Calla Murphy is vice-president Digital Strategy & Integrated Marketing for Belardi Wong, the leading direct-to-consumer (DTC) agency. She monitors sales of her clients and had some valuable suggestions.
Calla observed that DTC companies saw sales soften in the first half of this year. While most companies reported slight increases, year-to-date increases are about 3%. In June men’s wear increased to about 16% during the weekend preceding Father’s Day. Men’s wear had been lagging most of the year. In other words, Father’s Day woke up consciousness of the whole family and reaped strong rewards. However, sluggish men’s wear sales returned after the festivities.
Calla forecasts sales to be sluggish for the rest of the year, with a 3% average as a good goal. She believes companies can be profitable with that increase, if they control expenses and inventory. The key word is “control” by not buying too much for regular and sale events. She points to the many ways her clients can increase their sales.
Calla is particularly fond of e-mail which can be personalized to gain greater readership. Many of her customers have been very successful in promoting a sale event by the direct mail contact.
We are currently in the back-to-school season, and many of Calla’s clients are promoting heavily. She anticipates that the post-Thanksgiving period will also see strong holiday promotions since many companies are planning major events for an uncertain sales period. While not expecting a hard recessionary period, but rather a soft landing with further Federal Reserve increases, Calla sees a very promotional post-Thanksgiving selling period.
Tight inventory control might result in merchandise shortages. A hot selling item might sell out, and some clients might be disappointed. This year customers must buy early if they want a specific item in a specific color. The retailer will be happy with successful sales, and customers will rejoice at having found the item they wanted.
POSTSCRIPT: The forecast of about 3% sales increase for the current year is encouraging for DTC retailers. They can plan promotions with tighter controls. It is likely that manufacturers will cut garments to order and not await reorders that they would fill at the last moment. We can expect a promotional ending of the year. The DTC industry has grown, and many brand manufacturers now sell directly to customers.
Read the full article here