Seasonality can be controlled in any business and footwear - one of the most revealing examples for such strategies. Fashion sales expert SR, author of the business blog, Elena Vinogradova, analyzes in detail the causes of seasonal fluctuations in the shoe business and solutions to problems.
How to understand if there are seasonal fluctuations in the business?
If the analysis of the company's sales over the past few years (at least three years) shows downturns and ups in certain periods coinciding annually, we can talk about seasonality in sales. Fluctuations within 10-20% of the average monthly sales are considered to be moderately seasonal, especially if the revenue growth is stable over the year. But if the sales volume in certain months decreases by 30% - there is a pronounced seasonality of the business. This is easily seen on the example of sales of shoe cosmetics and accessories - creams, paints, impregnations, brushes and other accessories. The peak of sales usually falls on October-January, then fall in April-August. The reason is weather factors that are important for shoe sales. Shoes need to be cleaned all year round, but if in the rainy season, slush and reagents it is vital for shoes, in the summer few people remember leaving. Of course, in this segment there are also stably demanded positions: laces, sponges and shoe horns, but because of the small weight in the revenue, they do not compensate for the profit during a period of falling sales.
What to do in this situation?
Seasonality is typical for many products. At the same time, it is important to understand whether the product is really pronounced seasonal in nature, or whether demand for it can be maintained at the required level during a recession.
If a company produces, for example, only rubber slates, then to neutralize the weather factor of seasonality, one can enter new sales markets: where summer is all year round. In addition to smoothing the seasonal sales schedule, this will allow you to receive continuous feedback and improve the product, improving its characteristics. There is a strategy of focusing on minimizing costs during a seasonal decline in sales, and it also works, but sometimes it can be argued with external factors. Of course, you need to prepare for the launch of such programs, having considered all the possible advantages, costs and risks.
When to present seasonal goods?
Presentation of the collection is one of the tools that can greatly affect the sales of a shoe store, both in plus and minus.
What does the buyer see when entering the store?
Firstly, shoes are sold there.
Secondly, which one. If in October there will be mules and espadrilles in the window of an ordinary Russian store, then the chances of attracting customers and big sales fall sharply. The law of “first impressions” will work in favor of the seasonal assortment.
The timing of the seasonal collection in the store is determined by sales statistics, climate and price segment. The weather factor is obvious, let's go straight to the numbers. Successful business is driven by analytics. Based on the analysis of sales you form:
A) the assortment of the store;
B) the share of goods of certain groups in the hall and in the window.
In the latter case, it is important to consider several parameters: the type of shoe, price and seasonality. If the store is a multi-brand, then we also analyze brand sales.
Given: children's shoe store, month of August, mass market segment.
Demand for summer shoes has already been markedly reduced, ahead of the school year and at the top of sales is the school range (shoes, moccasins, low shoes, as well as sports subjects: sneakers, slip-ons and gym shoes). Plus, buyers are beginning to show interest in the fall collections: boots and boots.
According to statistics from previous seasons in August, school collections bring 50-60% of revenue, provided sales start no later than 5-10 in August, summer - 30%, autumn - 10%.
Question: What might our store look like in August?
As a result, we get a calculation that will provide us with:
1) Sales of seasonal school assortment.
2) Reducing the remains of the summer collection.
3) Formation of demand for the autumn collection and understanding of what the buyer needs first of all.
Of course, on the Russian market, seasonality has a pronounced regional specificity, schedules and sales structure, the boundaries of the seasons in the southern and northern regions differ, therefore, the issue of presenting seasonal goods must be approached individually. The percentage of summer and autumn shoes in August in the window and in the hall will determine the climatic features of the region.
Price segment also has a direct impact on the timing of seasonal collections.
The generally accepted season periods are: February-July for spring-summer collections and August-January for fall-winter collections. In the economy, mass market and mid-price segments, companies generally adhere to these deadlines, starting with new products at the beginning of the period or with a shift to the right by 2-4 weeks.
In the premium and luxury segment, the presentation of seasonal collections traditionally begins earlier: sale is parallel and new products are arriving. The new collection is located deep in the hall and its presence is gradually increasing. When new products occupy more than a third of the assortment, priorities in representation change - the new collection comes to the fore, discounted goods decorated with POS materials go to far zones. The range is constantly updated and this is the right situation, giving the client the right to choose.
The sales periods of seasonal assortment in premium and luxury also often start earlier - in May, because customers of the high price segment go on vacation early and for a long time.
If we take the Western experience, European brands act similarly, accustoming the client to the new collection already at discounts - for example, from the end of December-January. Management understands that there will be no big sales, because not everyone is willing to spend spontaneously. The goal is to “watch” the client so that he gets acquainted with the new products and makes a purchase later, already understanding where and what he saw.
In my experience, this scheme - of shifting the traditional schedule of presenting seasonal collections to the left - is generally more effective today. The rule "brought earlier - sold earlier" has not been canceled. Plus, you get more frequent collections updates (what the buyer is waiting for and demanding now) and the possibility of an increase in the sale margin due to the parallel sale of new products at a regular price.
Moving the revenue schedule to an earlier date, it is necessary to coordinate this with the capabilities of suppliers of goods and services (factories, wholesalers, transport companies). And also take into account the capabilities of the retail space in terms of equipment capacity.
When seasonal product sales fall
During the season, we can observe a drop in sales of seasonal collections, not related to weather factors. What influences this? Consider some of the reasons:
Reasons revealed, decide how to proceed
1. Embossed dimensional meshes: we group models in unit sizes into separate stands or collect maximum dimensional meshes in stores using network transfer.
2. Lack of updating the assortment: we change the window at least 1 times in 2 weeks, the hall is similar. The modern buyer is focused on new arrivals. If there are no new products for a month, we create them artificially using visual merchandising:
The task of regularly updating the assortment is to catch and hold the gaze of the buyer, draw attention to new models, and constantly maintain dynamics and life in the store. Often, noticing changes, buyers ask about new arrivals and notice even those models that have not been seen before.
3. Decline in consumer activity: these periods, companies working in the fashion business sector offset the seasonal sales: at the end of January and February there are maximum discounts on winter collections, in July you can buy current summer shoes at a profit.
The presentation of seasonal collections on sale has its own characteristics:
In addition to discounts that help to realize the seasonal assortment, the sales period can be used to prepare for the implementation of the following collection:
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