Never out of stock: How are fashion brands and retailers using it during the pandemic?
Since the beginning of the pandemic, the fashion industry has been struggling with vast amounts of unsold merchandise from past seasons due to store closures. Timeless never-out-of-stock collections could be a solution. For a long time, it was considered a reliable concept for the textile industry. However, even these sought after pieces are still filling the warehouse along with the other unsold collections.. What exactly is NOOS and how is the fashion industry handling it in the current situation?
NOOS is the abbreviation for “never out of stock”. The term from merchandise planning refers to products that can be ordered from the brand at any time and are then delivered immediately - in other words, that they are permanently in stock. Retailers therefore have less, if any at all, pre-orders for NOOS collections. As a result, the product risk lies exclusively with the manufacturer. In reality, each fashion brand often defines the quantities and order periods of its NOOS articles differently and decides individually how long the goods actually remain in the assortment
NOOS items are mostly timeless classics, such as a white shirt or jeans, which feature a comparatively low degree of innovation and are always in demand. The difference compared to seasonal items is the longer sales period: NOOS collections are a permanent part of the product range for a longer period of time. Especially denim suppliers like Mud Jeans or textile discounters like Kik have a wide-ranging NOOS programme.
Normally a safe bet for the fashion industry, but due to the Covid-19 pandemic, demand has dropped significantly in this category as well. Products that haven’t sold in the store do not get reordered from the manufacturer. Accordingly, the warehouses of brands with a high amount of NOOS, such as Bugatti, Cecil and Street One, remain packed. “Yes, we have high stocks of NOOS, that is our risk. We have visibly more merchandise than usual and will sell through our own outlets,” said Jim Nowak, CEO of CBR Fashion Group in an interview with the German magazine Textilwirtschaft in March.
NOOS items can be sold regardless of the season
Nevertheless, timeless collections offer advantages over trend-oriented seasonal items which quickly get out of style. NOOS’ products can theoretically still be sold in upcoming seasons. Restructuring expert Sebastian Wilde therefore advises retailers to adapt and realign their assortment policy: “Retailers should try to increase the share of NOOS - never out of stock - that is products that are on sale all year round, in order to reduce dependence on individual collections”, the partner of the consultancy Falkensteg told the German business journal Wirtschaftswoche in January.
Most buyers are taking a more careful approach since the outbreak of the pandemic, focusing on durability rather than short-lived trends. “Trendy, focused on one season and then gone, we won’t be doing that anymore”, André Myburgh, head fashion buyer at the Zurich-based department store Jelmoli, said in June. In the future, he intends to focus more on value and never-out-of-stock. Peek & Cloppenburg is pursuing a similar approach: “The never-out-of-stock items and basics could be increased – in the end, it also depends on what the suppliers offer”, said Miriam Anlauf, Buying Director at the Düsseldorf fashion retailer Peek & Cloppenburg, in an interview last July.
Even though manufacturers have experienced the downside of never-out-of-stock programmes in the past year, shoe manufacturer Lloyd wants to continue to rely on the NOOS concept. “Even though NOOS hit us hard during the crisis and still does economically, we are sure that this category will become an advantage for us in the future,” said Lloyd CEO Andreas Schaller in an interview with Textilwirtschaft in June last year.
Less changes from season to season
Another way to deal with the issue of leftover seasonal merchandise is to change less within the collections: less innovation and more consistency. This concept has already been successfully applied to sportswear. The Italian Oberalp Group, for example, has taken the pandemic as an opportunity to adapt its collection to the new overstock situation. At Salewa, one of the group’s brands, the percentage of the collection that will remain the same has reached 75 percent. The target is 80 percent, only 20 percent of the collection would change from season to season. “Our customers don’t want a completely new product every year, and above all they don’t want to have the feeling that their product is only worth half the price at the end of December. Our retail partners have clearly indicated that this strategy has a positive effect on value preservation, and that our brands have been able to achieve a higher gross profit on average as a result”, explains Stefan Rainer, Chief Sales Officer of the Oberalp Group in the interview.
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