The following is a contributed article by Vivian Yu, Data Analytics and Operations Intern at Quad Analytix.
Retailers always claim to be selling this season’s “hottest trend,” but what exactly does this entail? How quickly do companies catch onto and adapt to trends, and how do they respond to the varying demands of their customers? Which brands make their money by latching onto the biggest thing first, and which attempt to wait until a trend is established before investing?
Here at Quad Analytix, our data extraction and analytics capabilities can be used to answer these questions and gain deeper insight into merchant behavior patterns and industry trends. Quad performs large-scale extraction on retail websites and visualizes the data in our web application. Our analytics team focuses on delving deeper into our raw data to isolate interesting trends and transforming them into actionable insights.
Leveraging our database, we will look at these recent trends and illustrate how various merchants react to some of the biggest trends.
As we discussed previously, the rise of active/athleisure wear has become a significant force in the apparel industry. Looking at several large retailers makes it apparent how and when merchants adapt to this phenomenon. One noteworthy observation is the early adoption of the trend by large department stores, including Macy’s, Nordstrom, Kohl’s, and Target, while fast fashion retailers such as Forever 21 and Revolve Clothing arrive relatively later to the game.
Looking at the individual linear trendlines for each merchant, athleisure is generally on the rise within the apparel industry (with the notable exception of Target’s steep climb and drop in spring of 2015).
To delve deeper, we can compare these findings against the prices extracted for these products when they were introduced by the merchants. There is generally a slight upward trend over time for athleisure wear pricing.
From necklaces to dresses and sweaters, choker-styled accessories and tops have made a statement in the fashion industry. The chart below lists the retailers with the highest number of chokers or choker-related apparel. While it appears that large department stores such as Nordstrom and Macy’s were early participants, they’d only really begun to invest in the trend in late 2016/early 2017 when it became more pronounced.
Beginning last fall, velvet’s luxurious texture conquered runways and the apparel industry during that season. Extracting product counts for velvet-related apparel items shows the material’s seasonal rise and decline among its biggest carriers. As expected, inventory for velvet-related apparel experienced growth during cooler months and dipped during warmer months.
We can also spot when merchants increased or decreased the original price point of newly released products under this trend, which appears to be high during the spring season and lower during fall, when velvet is at its peak popularity and inventory is high.
Alternatively, bomber jackets have presented themselves as a versatile trend, with styles designed for fall through summer. As seen in the graph below, bomber jackets have displayed an overall steady incline in terms of quantity among major retailers.
One interesting detail is the slight decline during this season. While other retailers feature shallow dips, there is an especially sharp decrease among fast fashion retailers such as Forever 21, as well as eCommerce brands like Shopbop that can tailor their inventory more quickly to fashion trends and demand. This may be a seasonal reaction or retailers’ interpretation that the trend is losing popularity. However, as this occurs within a brief timespan of a few months, we note this cautiously.
Rompers have been a spring and summer staple in closets for several years now, and the extracted data for several large retailers depicts their popularity within these seasons. With its resurgence through the introduction of rompers designed for men, this is a notable trend to watch in the coming seasons.
After observing the most recent pricing data for products when they are removed, sold out, or last extracted, there is a noticeable tendency for prices to rise and fall with seasonal demand, as seen with velvet. Merchants tended to set a higher final price for rompers during colder months, while reducing prices during warmer months when demand is higher
From this analysis, we can draw several conclusions. Fast fashion retailers tended to hold higher inventories for less time, keeping with trends for shorter periods of time compared to large department stores. Retailers also sold certain items in high volume with lower price points when seasonal demand was high, and they accordingly lowered inventory and increased prices when demand was lower.
This indicates two distinct strategies within the apparel industry: speed versus volume. Fast fashion retailers build their consumer base by producing the latest and most popular trends at high frequency, while large department stores sell trends for longer periods of time at higher volume.
Because most of these trends are quite new, it would be best to observe how they continue to develop in the future and how merchants choose to respond. Acquiring this information gives brands and retailers the advantage of understanding how the industry and those setting the trends behave, allowing themselves to better strategize and achieve higher performance.