All retailers are looking for the balance in stock which ensures goods to never be out of stock before it’s the end of the season. Nobody wants to sell ‘no’ because of an out of stock situation. For seasonal products, this is inevitable, though, especially because all aim to keep stock levels as low as possible. Never out of stock (NOOS) products, however, are special for fashion retailers. Most of them sell goods marked as NOOS, next to the seasonal collections, continuously. The NOOS season is extraordinary and NOOS items have their own challenges and advantages but are very important for all. They often drive a large portion of the total revenue.
What is the difference between NOOS and seasonal items?
Everyone plans and analyzes their NOOS separate from the seasonal collection, even though these goods are part of the realization of the overall merchandise plan. They always need to be kept on hand and are therefore sourced over and over again, whereas seasonal items usually have one purchase and production period only. This means the inventory and OTB need to be monitored all year long and the goods need to be available in an isolated query for the buyers.
Because the items remain the same, raw materials and maybe production capacity can be purchased more economically. Costing considerations are different, and the calculation can be based on a different logic than the seasonal items. NOOS have a lower investment anyway because they have a very long product life cycle. After the first launch, you can skip the design and sampling phases, which are still very expensive for seasonal items despite some very good digital initiatives of some brand owners.
The exception to the rule in the business of fashion
NOOS items are the exception to the rule that fashion is mostly impossible to forecast. You take less of a gamble when cutting to inventory based on historical sales. Sales are realized across seasons, but therefore also during the same period as the new seasonal items. This can be a challenge. Sales figures for NOOS need to be monitored separately and finance also needs this in their analysis.
Because Never Out Of Stock items are less trendy and can be sold over multiple seasons, and attract a different customer next to the customer who is focused on the seasonal products. In this way, they help to differentiate the appeal to customers. In this era in which customers have a short time span of interest and low brand loyalty, it is important to relate to as many customer groups as possible.
A consistent value proposition for customers
NOOS products also have a higher percentage of returning customers than the seasonal items, because of the appeal of the consistency. Even though the modern customer is easily distracted, we have seen sufficient proof that consistent quality and excellent value proposition is a very strong factor to attract new customers and maintain their loyalty.
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Resource Credit | K3 Business Technologies