Op-Ed: Merchandising in a Post Covid World

Are we going phytigal?

“The current uncertain climate of the fashion retail industry, coupled with ever-evolving customer behavior and three overlapping seasons at a time, have brought data analytics, planning agility and brand relations to the forefront of inventory merchandising,” expresses Nahed Soueid Atallah, ex VP of Planning and Merchandising at Al Tayer Group.

About Nahed Soueid Atallah

With 30 years work experience in Dubai, Nahed boasts premier skillsets planning and merchandising within Luxury and Lifestyle Fashion, Home and Jewelry brands. Specifically in the subjects of: budget and inventory planning, margin and OTB management, forecasting and analysis, P and L management, online pure players launches, B&M store openings, people training and mentoring, team leadership and more. Nahed served as the VP of Merchandising and Planning at Al Tayer Group between 2016-2020 and now is a Freelance Consultant for premier clients and brands.

It’s evident that recent and historical data that may no longer apply in our new world. Therefore, leading brands are discussing the probabilities of of season-less fashion and the importance of sustainability, two subjects that are becoming crucial to every brand and retailer alike. The questions on every merchandiser’s mind are:

  • What will my customer’s shopping behavior post Covid-19 look like?
  • Will customer behavior revert back to normal or will we see a ‘new normal’?
  • What is the ‘new normal’?
  • Will customers shop online, in store or will they opt for a ‘phygital’ (physical-digital) experience in the future?
  • Will customers shop low-price high-street fashion or will they go for more durable and trusted luxury brands?
  • How much of my SS20 inventory should I move to carryover?
  • How much of my FW20 orders will I cancel? From which categories? And from which brands?
  • Will brands be able to fulfill my orders?
  • How will deliveries/drops change, and how will my strategy adapt?
  • How much open-to-buy should I budget for my SS21 orders?

In order to begin answering these questions, we first need to understand our audience’s purchasing preferences and shopping behaviors: during the first few months of the Coronavirus pandemic, and especially during the lockdown period, we saw a behavioral shift in regional consumers’ purchasing patterns; with some categories doing much better year-on-year than others, such as loungewear, skincare and home accessories. As the crisis stabilizes and restrictions around the region begin to ease and the malls reopen, we can observe the needle move back towards the original shopping behavior, as well as an increase in previously-declining categories such as swimwear and eveningwear. What this means for us as merchandisers is that we find ourselves in a delicate situation, where we need to navigate our current stock-on-hand and future orders very carefully.

Photo by Daria Shevtsova from Pexels

To achieve the aforementioned objective and implement the correct strategy, we can rely on the following tools:

  1.  Data mining and analytics: data is and will always be the base of all strategic decision-making. Now more than ever, you will need to deep-dive into your data often and consistently.
  2. Planning agility: re-forecast, react, learn to change course swiftly and frequently.
  3. Brand relations: negotiate payments, drops, reorders, returns, and cancellations.

Many brands are increasing the continuity/carryover proportion of their collections and changing the frequency of orders and drops to reduce risk.

After an enlightening start to the year 2020, many companies are now talking about digital transformation. In order to effectively transition the business model, the transformation should not only be focused on the digital aspect of it, but also take into account the different parts of the business that play a crucial role in any prosperous transformation: notably the way we think, act and work. The customer is in the pilot seat now, and in order to navigate successfully through these hard times, we need to transform. Digital? Yes. Data-driven? Yes. But the most important key to success? Culture and People.

"We need to navigate our current stock-on-hand and future orders very carefully."