviewed fashion execs to find out their methods for avoiding overstock in the future for their State of Fashion 2020 report. The top solutions were:

  1. Reduce number of SKUs

  2. Improve analytics

  3. Agile supply chains

  4. Revise assortments

  5. Advanced analytics

  6. Short product development time

  7. Move towards seasonless fashion

  8. Reduce number of collections

However, due to financial constraints, small teams and lack of analytical support SME and independent fashion brands cannot focus on all 8 of these aspects. If you’re an SME independent fashion brand the most practical steps you can take to reduce overstock are:

  • Create products made-to-order where possible

Moving towards an effective, demand-led model or developing made-to-order garments is a great way to avoid overstock. As an SME independent designer you have the flexibility to create products made-to-order in many circumstances. Although this might not be an option for all brands. Reducing the amount of stock you make or buy and starting to make on demand or to order can effectively reduce risk, lower financial output and help you make more profit.

  • Maintain a great relationship & communication with your customers to create what they want

Your relationship with your customers can very effectively support a reduction in overstock. Finding out exactly what they want, when they want it and how they want it is the perfect starting point. If you can try testing products with your target customer groups before you enter into production. Our clients at Rockett Fashion have found this to be a really useful tool for creating exactly the right products.

  • Design seasonless fashion that can be sold all year round

‘Seasonless’ is fashion that does not conform to traditional seasons or trends. Brands are starting to gravitate towards showing timeless pieces for year-round wardrobes. It allows designers to have more creative freedom and less restrictions. From a sustainability perspective garments will have a longer shelf life both on the shop floor and in customers' wardrobes.

  • Keep your collections & assortments low risk, simple & on brand

Developing low-risk collections and working on a seasonless basis allows designers time to be creative and develop organic and authentic collections. It marks a clear shift away from trends towards embracing exactly what your brand stands for.

  • Reduce the number of collections you launch each year to fit your own rhythm

As an independent fashion brand you have the scope and flexibility to design, develop, showcase and produce exactly how you’d like to! If you’d like some support with collection planning, timelines and goal setting you can download our collection planning template here.

You can read more about the issues of overproduction here in our #stopoverproduction blog post.

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