The industry has been busy putting out fires, ensuring they can keep their businesses running during these tumultuous times. With longer-term business strategies in mind, Erik Ulin, NuORDER’s VP of Retail Partnerships, extends his expertise on key areas of focus for retailers and vendors. 

How can retailers leverage consumer data to offer opportunities to valued customers? 

It’s worthwhile to look at your data to discover your most loyal customers. Whether online or offline shoppers, you’ll see about 20-30 percent of your customers account for 70-80 percent of your sales. They’re the ones to nurture and communicate with now, versus trying to get new shoppers or the occasional customer who might have bought a piece or two over the past few years. At this time, it is important to focus on the retention of your loyal customers rather than just trying for top-line discounted offers to everyone. Brands are seeing positive responses for either community-based incentives where a portion of profits are going to charities or where a credit for future purchases is built into an offer. It’s important to note that customers are being targeted quite heavily with discounts, as everyone is in the same boat. But now is the time to test out new marketing messages, channels, and creative! 

What are the most practical steps retailers can take to create stronger partnerships with top vendors? 

Talk to each other. Have a conversation about how you can help each other because it isn’t a one-sided problem. Both retailers and brands are struggling at this point. Retailers should look for better solutions than just simply canceling orders on a blanket scale – this could involve payment terms, pushing out future deliveries, shifting to consignment, just as a few examples. Cuts will likely happen, but this is still better done in dialogue than in a vacuum. There are creative options that can be discovered through a simple conversation.

How else can retailers and vendors work together for mutual longevity? 

During a recent webinar, the CEO of Hilldun, Gary Wassner, made a going point stating that this is the moment to start thinking about how pieces fit together regardless of season. If you as a brand are not shipping, or a store not receiving anything new in the next 3-4 months, you’ll have 2-3 seasons of product in warehouses and stores that will need to be sold somehow. A knee-jerk reaction would be fire sales, which is natural just for the sake of generating cash flows. However, employing this as the sole vehicle for reducing your on-hand inventory can hurt your future as a brand. Reviewing your current inventory to identify product that could qualify as season-less or staples could help maintain some margin, while clearly seasonal product is on sale. But there’s no question that there will be a large amount of product offered to consumers at a deep discount.

What are the best digital solutions for retailers’ pivots? 

Going forward, everybody needs to look at digital solutions to conduct their buys. After (and also during) this quarter, as brands and retailers start to gain some sense of footing in the new reality, there will need to be planning for the future. This time will pass. There will be a new morning, and people will need clothing. For buying and planning, NuORDER is an optimal solution to employ to be able to access brands and products for future needs. It’s also important to have a good CRM system to look at how you’re working with your current base of online and offline consumers. Use this time to understand what has and hasn’t been working in outreach. If there was ever a time to test your messaging, it is now. And last but absolutely not least – if you do not have an e-commerce enabled website and social feed, this is your first order of business.  

How can retailers and vendors minimize costs? 

A great way of getting an overview is to build a 13-week cash-flow plan, which is something I did for companies in my days as a restructuring advisor. These are detailed cash planning and forecasting models in Excel, where every inflow and outflow is logged, down to the most minute detail on a week-to-week basis. This helps identify where your cash is being directed and can help you prioritize which vendors and suppliers you need to address first, as well as which parts of your operating activities could potentially be rationalized in an effort to conserve cash at this time. 

Additionally, everybody should look into the SBA loans and grants from the government stimulus package. Work with an accountant. If you don’t do it right, it will be very difficult and time-consuming to restart the process. There’s no silver bullet in minimizing cost – everything must be scrutinized. 

Social responsibility is top of mind for consumers. How can our industry make a difference? 

The way brands and retailers treat their customers and employees during this time will reverberate for quite a while. 

If you leverage your tools and resources to help, make sure to do your research before you spend your precious time, money, and materials. Make sure you understand your state’s regulations so that your goods are allowed to be used by the healthcare community or whomever you are trying to assist. There have been several cases where PPE has been produced only to be rejected because of state regulations on certifications for suppliers. 

Additionally, brands are increasingly getting involved with community and charity support, specifically focused on helping different aspects of the current health crisis. One example is a great new initiative where about 30 digitally native brands have come together, called BRANDS For BETTER . They’re donating $15 of every purchase to City Harvest, supporting their local community in NYC. They also joined the 10+ Movement of brands donating 2 percent -10 percent of proceeds to nonprofits supporting COVID-19 efforts. They are accepting applications to participate in the program via their website  www.brandsxbetter.com. 

What do you believe will be the lasting impact on the fashion and retail calendars, if any? 

This situation forces long overdue change. We’ve all heard of Buy Now, Wear Now. I believe there will be a positive shift in the fashion calendar that will also help retailers avoid the never ending mark-downs in the pursuit of consumers. As deliveries will get pushed out, rather than delivering warm winter jackets in July, these will likely hit stores in October when the weather is more appropriate for those types of garments. Products arriving at stores closer to or in the season they are to be worn creates more immediate need; any mark-downs would occur towards the end of the season, rather mid-season and discourage consumers from waiting.

The shift towards digital will also have a big impact. In-person experiences are significant, especially in fashion – but over the next quarter, I think we’ll prove a lot of business can be done effectively over a distance through digital tools. The industry circuit will also be less traveled. Most travel has been a matter of routine, versus need. What are the must-haves versus the nice-to-haves when it comes to our business interaction? Less travel would also have a positive impact from an environmental perspective.

Erik Ulin is a long-time industry veteran. Before joining NuORDER, Ulin ran E2 Brand Management, a fashion consulting firm working with brands, investors and technology firms. His career also includes past roles as head of menswear for UBM Fashion and president of J.Lindeberg USA. Mr. Ulin shares actionable advice on how to adapt to the industry’s new normal.