As the weather becomes more and more unpredictable every passing year, seasons are no longer as clearly defined by months as the case earlier. Retailers all over the globe are becoming cautious, looking at ordering ‘closer to the season’ so as to control the effect of unpredictable weather on footfalls and preferences. It has been seen that summers are hitting the shores a lot early than before, while winters are shrinking in duration, sudden adverse rains and storms are also affecting sales. In this unpredictability – gauging what products to place on the shelves at what time – is a growing concern, forcing major brands both in the US and Europe to change the way they source, place orders and manage inventory efficiently. Already witnessing the change, manufacturers are also preparing themselves to find ways to innovate buying cycles which is only to become a lot safer in the near future…
The focus of retail in the US in the first two months is generally on clearance of Christmas apparel, but due to warm weather this year, the sales of cold-weather merchandise like winter coats, boots and other winter basics was much weaker than expected. However, on the other hand the warm weather welcomed a pleasant boom in spring products introduced in February initiating the coming of the spring/summer season earlier than the usual this year, with about 6 per cent increase in overall retail due to weather for the first quarter. While same-store sales at Gap climbed 4 per cent recording its first increase in 8 months, Macy’s reported March sales up by 7.3 per cent. Enjoying the benefits of the right weather at the wrong time, Terry Lundgren, Chairman, President and Chief Executive Officer of Macy’s claimed, “Early warm weather drew attention to our outstanding assortments of fresh spring goods, which were received enthusiastically by customers.”
Target joined the list of successful retailers lifting its first quarter earnings after posting a 7.9 per cent rise in sales on the back of unexpectedly strong sales due to ‘an earlier Easter and favourable weather this year’. Bringing about a boost for certain product categories, US sales of short-sleeved shirts jumped 25 per cent year-on-year, while sales of shorts were up 23 per cent, estimating into a double-digit increase than last season.
Following a poor weather across Europe, deeply affected at the moment are retailers, specifically in the UK, who are facing the adverse effects of the wettest April, which contributed to a 3.3 per cent fall in like-for-like retail sales by value, and suffering yet again due to bad windy weather in July. Going grossly wrong with the calculation and assortment of their merchandise was Marks & Spencer which reported a 0.3 per cent drop in UK clothing sales over the three months to 31 March as it failed to buy deeply enough on its best-selling women’s summer wear lines, admitting of running short of stock. During the quarter, the retailer sold around 1,00,000 items of knitwear when it could have actually sold around 3,00,000. Facing a similar problem in July, it claimed that clothing sales were yet again impacted by merchandising issues in its spring/summer collections. Finding it difficult to respond to unexpected changes in the weather, M&S Chief Executive Marc Bolland suggested that “while retailers can’t control the weather, they can take measures to ensure they deal with it as effectively as possible”.
[bleft]With inventory systems changing from forecast-driven supply chains to consumer-driven demand chains, the impact of weather has today become more evident.”[/bleft]
Leaving the retailers in havoc even the hype around the Queen’s Jubilee, Euro 2012 and London Games didn’t turn out to be much of assistance as customers preferred to stay indoors facing adverse rain, rather than hitting the high streets to enjoy a spot of shopping. Even as the weather had a bad effect on the country’s brick-n-mortar stores, online shopping figures dramatically went on a rise, as online fashion retailer like Asos capitalised on the consumers’ convenience and comfort of shopping online to avoid the downpours, reporting a 31 per cent year-on-year rise in retail sales to £ 137 million for the three months to 30th June 2012. Raising alarm Sarah Cordey, a spokeswoman for the British Retail Consortium (BRC) said, “It is hard for retailers to respond to unseasonal weather of the sort we have had recently. Decisions on stock and purchasing to respond to such weather uncertainty have to be made a fair bit in advance.”
With retailers confused as to what stock and when to buy and in what quantities, required at the moment is a systematic planning for unexpected demand and subsequent order flow to help retailers with inventory management. With inventory systems changing from forecast-driven supply chains to consumer-driven demand chains, the impact of weather has today become more evident. A key trick being followed by most brands now is working on shorter and more flexible cycles and not maintaining huge inventories much in advance. Fast fashion retailers are therefore seen to be in a better position than other big brands who do not have flexible models of buying closer to the season and beating these short-lived weather blips.
According to reports retailers like Debenhams, Kohl’s and Ross Stores who have now collaborated with weather research firms are looking at adjusting their deliveries from their manufacturers so that they have more products earlier in the year when there is more favourable weather as against having additional shipments coming in a little bit later and missing that demand if the season closes earlier than predicted.
