Dear Baby Cotton Product Procurement Specialists, Regarding the daily “betting” on cotton product procurement decisions and improving sell-through rates, what strategies could ensure success with inventory choices?
In the Spring Festival of 2024, the popularity surge of neo-Chinese clothing styles caused a sales phenomenon of stock-outs in the maternity and baby retail segment, with stores scrambling to replenish their inventory.
However, when it comes to ordering winter products for the same year, the dilemma focuses on whether to continue investing in the neo-Chinese trend or to place bets on other styles. For baby cotton product buyers, this is a gamble.
In the winter of 2023, down jackets sold out. However, the mild winter of 2024 put pressure on down jacket sales—a tissue of contention is an undeniable truth.
“The high season for down jacket sales is typically November. Last year, we managed a sell-through rate of 90% for down jackets. But the climate in November this year was indeed warmer than usual, affecting the sales, causing a 20% year-on-year decrease in cotton product sales,” said the purchasers.
Another point to consider is the earlier celebration of the Lunar New Year this year, which means there is a coming cycle of new-year clothing consumption. Whether to discount down jackets in December or take a chance on January is yet another gamble.
As “betting” becomes routine in cotton product procurement, how can buyers choose inventory wisely to maximize sell-through rates? What proven business strategies can be replicated here?
During a private exchange meeting for children’s clothing held by CBME Business School in Zhili, CBME Insights spoke with three cotton product buyers from different regions and retail chains to explore these questions.
01. Establishing Position
Double down on essential styles for baby
Concerning cotton products’ selection criteria, quality was the core factor cited by the three buyers, followed by style—primarily staple designs with trendy children’s clothes serving as complementary accent pieces.
Aligning with the positioning of the three chain systems—that cater to a target market of 0-3-year-old baby and toddlers—this choice also resonates with the current consumer demographic served by maternal and baby retailers.
One buyer noted that online shopping would inevitably take a share of the cotton market, with online consumers likely prioritizing style and price.
“Offline retailers cannot compete with online prices or styles. So it’s better to focus on catering to babies’ quality-conscious purchasers offline by offering high-quality staple items that don’t go out of style. This strategy also reduces inventory pressure on stores,” the buyer advised.
Yet, due to the increasing aesthetic standards among mothers, another buyer emphasized that while focusing on staple items, manufacturers should also evolve with the times, adding more personalized and fashionable elements into designs, even in the details.
02. Choosing Products Carefully
Finding a balance between conservative and trend-chasing
Although trendy children’s outerwear isn’t a large market share, it’s essential to cater to consumers’ aspirations for fashionable children’s wear and aesthetic parenting to complete the offering of maternity and baby stores.
A buyer commented, “If the trend leans too conservative, it won’t appeal to the new generation of shoppers; but chasing fads could lead to inventory pressures and financial strain for the company.”
In the face of unpredictable fashion trends, how can one improve the precision of ordering and minimize procurement risks?
Initially, past data serves as the primary support. Buyers would examine past cotton product sales, current membership status, and average spending. This information provides a preliminary assessment of the members’ purchasing intentions and capacities.
Next, the key to leveraging member purchasing power is clearly to cater to their preferences.
A buyer shard, “When selecting products, we consider store sales associates’ feedback on consumer preferences, style trends on Xiaohongshu, and the direction of adult clothing trends.”
For example, the popularity of the neo-Chinese style during the Lunar Year of the Dragon in 2024 was anticipated based on the success of adult neo-Chinese styles, with trends in adult clothing typically reflected in the children’s section in the following quarter.
03. Effective Execution
Deep-cultivating cotton products and differentiating store operations
Post-procurement, the challenge is the in-store execution capability.
A common sentiment in the industry is that the importance placed on cotton products by the owner determines if they can be successful.
One buyer mentioned that their retail system had dedicated visual merchandisers and in-store assistants for the cotton product segment, responsible for implementing displays and managing real-time inventory, which included restocking reports for out-of-stock items.
Given the different cotton product sales performance by store, differentiated operations have also become part of some retail chains’ approach.
“We vary our cotton product offerings based on the store location. In city-center stores or shopping mall flagship stores, we offer mid-to-high-priced items. Community street-side shops emphasize supreme cost performance,” one buyer said.
Another buyer noted that in actual operation, considering the purchasing power of customers, stores are categorized. “For ‘A’ category stores, we cater to the demands of young mothers on Xiaohongshu and pilot trendy children’s clothes. For less performing stores, we might gradually reposition them as discount outlets for older styles.”
04. Clearing Channels
Seizing opportunities for rapid clearance
It’s essential to find a good “exit” for cotton products, which is a consensus for those aspiring to excel in selling these products. Especially as market conditions change and it becomes increasingly challenging to achieve high sell-through rates, inventory pressure is an ever-present reality.
Having a channel for quick clearance becomes imperative.
Besides having “tail stores” take on older cotton product discount sale actions, hosting carnivals is another common strategy.
“We generally have two carnivals a year, each clearing several thousand pieces of clothing,” said one store.
Some chains have also moved these carnivals online, targeting private domain customers with live sales. “Offering extreme cost-effectiveness in pricing to clear inventory.”
However, the core of clearing stock is seizing the right timing.
Coming back to the initial question, deciding whether to clear down jacket stocks in November during a warm winter or before the early Lunar New Year at the end of January is a “bet.”
Indeed, different retail systems have different strategies. From a risk management standpoint, one buyer noted they opted to clear as much stock as possible in December. In cotton product operation, there are often no universal correct answers.
CBME Insights Sidebar
Indeed, cotton products indicate inventory and financial risks, but their high profitability and customer retention advantages continue to attract retailers.
2024 CBME audience data revealed an increase in interest among offline retailers in children’s wear from 14.94% in 2020 to 17.8%. In 2024, children’s apparel remained in the top three preferences for offline retailers, agents, and online channels.
To optimize the operation of the cotton category, the buyers also call on brands/manufacturers to provide deeper services and collaborate with retail stores to increase sell-through rates.
“If possible, we hope that brands can have supervision on-site or a specialist to follow up with us.”
“We also hope to be promptly informed about good marketing points, including advice about display layouts, product displays, and matching. Interactive activities in sales associate groups during key promotional events can boost our enthusiasm.”
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