Are fashion trends moving too fast for retail?
With the influence of mobile and social media pushing styles in and out of fashion at a breakneck pace, some retailers are admitting that they aren’t able to catch up.
“The fact is that we’re seeing mobile technology drive shifts in consumer behavior and spending patterns at a faster pace than our industry has been able to keep up with,” said Dick Johnson, CEO of Foot Locker on his company’s August 18 second-quarter conference call. “With constant access to new influences, trends, information and ideas, consumers’ attention spans are getting shorter, and we’re seeing that they’re moving from one style to the next faster than ever before.”
Foot Locker’s second-quarter results came in well short of Wall Street’s expectations as same-store sales fell 6 percent.
The sneaker retailer is working with suppliers to significantly shorten the product development cycle, including reducing ordering and manufacturing lead times and even storytelling and marketing timelines.
“This consumer has access to an awful lot of information about products,” he said. “So while we buy on a six-month future sort of window, trying to carve off some open-to-buy that have more flexibility for in-season opportunity is just really important.”
Hibbett Sports, which also recently delivered disappointing quarterly results, is facing similar issues.
“Things don’t last as long as they used to be,” said Jeff Rosenthal, CEO, on Hibbett’s second-quarter conference call. “The vendors have to get much quicker on bringing new products faster to the marketplace because people want new.”
To react faster to trends, Urban Outfitters’ team during the past quarter shifted from buying the majority of product prior to selling time to buying a smaller percentage upfront and chasing the majority on a fast-turnaround basis.
Trish Donnelly, global CEO, Urban Outfitters Group, said on her company’s quarterly conference call, “While the introduction and adoption of the new business methodology is never perfect and this new way of working is still a work in progress, our adoption of a process for making product-related decisions closer to delivery date is a very meaningful step and we believe it will set us up for future success.”
- Foot Locker, Inc. Reports 2017 Second Quarter Results – Foot Locker
- Foot Locker’s Q2 2017 Earnings Call Transcript – Seeking Alpha
- Hibbett Reports Second Quarter Fiscal 2018 Results – Hibbett Sports
- Hibbett Sports’ Q2 2017 Earnings Call Transcript – Seeking Alpha
- URBN Reports Q2 Results – Urban Outfitters
- Urban Outfitters’ Q2 2018 Earnings Call Transcript – Seeking Alpha
DISCUSSION QUESTIONS: Do you support the contention that digital’s influence is causing trends to move faster than ever? What remedies do categories with traditionally long lead times, such as footwear, have in responding quicker to trends?