‘Tis the season to classify your products

Why classification is the key to managing product mix for manufacturers and wholesalers in fashion

Product mix is becoming increasingly important for manufacturers and wholesalers in the fashion industry. In order to track and sell seasonal, NOOS (never out of stock), and carry-over products, it is absolutely essential to rely on the data in your underlying business systems.

With solid product mix data, you have a better chance of delivering what the market demands in the fastest and most efficient way possible. If you lack basic product mix data, it becomes increasingly impossible to decide what to make or order for upcoming seasons. There is no historical data to rely on for sound decision-making.

If you’re dealing with with a lack of product mix data, and need to improve your product lifecycle management processes, we at Gung have four solid tips for you. When you’re done reading, you’ll be one step closer to being able to sell the right products at the right time at the right price.

1. Classify different types of products.

You need to get a handle on which products generate revenue and phase out those that don't.

The composition of a collection is vital to create profitability. What many people do wrong in their master data is move their collection or season label forward with the product instead of actually classifying the product as a recurring product. In terms of follow-up, this creates a problem, because it becomes difficult to understand the product mix across the different collections and thus keep track of their margins.

A version of this problem we often encounter is when companies change the article number of a product because they have seasonal logic in the article number. At Gung, we recommend that new products and additional colors need to be grouped with a collection or as part of a seasonal concept. Articles that have been sold before or that will be sold over several seasons (NOOS and carry-over) need to be classified in a different way.

2. Make different classifications available in different sales channels.

Once you decide on a product classification that works, you can find solutions to many of the challenges you’re facing today—challenges that are fraught with manual work:

• You can better manage different pricing for the same product in different sales periods or channels. For example, if a product's purchase price varies over the seasons, you can adjust the price for upcoming sales. Meanwhile, existing stock being sold pre-sale can be sold at a different price.

• You can better manage the availability of a product across different sales periods. For example, a NOOS product sold today does not have to create a shortage if it is placed on a pre-order six months from now.

• You can sell ​​different products to different groups at different times. For example, your customers should have access to different collections at different times, while your internal e-commerce team should have access to more products than are currently being sold in wholesale.

3. Better manage how you promote and sell.

With connected product classifications, you can better manage how you promote and sell. If your products groupings are properly linked to different sales periods, you can get tremendous insights into how to manage your product mix. You will have data in front of you that shows which styles have sold well, which products should be lifted into the NOOS program, and which products should be phased out.

Strong product mix data will allow you to continuously test new classifications, achieve higher margins, or adapt to new sales channels. It will also give your product management, finance, and sales teams valuable insights when they review performance and forecast for the coming period.