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Merchants seek the right balance between classics and fad items
While new hot products come and go, classics never go out of style. For retailers, this means that maximizing revenue is a balancing act: it’s important to appeal to customers who are looking for the latest fads while knowing to keep reliable standbys in stock. Whether a retailer sells clothing, home goods or even paper and packaging products, finding the right balance between trending and evergreen items is essential if you hope to appeal to a wide and engaged consumer base.
At Paper Mart, we’ve prioritized offering high quality shipping supplies, gift wrap and party supplies at affordable prices. With a significant percentage of our revenue coming from perennial favorites like boxes, gift bags and wrapping paper, we know how important it is to pinpoint evergreen items that need to be in our inventory around the clock.
What about the remaining product selection? That’s where we allow ourselves to get creative. We try to pinpoint fresh, eye-catching items that customers will respond to by attending trade shows, staying tuned to trends on Instagram and Pinterest and soliciting customer feedback.
Finding this balance may be easier than some retailers think. By negotiating this kind of equilibrium, merchants may join the ranks of top-tier brands that have mastered balancing acts of their own. Consider iconic brands like Chanel or Nike: they continually manufacture classic designs — think Chanel’s leather quilted bag, or Nike’s Air Force Ones — while making sure that they always have something fresh to offer such as see-through PVC totes or minimalist everyday sneakers.
While seasonal trends such as chevron wrapping paper may go out of style one day, consumers are clamoring for them in the here and now — so maximize revenue for your brand by capitalizing on the hottest items. If market demand shifts, a steady stream of revenue from your classic standbys will ensure that you don’t miss a beat.
Discussion Questions
DISCUSSION QUESTIONS: How effectively do most retailers balance buying of evergreen items with products that are part of a new fad or trend? What are the keys to retailers avoid overextending in either direction?
Poll
BrainTrust
Neil Saunders
Managing Director, GlobalData
Dave Nixon
Retail Solutions Executive, Teradata
Retailers that find the right balance of fads versus long-term classic value are the most appealing to shoppers who want to discover and buy. A fad item can add vitality and be an affordable luxury so these should not be overlooked by retailers. They help tell the retailer’s story about being on top of trends and their desire to best serve their customers. The longer term value of staples or classic items also helps tell the story of the retailer providing sustained value. The mix can be supported by display, a store-within-a-store or a pop-up, and associates should be well versed in the difference between fad and classic.
Some retailers are good at this, many are poor at it!
Most retailers, especially in apparel, seem to take the approach of buying lots of relatively safe/bland product in the hope that some of it will sell. This produces a sea of merchandise on the shop floor, which isn’t what consumers want.
Blending classic/safer options with more innovative, fashion-forward ranges is key to success. However, the latter requires confidence and an ability to interpret fashion — both skills many retailers seem to have lost!
Any store needs to hit the right balance between staple, fashion and fad merchandise. (The difference being that “fads” have a much shorter life span unless they evolve into fashion trends with more staying power.) The question of “the right balance” really depends on the nature of the retailer’s brand image and target customer. Clearly Forever 21 needs to play in a completely different world than (say) Chico’s — which is not devoid of fashion but is more dependent on staple inventory.
It’s a key question because the product life cycle of each type of merchandise — and the inventory management needed to get into and out of trends profitably — may be totally different for fads, fashion and “basics.” Retailers don’t want to be stuck with too much of a fast-moving fad; on the other hand, they don’t want to erode their in-stock levels on basics by fixating on chasing trends.
Thumbs up! This is part of the whole basis for my approach to assortment planning. Knowns and unknowns. Low risk and high risk. What is the right balance? As pointed out, few do it well. Science + art. Left brain + right brain.
Test, test, test and then dig deeper into buyer preferences and product assortment data so you can eliminate much of the risk with these decisions. The data will tell the story of what works, what doesn’t and how to effectively turn product in the store (and where in the store certain categories will be most effective). The ratio or mix should change based on the store demographic. The issue is most retailers still can’t get to that level of personalization to get this 100 percent right. But we’re evolving!
Great piece! Thanks.
It’s important for merchants to refresh their product lines during this typically slow period. That way, they can make sure there’s still some fad-based or trendy newness going on in their marketing campaigns. Doing so can lift baseline performance and close the gap between exciting promo periods and evergreen months.
Evergreen products, however, do serve a valuable function for merchants. Just because it’s past the holiday season, the summer rush, or the back-to-school push, doesn’t mean you can’t ramp up your digital marketing efforts and grow revenue with products that are enticing all year. It’s all about balance and adjusting product launches according to annual calendars.
In certain retail categories, we call those traditional items “staples.” Those are the products that have been around forever and also thrive during lifecycles and resurge even bigger when the fad of vintage products returns every so often.
It’s dependent on the definition of “fad” we’re using. I’ll go a different route and use grocery as an example.
If we’re speaking about the mix between independent and national brands of well-known/understood products (say Prego vs. Mr. Organic Ragu) I believe most retailers see the change in the consumer market and have been rightfully developing a better mix. That said, the shift has happened way too slowly.
If we’re speaking to completely new product lines (say cricket meal) in general, large retailers seem to have a reasonable mix today. That said, the improvement to be made here is getting ahead of trends (or “fads”) rather than being reactionary, which today has them jumping in on the tail end of the adoption cycle when they have the technical, research and data resources to get in earlier.