changes in product offerings in line with the fashion cycle. Inventory management and risks associated with the
same are accordingly priced in and managed. W and Biba are fashion focussed Ethnic Fashion Retailers. Westside
and Reliance Trends are fashion focussed LFS across multiple categories.

Customers while buying fashion apparel focus more on the design and trends that they are exposed to as being
“in-style”. With the advent of social media, customers are exposed to the trends worldwide and are influenced by
those trends, with their preferences changing frequently. Whereas while buying basic or core category apparel,
customers tend to focus more on the prices, comfort and fit of the outfit.

Basics/Essential vs Fashion

e High inventory risk
Seasonal sales are higher
Frequent trend and style changed can
render old stock less desirable

e Very low inventory risk
Inventory Risk e Products sold throughout the year
No frequent trend or style changes

 

 

 

 

 

 

 

 

Repeat Purchase | ¢ High e Low
ASPs e¢ Lowto Medium ¢ Medium to High
Fast Moving SKUs | ¢ Set of 3/ Pack of 2 e Single Unit but higher basket value
Examples ¢ Bottom-wear, Innerwear, Socks, etc ¢ Tops, Kurtas, Shirts, Dresses, etc

 

Impact of external factors on businesses that are focussed on basics and on fashion retail therefore play out
differently. For instance, in the COVID-19 induced lockdown, fashion focussed retail brands like Zara faced a
larger set of challenges on inventory obsolesce and lost sales in comparison to apparel retailers that were primarily
focussed on core categories like Go Colors. On the other hand, commoditization threat from the unbranded
segment is higher for core / basic products both for the ease of product replicability and lack of visual
differentiation. Therefore, retailers like Fabindia, Zara Biba and W stand out for their product designs are a key
product differentiation. Also, brands like Go Colors with its wide range of SKUs and colours has provided it with
an edge and high visual differentiation.

Bottom-wear mirrors basic categories in their universal appeal and functional needs that drives repeat purchase.
Consumer buying patterns and apparel trends had changed from ‘one-piece’ apparel like sarees to ‘two-piece
apparel’ apparel like SKD sets and currently the buying trends are inclined towards purchase of ‘separates’ and
mix and match of clothing and Go Colors has acted as a category creator in facilitating this for bottom-wear.

Growth of ‘one piece’ and ‘two-piece’ (sets) women’s apparel (in crores)

 

mSKD Sets mSaree

Source: Technopak Analysis

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