February Round Up: How sell outs are the ultimate sales driver & why the NikeSKIMS announcement has got everyone talking, plus the best of retail in February.
#64: This is In The Loop’s February round-up where you’ll find retail, fashion & beauty news and trends, through the lens of a retail strategist who loves to shop, share & dive in to all the latest.
My In The Loop round up has gone monthly; here’s what you can expect, and why.
Every month I’ll give you my reflections on an element of retail strategy, how it’s being used and how it drives sales. You’ll also get a deep-dive in to a key story of the month that I think has the power to revolutionise the retail landscape, and a retail and shopping round up of what I’ve loved that month, plus the key articles I think you should read. For those of you who are looking for more tailored support, I’ll include updates on my strategy consulting business Retail Collaborative, including details of how you can work with me.
So, why the change? Let’s be honest, we all have a lot to read, and how much can we actually read and digest? It makes sense for these round ups to be monthly, but you’ll still receive a weekly email from me in the form of my Retail Lab breakdowns, complete with strategy tips and observations focused on a retailer or a trend.
Oh, and make sure you subscribe to my Linkedin and Instagram where I’ll share daily retail news and my reflections on all the latest in real time; retail moves fast so follow along to stay In the Loop.
Now, let’s dive in to this month’s round up where you’ll find:
Reflections of a Retail Strategist on why selling out is the ultimate sales driver
So Many Thoughts on the Nike x SKIMS tie up
The retail and shopping round up of what I loved in February
Bookmarked - February’s need-to-know news
💫 Reflections of a Retail Strategist
On why selling out is the ultimate sales driver
Selling out used to mean inventory planning failure. Old-style WSSIs would forecast supply and manage demand until the end of a pre-planned selling period, but retail has evolved. Now it’s all about creating products that create a moment, and timing them to be in stock at the perfect moment. Then it’s about using that sell-out to create further demand via social media and waitlists.
Let’s start with the advantages.
In a world where sharing that you bought something everyone else wants is a status symbol, the clearest way to show demand for products is to prove you sold out, quick. The subtext is that the product is so good that a retailer can’t make it fast enough.
This leads to quicker stock turn and less storage costs, fewer markdowns, and a lower terminal stock risk.
It also means the retailer can keep up with market trends and always have the budget to introduce freshness, all while knowing they can sell it because the sell-outs create buyer urgency.
In short, it’s a smart move.
But there are risks.
Retailers could end up with low inventory levels that affect the bottom line, with fear of missed sales driving increased (and expensive) air freight shipments to fulfil demand.
Running out of bestsellers could easily tip the balance from buyer anticipation of restocks to frustration that they can’t get what they want, leading to lost sales and worse, lost customers.
It’s a delicate balancing act between managing potential losses and creating future opportunities.
So what are the opportunities, and do they outweigh the risks?
Intentionally creating demand is smart retail strategy- and it works.
Creating a waitlist means retailers already have a list of buyers ready before investing in products, decreasing production risks.
Retailers know what they can sell, and can use this data to inform future launches. From a sustainability standpoint, this is a welcome approach after decades of overproduction and waste.
And the biggest opportunity? Engineering buyer’s remorse; scarcity sells, and here are some examples.
Hermès is the first example to spring to mind. Intentionally engineered to be out-of-reach for almost everyone, the Birkin has become increasingly desirable precisely because you can’t just go and buy it because you can afford it.
Recent rumours that the Margaux bag from The Row might be going out of production sparked a frenzy, but according to insiders it now looks like the brand might be managing supply of this iconic bag from within by only allowing purchases in their own boutiques for customers with prior purchase history or a relationship with a sales assistant.
H&M pioneered scarcity in the fast fashion space when they launched their designer collaborations in the early 2000s. I remember the queues for the Karl Lagerfeld collection, and while times have changed, the strategy hasn't. Almost as soon as the email for the recent White Lotus capsule landed, customers were met with sell-out messages.
If you’re a shopper, I’d love to know how you feel about the scarcity tactics used by brands and retailers. Do you do whatever it takes to get your hands on the latest “it” product, or would you rather give them a miss? Let me know.
If you found this analysis helpful from a business POV, did you know that I offer services to help retailers with their strategy? I’d love to help you, so click here to find out more about the packages I offer.
💡 So Many Thoughts
On the Nike x SKIMS tie up
There was an audible gasp in retail circles when Nike and SKIMS announced that they are creating a new brand, NikeSKIMS, due to launch this spring. Although it has partnered with various athletes and brands over the years for collections, this new athleisure brand is the first time Nike has launched a new brand with an outside company.
In short, it’s a big deal. Why? Because female athleisure is huge business. With customers looking for comfortable and versatile, yet stylish clothing that works for their lifestyle, brands are searching for ways to give customers what they need.
Women want to feel good and look good in workout wear because they are exercising when and how it suits them. Think a barre class followed by a coconut milk matcha- the clothes they wear need to work for everything from errands to pilates to coffee dates.
Nike has been struggling to reach its female base, so what better way to grab their attention than by teaming up with a brand like SKIMS that has a fantastic rapport with their target audience?
Here’s why I think this tie up makes sense:
“NikeSKIMS product is designed to sculpt and engineered to perform” and that’s the crossover both Nike and SKIMS need to compete with the likes of Lululemon, Adanola, Vuori, and Varley.
It’s the perfect blend of Nike’s product performance and the popular SKIMS aesthetic which will allow Nike to capture a larger share of the women’s market.
It’s a big move for SKIMS and allows Kim Kardashian to make further inroads in to the sporting sphere (SKIMS is already the official underwear partner for the NBA and it recently collaborated with The North Face to create a skiwear range.)
Nike is betting big that Kim could be their next Michael Jordan; make no mistake, co-launching a brand vs creating a collection proves that this venture is about longevity.
Did you enjoy this deep-dive? Do you want a deep dive on a specific story? Let me know!
🛍️ Retail and Shopping Round Up
Of what I loved in February
Lululemon has enlisted Lewis Hamilton as its latest ambassador with a slick campaign that’s already got people talking.
True luxury is about craftsmanship and what better way to showcase that artistry than this video from Dior that shows us how they make a watch? It’s beautifully shot and reminds us all that there’s beauty in slowing down.
Discovery sets continue to dominate, and I love it. Investing in self-care and beauty requires patience and trial and error, so sets like these from Neom, Victoria Beckham, Floral Street, and Jo Malone are perfect for testing before buying the full-size. They're also ideal for travel.
Last night I joined the Rituals livestream as they launched their latest collection. It was fun, interactive and a great way to involve the Rituals community.
Stackers makes small but mighty products and their Instagram broadcast channel is just quietly telling us all what they’re about in a fun and engaging way.
Lindt is opening up a flagship store on London’s Regent street in March and I will be paying a visit to see fresh chocolate making in action and snapping up my favourite truffles from their largest pick and mix selection in the UK.
Space NK is opening up three new stores, including one in Leicester’s High Cross shopping centre.
🔖 Bookmarked
February’s need-to-know news
As it continues to diversify, Mango is opening its first home store in Barcelona in April. The retailer is focused on creating design-led products across its portfolio and I can’t wait to see them offering more non-fashion items because there’s definitely a gap for stylish, affordable home goods.
Celebrity endorsements and big designer collaborations used to be the preserve of luxury retail, but times are changing and we’re seeing the power of high street retailers to pull in the big names in fashion and culture. I already mentioned Lewis Hamilton and Lululemon but it was telling that the back up dancers during the Super Bowl Half Time Show wore Uniqlo. It made Uniqlo’s fashion ambitions clear and also showed that unique moments don’t always have to feature high-end brands because luxury can work at an affordable price point. This is partly why Pandora is thriving. In fact, next week’s Retail Lab is all about Pandora’s magic formula so make sure to sign up so you don’t miss this strategy breakdown.
Unilever’s acquisition of Wild shows that refillables are more than just a trend; they’re an investment opportunity, and an area of retail that’s ripe for innovation. I’m excited to see what comes next in this space.
I’d love to hear what you think of this week’s edition, or about any suggestions you have for future topics I should cover, so get in touch!
Until next week,
Hina