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Guide to Growth: How do you forecast stock buying?

How do you forecast stock buying? And how does this vary with the type of product – for instance, with an expensive, ethical inventory?

Drapers’ Guide to Growth programme is produced in partnership with Clipper 

Putting a strong and organised buying strategy in place is the foundation of any business, but successfully forecasting stock buying can be a complex mission.

Careful planning, a responsive approach and flexibility should all be embedded within your forecasting.

The best piece of advice I could give is to have a dynamic view of your stock level

Maria Malone, principal lecturer for fashion business at Manchester Metropolitan University’s Manchester Fashion Institute

“The best piece of advice I could give is to have a dynamic view of your stock levels,” says Maria Malone, principal lecturer for fashion business at Manchester Metropolitan University’s Manchester Fashion Institute. On a day-to-day level, she advocates storing the data in a WSSI – weekly sales, stock and intake – spreadsheet, which tracks in detail what has been sold and brought into the business in any given week.

“That WSSI is the most important document in the management, planning and control of any stock,” she says. “You can use it to see the growth or decline [in sales] in any given item. If a product category is on the decline, then you don’t necessarily put money into it.”

Cheryl Penman, co-founder and design director of accessories brand the Foundry, and former Arcadia Group and River Island buyer, explains that other factors come into play for young businesses: “Demand forecasting is difficult when you are a new business and you have no real historical data to work with. Therefore, it is important to analyse other tangible things, such as the profile of your target customer and key events they are likely to attend, the weather, [and] consumer or cultural trends to pinpoint key dates you require stock intake.

“Ensure you link stock-buying to accommodate any planned marketing you are doing – such as collaborations on social media – on your working calendar.”

The type of product impacts hugely on strategy – for example, core, basic products need a different approach to more expensive products or more experimental “fashion-led” items. Careful planning and detailed research can alleviate some difficulties.

Malone notes that in-store testing, direct conversations with customers and internet software and online tools – such as stock-analysis service Edited – can help inform strategy, and present a picture of what is selling well across the industry in general, which helps to indicate what is a “safer” investment.

Debbie Taylor, former Selfridges buyer, and buying and merchandising tutor at the Fashion Retail Academy, adds that building strong supplier relationships can be beneficial for young businesses working with more expensive, “risky” stock: “Develop a relationship with a supplier so that you can buy small quantities to trial but then repeat your order at short notice,” she says.

“Factories close to home are ideal to build a small business. They will be more expensive, but can save future markdowns. Wholesale or agents can also be a useful way to build your business without committing to huge quantities.”

Our new advice portal for retailers and brands, Guide to Growth, aims to solve the problems and challenges fashion businesses encounter as they grow. Email your questions to associate editor graeme.moran@emap.com and we will get them answered. 

Plus, read our Growth in a Changing Economy report here to learn how fast-growth brands and retailers are overcoming barriers to growth. 

In partnership with Clipper

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