The global apparel retail sector is certainly one of the most impacted by COVID-19. After weeks of lockdown and customers not able to shop as they used to do, retailers have been facing a “demand problem”, which in turn has become a mounting “inventory problem”.
Now that stores have gradually re-opened, brands have been facing the situation where they have lots of excess inventory. Among the options they have considered, one is obviously to clear the inventory with heavy discounts to recover cash. However, this can mean retailers might have tiny or negative margins, and there is no guarantee you can clear it all given the unknown duration of the virus. At the same time, massive and long-term discounts could negatively affect branding.
A second possibility they have explored is to pack up some inventory and hold it until next year. While this approach is not optimal for many reasons, it does allow retailers to make room for inventory that has a better chance to sell. Historically the holding costs of packing up inventory have been too high to consider this “pack and hold” approach, but as with all things impacted by the pandemic, the current inventory situation is unprecedented and calls for drastic measures.
In any case, whatever strategy retailers have decided to adopt, this is not a “set it and forget it” situation. Retailers have very little data on how consumers will shop over the post-lockdown period. In some cases, we have seen glimmers of a spending spree, such as revenge shopping.
As such, retailers need to monitor store and sales performance closely, and have the confidence to react rapidly to what the data tells them.
In a market in which customer demand and behaviors are in continuous evolution, Aptos positions itself with a tailored approach to engaging customers. Aptos, merchandising, commerce, customer and order management solutions are designed to enable retailers to be fully omni-channel and highly responsive to new market dynamics.
In these times of uncertainty, in which the retail industry has been highly impacted, Retail in Asia had the pleasure to interview Zaki Hassan, Regional VP Asia Pacific at Aptos to understand his views on these new challenges and share with us some of the solutions. Zaki thrives on the challenges associated with expanding Aptos’ footprint in the APAC region, always employing alternative strategies and out-of-the-box thinking to gain new customers.
RiA: In this particular situation, how are you working with your clients and any tips for retailers in general?
Zaki: We are currently working side by side with global retailers to understand and execute the best strategy based on the stage of the recovery journey for the market, their type of business, the assortment specificities and the channels they operate in.
Depending on the segment, we might for example, suggest a combination of actions,
where retailers start with a markdown on selective products and they “hold” those items that are “suitable” to trade later than planned.
In these unprecedented times it is harder than ever to predict when the customer will be in a mood to buy strappy tops from Spring or denim from Autumn. There is a need to make better and later decisions and to run multiple scenarios to model the implications using the planning tools.
With Aptos, assortments can be planned at store level. Accurate planning, done at store level, helps retailers in the post-pandemic phase to examine what is going on, store by store, as they decide to open new shops, increase their opening hours or they see fluctuations in demand. The product mix and inventory levels can be tuned in concert with daily and weekly goals, as the situation evolves.
Generally, whether selling inventory now or waiting to next season, the key is to also look at the balance of the collection that is coming in, to make sure that the overall range makes sense. It doesn’t help with the customer experience if they see a mismatched collection in the same season.
Aptos merchandise solutions can help retailers fully balance their next collections: take a global view of the next assortment including carryovers, identify gaps, make sure their attributes complement and fully match with new designs to obtain consistent/balanced collections and ultimately, a positive customer experience.
RiA: Aptos supports retailers in optimizing their performances. Based on your experience, what are the main challenges your clients face in normal times instead?
Zaki: The leit-motif in our conversations with clients is the customer’s retail journey.
Whether you’re shopping for cosmetics in a store or for shirts online, part of you anticipates having to work—and sometimes fight—just to get what you want.
But every once in a while you’re pleasantly surprised. You’re served by a person (or a digital commerce solution) who delivers exactly what you want—and more—at a much higher standard than you had come to expect. A person who sees every part of the interaction from your point of view and who directs it around your interests, not theirs.
In essence, you’re engaged differently. And in the process, you’re made to feel differently—and infinitely better—about your entire shopping experience. You remember it. You savor it. And it becomes the benchmark you want every other retailer to hit.
Retailers now more than ever need to offer a pleasant – no – delightful shopping experience to their customers no matter which channel. This experience, coupled with the products available at the price the customer finds attractive are the key to any retailer’s success.
RiA: How does Aptos help retailers deliver experiences that meet customers’ high expectations and offer delight?
Zaki: We help retailers develop dynamic and responsive assortments, streamline operations and deliver integrated, seamless experiences…wherever shoppers choose to engage.
RiA What is the story of expansion of Aptos globally and specifically to APAC?
Zaki: The company has existed in various shapes and forms for over 30 years, growing organically and through acquisitions. The Aptos brand launched in 2015, as a spin-off from Epicor Software, with a primary focus on providing solutions for retailers worldwide. Starting from North America, Aptos solutions are now live in 65 countries, with nearly half of our colleagues residing outside of North America.
SEE ALSO : EXCLUSIVE INTERVIEW with Luxasia
Aptos landed in Asia over the past decade, with most growth happening in the past 5 years covering 8 countries across the region. With Aptos leadership and new owners Goldman Sachs, we have laid out an ambitious plan to further expand our presence in the region. Over the years, Aptos has fostered long-term relationships built on tangible value and trust with over 1000 retailers worldwide and Asia is now a primary focus.