How Apparel Brands Use Wholesale Analytics to Spot Underperforming Markets Early

An underperforming market with reduced consumer demand is a huge red flag in wholesale, leading to declining sales and a loss of revenue if fashion brands act too late.

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Due to the complex nature of the channel making changes to try and protect revenue are not always easy as there are multiple factors at play, including SKUs, pricing strategies, buyer relationships, however analytics can provide an early detection system to stop your fashion business from suffering unnecessary losses. 

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What is Wholesale Analytics in Fashion? 

Wholesale analytics refers to the process of using market data to improve performance in the channel. 

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For apparel brands interested in learning about where they may be going wrong in an underperforming market,  they can examine analytics related to sales performance statistics, demand data, and insights into buyer behavior. 

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This gives them a better understanding of regional demand and the overall fashion landscape of the market they are trying to target. Looking at the data makes it easy to spot what is working and what isn’t. 

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What Defines an Underperforming Market in Wholesale?

An underperforming wholesale market is a region where business is slower, and sales and demand are consistently below expectations. 

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Key indicators that a market is underperforming include:

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• Declining sales: Buyers are buying less or spending less on product

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• Low sell-through rate: There is a lack of customer demand for product

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• ‍High inventory levels: Usually due to slow-moving stock or poor demand forecasting

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• Reduced reorder frequency: No repeat orders could indicate the product did not sell well to end customers
  
  

How Apparel Brands Use Wholesale Analytics to Identify Weak Markets

Wholesale analytics can assist apparel brands in identifying weak markets early, enabling corrective actions to avoid further revenue loss and potentially save business in the region.

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Track Regional Sales Performance

Brands compare sales data across regions to ensure performance is aligned across markets. Regions with declining or stagnant performance need to be monitored, and action may be required.

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Analyze Product Level Performance 

Insights into how styles are performing will give brands an indication of regional bestsellers as well as slow-moving product. It may be that a specific style is not resonating with a certain region. 

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Monitor Inventory Imbalance 

Brands can track stockouts by location and examine inventory levels to determine if over-stocking is occurring. If one region has more inventory imbalance than the rest, this indicates an underperforming market. 

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Use Predictive Analytics for Early Warning

Brands can use forecasting demand tools that combine historical data with trend analysis and predictive analytics to potentially identify underperformance before it happens. 

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Segment Retailers by Performance 

Looking at average order value data, reorder frequency allows brands to group high-performing retailers and low-performing retailers separately. Brands can then focus their sales efforts and inventory more effectively. 

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Common Causes of Underperforming Markets

Underperforming markets are often driven by practical or operational issues. These can include: 

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• Poor assortment fit: Sometimes, a buyer may build an assortment that does not meet the needs or expectations of their target consumer. This could occur due to extreme weather changes or placing a big order for a trending product that quickly loses appeal or becomes oversaturated in the market.

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• Wrong pricing strategy: Brands that set their prices too high may experience a lack of sales as they price themselves out of the wholesale market. Brands can also come into issues if prices are too low, as retailers may consider this an indicator of low quality and be hesitant to place an order.

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• Weak retail partnerships: If fashion brands do not put enough effort into nurturing their new and existing retail connections, buyers may lose trust and take their business elsewhere.

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• Missed trends: If a brand misses out on a trend and has no relevant product available for buyers, this will lead to a loss of sales.

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• Supply chain delays: Brands that cannot meet buyer demands and deliver stock in time are much more likely to experience poor performance. It is impossible to maximize revenue potential if operational issues lead to inventory not being available when it is needed. 

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How to Fix Underperforming Markets Using Data 

Underperforming markets can be revitalized using data insights. Apparel brands can use wholesale analytics software to uncover the actions needed to drive growth.   

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• Adjust product mix by region: brands can use regional data to align with local demand and bring buyers the type of product that their customers want. This will improve sales performance.
  
  

• Reallocate inventory: brands that have segmented their clients can move stock from low-performing markets to high-demand ones. This reduces over-stocking in slow markets and prevents stockouts in popular ones.
  
  
• Focus on top-performing styles (80/20 rule): once bestsellers have been identified, brands can then prioritize selling these styles. This improves efficiency and will help to boost sell-through rates.
  
  

• Optimize pricing strategy: brands can adjust prices based on regional performance data to try to increase conversions. If wider data for the market is available, brands can compare their pricing against competitors and weak prices to try to improve their margins.
  
  

• Strengthen retailer partnerships: after identifying a weak market using data, brands can then make an effort to invest their time in improving relationships with retailers in the region. This can help to drive growth and promote sales. 

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Best Practices for Using Wholesale Analytics Effectively

Using wholesale analytics effectively requires consistency and cross-team alliance to ensure real changes can be made.

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There are many easy mistakes apparel brands often make when using data to improve their wholesale growth. To avoid these pitfalls, try to:

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• Monitor data regularly: checking data every season is not enough, especially in a fast-paced industry like fashion. Trends and sales cycles are rapid, so constant monitoring of data is required to ensure underperformance can be spotted early.
  
  

• Combine multiple data sources: for a total overview of a fashion brand’s wholesale business, it is essential that multiple sources of data are considered. This prevents siloed systems from giving inaccurate insights.
  
  

• Act early, not reactively: if signs of underperformance are spotted within data, it is crucial that a fashion brand acts immediately to reduce potential revenue loss. Waiting until the insights show a proven and sustained drop in sales, for example, can lead to catastrophic consequences for a business.
  
  

• Align teams: data should act as a single source of truth that all departments of a fashion brand can learn from. For example, if the sales department has access to data but the marketing team does not, this can lead to fragmented systems within the business and conflicting goals. 

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FAQs  

What is wholesale analytics in fashion?

Wholesale fashion analytics refers to data captured from brands and buyers that can inform business decisions in the channel. 

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How do brands identify underperforming markets? 

Apparel brands can spot underperforming markets by looking for clues within their wholesale analytics. Tracking sales performance, analyzing product performance, and monitoring inventory levels are all common ways of identifying a weak market. 

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Why do some wholesale markets underperform?  

There are a wide variety of reasons that a wholesale market may underperform, these include, but are not limited to: poor assortments, incorrect pricing strategies, weak retail partnerships, and supply chain issues. 

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How can brands improve underperforming regions? 

Apparel brands can try to improve their success in underperforming markets by building stronger retail partnerships, focusing on top-selling styles, and optimizing their pricing so that it appeals more to buyers. 

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‍What tools can help with wholesale analytics? 

JOOR’s reporting suite offers apparel brands access to wholesale analytics and real-time sales insights. This makes it easier to monitor retailer engagement and track top-performing styles. Brands can build custom reports with easy-to-read graphs and geography filters to help them spot underperforming markets early. 

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