Investors might “sell in May and go away,” as the Wall Street saying goes, but the fashion business pushes on through the dog days of summer.
Christmas and back-to-school are the sales stars of the year, but they are still just a part of the picture, which also relies heavily on barely-there bikinis, short shorts, tank tops and lots of linen.
And there is online evidence that the warmer months are heating up more.
Katie Smith, retail analysis and insights director at big data fashion firm Edited, looked into how much online love summer looks got in the warmer months compared with cold-weather styles in winter.
The verdict? Summer is winning, with merchants increasing the number of warm-weather styles offered online year over year. Consumers are responding, too, leading to increased sellouts of goods.
According to Edited’s data, U.S. e-commerce merchants stocked 13 percent more linen looks during the April, May and June quarter than a year earlier, with a 22 percent increase in sellouts. That shows increases in both supply and demand.
In the cooler days of the fourth quarter — October, November and December — merchants pushed more sweaters online, with a 13.9 percent increase in styles offered, but they didn’t connect as well and sellouts fell 5.5 percent from a year earlier.
That trend is being seen across the marketplace: Sellouts of espadrilles rose 26 percent in the second quarter while sellouts of boots gained just 3 percent in the fourth quarter.
“Consistently, growth and sell-through on the summer products outstrips the gains in cold-weather apparel,” Smith said.
Online sellers are also talking about summer more.
“In the last three months, retailers in the U.S. have used the word ‘heat wave’ on web sites and in newsletters 303 percent more and the term ‘hot sun’ had a 167 percent increase, than the same period in 2017,” Smith said.
There are good reasons for that on the weather radar.
Evan Gold, executive vice president of global partnerships and alliances at weather intelligence firm Planalytics, said the last few spring selling seasons have been “very warm,” while weather-driven demand for cold-weather looks has been below normal.
The mind jumps to global warming, but it’s not a simple connection.
“Global warming/climate change is really a long-term thing and, while the planet is ‘warming,’ it really translates more to increased volatility in weather — think more ‘extremes’ and ‘events,’” Gold said. “The extremes ultimately lead to more weather-driven purchasing, which can be both warm-weather categories like cutoffs and bikinis, but also need-based products like boots, gloves, A/Cs, bottled water, shorts and Ts.”
Gold said weather volatility in general is pushing customers to buy closer to need even as many stores continue to move warm-weather gear onto the sales floor in February.
While that practice has long been criticized, stores have plenty of incentive to be ready when the weather breaks.
“Weather sensitivity is typically higher earlier in the season (March/April for spring and September/October for fall),” Gold said. “This means that a warm March and April will drive more sales — and typically more full price/higher margin sales.”
And companies have to keep the lights on and supply chain humming even as shoppers trade the boutique for the beach.
“It’s important as a business to figure out ways to be meaningful year-round because your expenses typically aren’t variable,” said Matt Kaden, managing director at MMG Advisors Inc. “You have a line of fixed expenses, often the largest ones, that are constant throughout the year,” Kaden said. “You want to try to create consistency of cash flow because you don’t want to have periods of burn.”
But even more summer sales, and at full price, can still mean less for the retailers’ top and bottom lines compared with winter duds.
“The dollar value for summer products tends to be much lower,” said Bryan Eshelman, a managing director in AlixPartners’ retail practice and formerly chief operating officer of Aldo. “If you think of flat sandals versus high-cut boots, even if they have the same margin rate, the price-point differentiation could be two, three, four times depending what end of the spectrum you are on. So the dollar contribution to profit in the summer tends to be much lower.”
Even so, the warm months are a time to prepare for the future.
“Retailers look at that period of time as hopefully building a buffer for the volatility that’s to come for the fall season and the holiday season,” Eshelman said. “Retailers think about trying to put money in the bank to hedge against what they may or may not achieve through holiday.”
As people buy more according to their immediate needs, Eshelman said retailers in September and even October in some parts of the country see plenty of opportunity to sell warm-weather styles.
And that trend seems to hold beyond the West and Southeast. Summer’s not only heating up, it’s lasting longer than ever.
Warming Up and Cooling Down
Edited ran a spot check of in-stock and sellout rates for a variety of seasonal goods at U.S. online merchants and found interest in summer goods is on the rise. The analysis looks at online activity for warm-weather gear in April, May and June, compared with a year earlier, and activity for cold-weather looks in October, November and December.
|In stock: Up 44%|
|Sellouts: Up 46%.|
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|Sellouts: Up 28.6%|
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|Sellouts: Up 22%.|
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|Sellouts: Up 26%.|
|In stock: Up 19.4%|
|Sellouts: Down 1.1%.|
|In stock: Up 13.9%|
|Sellouts: Down 5.5%|
|In stock: Up 9.5%|
|Sellouts: Up 19%|
|In stock: Up 4.6%|
|Sellouts: Up 3%|