FASHION
Winning In Today’s Retail
Environment: Developing
a More Compelling Sales
Argument
Canada Retail Industry
Over the past two years Canadian apparel sales have remained fairly flat.
However, Canadians now have more choices than ever before when they’re
shopping, as an influx of new retailers have opened or plan to open locations
in Canada. As the competition for limited retail space and dollars heats up,
how can you ensure you are part of key retailers’ assortment plans?
About The NPD Group, Inc.
The NPD Group provides global information and advisory services to drive better business decisions. By combining unique data
assets with unmatched industry expertise, we help our clients track their markets, understand consumers, and drive profitable growth.
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Developing an Effective Sales Strategy
As the retail environment changes, you may need to work with new retailers to ensure you are part of their
assortment. Or you may need to defend your products as retailers reevaluate their assortment in light of
competitive threats. How can you gain new distribution or defend your position with your current partners?
You must establish a point of difference from your competitors by understanding the challenges or
opportunities retailers are facing and showing them how your product will address their needs. Use a factbased argument that shows growth potential in dollars or traffic backed up by consumer demand and
preference for your product or brand over others.
Determine
the key retailers
you should
partner with
Assess demand
for your product
Build your
sales story
Grow your
business
Strategy
Best practices suggest the first step in developing your sales story is to understand the size of your target
category and whether it is growing or declining. For example, a children’s clothing manufacturer wants to
increase the number of SKUs with key retailers. Of all children’s clothing, boys’ clothing is outperforming the
market with 7 per cent growth. This is your first selling point – offer a wider array of boys’ clothing to meet
consumer demand.
Year-Over-Year Percent Change in Dollar Sales by Wearer — Canada
7
-1
-7
-1
Total Market
Girls (4-12)
Infants/Toddlers (0-3)
Boys (4-12)
Source: The NPD Group/Consumer Tracking Service Sample Data
7
44
24
-7
-1 look across 13
-1 stores and department stores are outpacing
You then notice that when you
channels,
10specialty
5
3
1
other channels in children’s clothes sales growth. Now you can focus your efforts on boys’ clothes to
department stores, which you believe is a good fit for your brand.
Girls (4-12)
Infants/Toddlers (0-3)
Boys (4-12)
Total Market
Specialty
Mass
All Other Department Off-Price Warehouse Mfr.Owned
Stores
Merchants
StoresGrowth
Retailers
Children’s
Apparel Sales Percentage
by RetailClub
Channel Stores
— Canada
44
Retailer A
24
Retailer B
5 13
9
Retailer C
10
5
15
Retailer D
Specialty
Stores
Mass
Merchants
All Other Department
Off-Price
Dollar Share
Stores
Retailers
3
1
28
Warehouse Mfr.Owned
Club
Stores
Source: The NPD Group/Consumer Tracking Service Sample Data
Retailer A
Retailer B
Retailer C
5
9
15
Retailer D
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Dollar Share
28
Girls (4-12)
Total Market
Infants/Toddlers (0-3)
Boys (4-12)
44
The next step is to identify which department stores you should target. All of them? One leading retailer
24
13 You could
10 try to5 convince
dominates children’s’ sales.
3 the leading retailer that your products could drive
1
more sales than the incumbent’s. Or you could reach out to the retailers’ competitors and tell them how
your product may be able to steal some of that share.
Specialty
Stores
Mass
Merchants
Retailer A
Retailer B
All Other Department Off-Price
Stores
Retailers
Warehouse Mfr.Owned
Club
Stores
Top Canadian Department
Stores
— Children’s
Apparel By Dollar Share
5
9
Retailer C
Source: The NPD Group/Consumer
15
Retailer D
28
Tracking Service Sample Data
Dollar Share
Validate Demand and Retailer Fit
To make your argument even stronger, you can use custom research to quantify consumer demand. You
can ask consumers if they would purchase your boys’ clothing line, what they like or dislike about the
products (color, price, brand, etc.), how unique they consider your clothes versus other brands available,
and how they perceive the quality of the brand. Plus, since you know the retailers you are targeting, you
can use these studies to ask consumers if the product is a good fit for specific retailers.
You can also ask questions to gauge whether your product will help retailers boost traffic with the key
demographics they are hoping to reach. For example, if a department store is hoping to win the business of
mothers with household incomes of $100,000 or more, you can demonstrate how that demographic has an
interest in your clothes.
Your Sales Story
Now that you can show demand and illustrate how new items will help the retailer meet its goals, you can piece
it all together to demonstrate a strong case for your product. You’ll be armed to show the retailer your story:
■ There was over $2 billion in children’s clothing sales last year. Boys’ clothes grew 7 per cent, while girls’
and infants’/toddlers’ clothing sales declined.
■ A gain of 2 per cent share in the Canadian kids’ market would equal $48 million. A retailer could
increase share and make millions by expanding its boys’ clothing assortment.
■ A custom study revealed moms feel there are not enough clothes options for boys.
■ The highest demand is among moms with incomes over $75,000.
■ One-quarter of moms said they would go to Retailer A, a department store where they do not typically shop,
if they offered this line of boys’ clothing. That could result in incremental sales in other departments, as well.
Learn More
For more information, contact Silvia Xoyon at 647.723.7765 or
email [email protected].
0214
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