Widespread discounting on autumn stock before the summer has even come to an end has, worryingly, become common practice for many UK fashion retailers – and has potentially damaging implications.
As we report, some retailers were offering up to 40% off new-season collections last week. Observers put this down to Brexit uncertainty, combined with an over-buy of stock.
In today’s tough climate, the temptation to discount early is understandable. Retailers’ margins are under mounting pressure, and stores are closing at a rate of knots, leading to a raft of job losses.
Senior leadership teams are desperately trying to improve the design, buying and merchandising of product, and expand in the UK – and possibly internationally – across different sales channels, while keeping enough cash flowing to pay their bills.
Planned end-of-season and mid-season Sales have their place, of course – nobody has worked out a way to predict with 100% accuracy what will sell, and what won’t. But driving people to buy new collections by offering a discount teaches consumers that the product is worth less than it is. Why would they later buy it at full price?
It also perpetuates the culture of throwaway fashion. The constant onslaught of targeted Sales and discounts make it hard to resist buying something new, which may only be worn once, if at all.
The Fashion Pact presented at the G7 summit in Biarritz over the August bank holiday weekend was a watershed moment in the global effort to make this industry more sustainable. Some of the world’s largest luxury and high street brands, including Inditex, H&M, Adidas, Nike and Bestseller, have signed the voluntary commitment to reduce their environmental impact (read our analysis, here).
But this commitment is at odds with the panic discounting behaviour we’re witnessing from high street retailers in the UK.
Rather than thinking about how to drive footfall in the short term, retailers must increase their efforts to improve forecasting and bring down lead times, so they can reduce stock overhang and resist the temptation to start the new season with 40% off.
It is better for business – and the environment – to encourage people to buy fashion they actually want, at the price it deserves.