Bargain Fever Requires First-Class Fashion Logistics

fashion-logistics-bargains.jpgThe sluggish economy is hitting apparel retailers from two different sides: consumers are buying less, and they're increasingly demanding (and getting increasingly good at finding) discounts when they do.

According to Moody's, consumer spending will likely continue to slump for the foreseeable future, with year-over-year growth slowing to 4 percent in the third and fourth quarters.

This is already a tough environment for retailers. But it's made worse by the fact that a sizeable bulk of the purchases that are being made are discounted. Why? Consumers are feeling the same financial pressures retailers are, and they've gotten very, very savvy about finding ways to squeeze every dollar.

Recently, IBM Global Business Services put their ear to the digital zeitgeist and came up with some interesting statistics that show just how much consumers are craving.

According to Apparel Magazine:

Using powerful analytics software, IBM studied approximately 236,804 mentions and posts on Twitter, message boards, blogs and news sources from two time periods -- mid-April to mid-July 2011 and 2012. The IBM Social Sentiment Index reveals a more than 50 percent increase in online discussion and sharing of promotions – such as coupons and sales. This suggests that consumers have been trained to sniff out sales and share promotions with their online communities.

The analytics software measured the "affinity" – or desire – that consumers posting online have for promotions. It discovered that women have developed a much stronger desire for promotions this year compared to last year, which creates incentive for retailers to offer additional promotions and discounts this season.

Despite the increased interest and activity about online promotions, IBM's analysis surfaced a compelling trend: consumers are seeking even better promotions and deeper discounts. Indeed, the ratio of positive versus negative online comments about retail promotions declined twenty percent from 4.2 to 1 in 2011 versus 3.35 to 1 in 2012. The analysis revealed that consumers were not seeing the value from coupons and offers and the incentives were not substantial enough.

Consumers are eager to shop again, the report says, but they're willing to wait until they find the right price to do so because they're confident that the market is still on their side. Furthermore, the web and e-commerce is making it easier and easier to do so. Instead of having to spend a day driving all over town to find the best possible deal, digging up discounts on the web can be done with just a few clicks.

So it's good news that consumers are slowly opening up their wallets again, but snagging them still costs more for apparel companies. According to IMB, "timely, hyper-personalized" promotions are key to getting customers' attention in this type of competitive environment. And with lower profit margins likely, investing in hyper-efficient apparel supply chain management is critical to eek out every bit of supply chain savings companies can.

The Apparel Logistics Group can help. We're proud to offer a diverse range of end-to-end fashion logistics services — from apparel inventory control to apparel warehousing to apparel merchandising — designed especially for demanding times like these. Contact one of our apparel 3PL specialists to learn more.

Posted: 9/6/2012 2:52:40 PM by Global Administrator | with 0 comments

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