“They’re looking to create variety and freshness in consumers’ eyes,” said Kathryn Cullen, principal with Kurt Salmon Associates, a retail and apparel technology consulting firm based in New York. Younger consumers expect it, she said.
Besides giving consumers a reason to shop more often, leaner inventories and faster turns can improve margins by encouraging shoppers to buy more often at full price, she said. If would-be customers hesitate, they know a desired item may be gone the next time they visit, either because of heavy demand (and no replenishment) or a conscious store policy of automatically marking down and blowing out merchandise every six weeks.
Not surprisingly, the trend has necessitated significant changes in business processes, technology and logistics — both for retailers and the manufacturers and brands that supply them.
In the past two years, many specialty retailers have cut the time goods hang in the store from the traditional three months — with four turns a year — to as little as six weeks, with as many as 12 turns a year. Some companies, like H&M, put new clothes on the sales floor every day.
“The trick is providing the right degree of the right product at the right time in the right place — and to do that plus turn fast, that’s hard,” said Marshall Fisher, professor at the Wharton School of Business. The stores he’s seen succeed at it have three things going for them:
- Accurate forecasts.
- Optimized inventory levels.
- Supply chain speed or flexibility.