Reducing Overproduction in Fashion with Data-Driven Insights
The fine line between meeting demand and avoiding excess inventory can often make or break a fashion brand. Here's how data-driven insights can help fashion brands navigate it profitably.
Overproduction remains one of the fashion industry’s biggest problems, the fine line between meeting demand and avoiding excess inventory can often make or break a fashion brand, Overstocking and overproduction not only strain financial resources but also contribute to environmental concerns, making them pressing issues for the industry to address.
An estimated 150 billion garments are produced every single year, but between 15 and 45 billion of those do not get sold. In 2017, British luxury fashion brand Burberry destroyed unsold clothes, accessories and perfume worth £28.6million. Last year, The world’s largest luxury goods company, LVMH, wrote down $3.2 billion in stock it couldn’t sell. Kering, which owns Gucci, had $1.5 billion in excess inventory.
All these come at a huge cost to the environment, as the fashion industry is responsible for up to 10% of global greenhouse emissions.
Fashion brands have previously employed various strategies to mitigate the impacts of overproduction, with varying degrees of success. Brands try to diversify sales channels and resort to selling off excess products at a discount, While these measures have helped Reduce the effect of overproduction to some extent, they have often fallen short of dealing with the real cause.
However, Technology has now made it possible to analyse vast amount of data that provides accurate information about what customers are actually going to buy and this can be done using our woven insights solution.
How Woven Insights Prevents Overstocking ad Overproduction
Woven Insights gathers vast volumes of retail market data and consumer insights, and analyzes them with advanced Machine Learning and Natural Language Processing models.
This analysis help fashion businesses to identify common themes and insights valuable for enhancing design, procurement, production, merchandising and pricing strategies.
"How do these prevent overproduction and overstocking?", you might ask. Well, here's how...
1. Determining Product Performance with Replenishment Insights:
Woven Insights' Market Insights module helps brands and retailers to Identify product categories that are selling out quickly and being restocked. This indicates a high demand and helps to inform brands of the categories to have in higher quantities than others. They are also able to filter by specific brands, to study trends from their competitors and see how products from their competitors are performing in terms of how quickly they’ve had to be replenished.
This can help understand what Customers are really interested in. Understanding market dynamics and consumer preferences helps businesses avoid overstocking, reducing the need for clearance sales and preserving profit margins.
2. Identifying trending colours and attributes through Colour Insights and Assortment Analysis
Using the Assortment Analysis feature on Woven Inisghts, brands can identify which attributes resonate smost with their target customers. This approach allows brands to stock products and curate collections that not only reflect current trends but also align with their customer preferences.
The Colour Insights feature on woven insight provides data on how each retailer stocks the dominant colors in the market. This can be filtered for specific retailers, specific brands, specific product categories and specific product features.
This provides relevant information on the market trend for various colours and brands as well as retailers are able to make informed decisions on colours to produce or stock.
Understanding which colors and attributes are in demand allows brands to optimize their inventory management practices. By producing the right mix of products in the right colors, brands can minimize overstocking and markdowns, thereby improving profitability and sustainability.
Here's a demo video on how to determine the distribution of products in the fashion industry:
Conclusion
Woven Insights provides a valuable use case for fashion businesses that are looking to reduce waste, by helping them only design and produce clothes that are consumer-aligned and market-ready.
How To Signup For Woven Insights
- Go to woveninsights.ai
- Click on the "Book a Demo" button to schedule a discovery call with a member of our team.
- Follow the simple onboarding steps to set up your Woven Insights business account.