It wasn’t that long ago that we were talking about post-holiday returns and what apparel retailers could do to tackle them. Holiday returns seem like small potatoes compared to the impact of COVID-19: today, apparel retailers are facing a mounting pile of overstock, unlike anything they’ve seen before. Apparel has been disproportionately affected during the pandemic in which consumers—with limited funds—are focusing on purchasing items that are essential. What’s more, in the wake of quarantine orders, millions of people are working from home with no need or regard for clothing or accessories.
In the month of March, U.S. apparel sales dropped by more than half—and that month was not entirely closed. Discounts on apparel have increased 18% in the U.S., driven by retailers’ attempts to entice consumers to purchase items online. What’s more, April 25 figures showed new styles entering the market decreased a whopping 77% YoY. And time does not forgive in the fashion world. Apparel that doesn’t sell can become obsolete very quickly as trends shift (especially in the case of fast fashion). As time progresses, retailers will need more solutions than deep discounts, traditional clearance channels, and liquidators.
One of these solutions should be a B2B marketplace for excess merchandise. When done right, a B2B marketplace allows for higher pricing and a faster sales cycle than traditional methods (as well as brand control).
Many retailers are working with B-Stock to build their own B2B marketplaces in order to auction bulk quantities of returned and excess apparel to business buyers around the country. From resale shop owners, online sellers, and exporters, a robust buyer base exists for apparel. What’s nice about an online auction channel is that it makes it just as easy to sell to a thousand business buyers as it does to five liquidators. More buyers generate more demand: this pushes prices up and allows for a faster sales cycle.
A marketplace also enables a consistent auction cadence: you can list every week (versus letting inventory pile up in your warehouse until the end of the season). Retailers and brand owners including Macy’s, QVC, Zulily, and Wolverine Worldwide are currently using their own private auction sites to sell excess merchandise directly to their own specific and approved buyer base. When it comes to brand control, there are plenty of ways to avoid channel conflict if you choose to go the B2B marketplace route. For example, set specific restrictions on your buyers; this could include: mandating all items be delabled prior to resale, excluding resale on 3rd party sites, establishing geographical limitations, setting remarketing rules, and selling only to exporters.
For more information, we invite you to join us for our webinar: How an Online Marketplace Can Solve Your Post-COVID Excess Inventory Problem, scheduled for Thursday, May 21, 2020.
You can also schedule a demo today.
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