How fashion, apparel, and footwear brands can leverage cohort analysis of sales data across their network to positively impact their relationships with retail stores, improve inventory turn, and reduce product obsolescence.
For many brands, the partnership with retail stores can sometimes be difficult. Retail buyers often have ideas of what will sell best in their stores, while brand sales representatives might bring a different perspective to the table. The final buy decision can often reflect a power dynamic in the partnership, even when both parties have the same end-goal (revenue) in mind. Rather than battling it out over differing opinions (which are inherently biased), this three-step process can go a long way toward better alignment and partnership between brands and retailers in the fashion, apparel, and footwear industry.
Step 1: Collect All the Data
While retailers might be using their own historical sales data to predict future demand, their visibility is limited to what they’ve purchased in the past. In contrast, brands are selling a much broader range of their products to more than one retail chain. Because of this, brands are in a better position to provide statistically-backed recommendations on product assortment. To start, you should collect and leverage Point-of-Sale (POS) data across all of your products and retail channels.
Step 2: Apply Cohort Analysis
Taking the data you’ve collected, Cohort Analysis is meant to find and segment groups that share common characteristics or experiences. This produces more specific and relevant insights than would analyzing the entire dataset as a unit. Done correctly, Cohort Analysis highlights the optimal product mix based on the unique characteristics of the particular store while leveraging more input data than would be available to the retailer themselves.
Step 3: Share Your Findings
The key piece of this process is to share your findings with your retail partners and explain the product assortment you are recommending is statistically-proven to be the optimal mix. Bringing this analysis to the table shifts the conversation away from opinions and intuition-based judgments. The discussion can now focus on aligning the brand’s vision with the retailer’s goals and mending some of the inelegance of this buyer/seller relationship.
If you wish to strengthen your partnership with retailers, but struggle to get them to buy into your short- or long-term vision, ask Vanguard to help you shift the conversation with Product Assortment Optimization powered by Advanced Cohort Analysis.
Apparel and footwear brands should leverage advanced analytics to model product assortments and provide statistically-backed recommendations to their retail buyers to strengthen the trust and alignment within the partnership and improve profits all around.