Product category is the core of all fashion businesses. Retailers and brands who potentialise their own category assortment relevant to target customer wants and preference drive strong cash conversion.
Category opportunities could be identified by understanding the relationship between internal category offerings and performances, alongside with external market trends and competition.
Competitor Benchmarking module is used to identify category opportunities.
Step 1: Establish a competitor list
Before any analysis, it is crucial to establish a list of key competitors. This helps in streamlining the analysis to be targeted towards similar customer preferences and performance.
Always remember to save your competitor list by selecting ‘Save Filter’ under the bookmark icon after the selection of competitors in the main filter bar. You could access the support centre page here to learn more on the ‘Save Filter’ function.
Step 2 – Identifying your brand’s top 3 categories
This is an internal review into category performance. This step is crucial in understanding own brand positioning and performance, taking into account the sales and stock indicator.
Competitor Benchmarking module could help you to understand your own brand positioning and performance better. Further understand each category performance should they be over performing or underperforming, overstock or understock. This information is crucial to make decisions commercially.
Identify the top 3 categories of your brand. Toggle into ‘Product Analysis: Category Composition’ tab to do so. Here, we are taking Topshop as an example of our own brand comparison with competitors like Boohoo and Pretty Little Things.
Step 3 – Identify competitors’ top 3 Categories
The next step is rarely performed by brands, as it involves looking into external market insights. This step is however, crucial to be sensitive with any change in category assortment offerings and market reaction.
Adopt the same analysis point in Step 2, identify competitors’ top 3 categories. In this example, it is observed that the top 3 categories are similar across competitors. The only difference is the ranking among these top 3 categories, affected by SKUs available in each category/retailer.
Step 4 – Review own brand and competitor top 3 categories performance
Here, toggle to ‘Product Analysis: Trade Performance’. Observed Tops and Outerwear registered a higher sell-out vs. the average, which further validate the potential to focus on these categories. In contrast, Dresses category reflects a risk indicator registering a lower than average sell-out at 70.7% vs total categories sell-out at 72.78%.
From here, we can now take a deep dive into the subcategory level to take an in-depth look at allocating resources to maximise category potentiality.
Let’s use the category Tops as an example.
Step 5 – Validate Subcategory Opportunities By Sell-Out Rates
You could validate subcategory opportunities by adopting the similar analysis point in Step 4 ie. by comparing top subcategory sell-out performance against the average total sell-out.
You may identify subcategories with higher than average sell-out rate to further validate opportunities.
Under the Trade Analysis card, T-shirt, Crop Tops and Bodies are several subcategories registered a higher than average sell-out rate at >72.78%. This indicate a potential in these categories, especially the smaller category like Bodies. Although there isn’t a significant SKUs availability for Bodies, the promising sell-out performance reflects an opportunity to venture into this potential subcategory. In this case, the new investment into Bodies have to be well thought of to effectively meet customer demand.
With this information, you can accurately plan your assortment and prioritise for both subcategories, and reallocate budget from non-performing categories to potential ones.
Customers are expecting highly edited assortment, and fashion brands must get the essentials right. External data is important to ensure competitiveness, and increasing relevance of own brand category offerings in the market. All in all, potential category assortment gaps in the market are always present. Yet the ability to identify and venture into these unfulfilled gaps are the key in driving commercial success.
Hope you found this article helpful! If you have any questions or would like to explore the Omnilytics dashboard further, feel free to reach out to your respective Client Success Manager.