Which Apparel Products are Out of Stock in the US Retail Market?

US fashion brands and apparel retailers face the challenge of running out of inventory amid the holiday season and the ongoing shipping crisis. Based on consultation with industry insiders and resources, we take a detailed look at which apparel products are more likely to be out of stock in the US retail market. Several patterns are noteworthy:

First, clothing products targeting the premium and mass market face more significant shortages than luxury or value apparel items in the US. Take clothing items in the premium market, for example. Of those apparel products newly launched to the US retail market from August 1 to November 1, 2021, nearly half of them were already out of stock as of November 10, 2021 (note: measured by SKUs).  The increased demand from middle-class US consumers could be among the primary contributing factors.

Second, seasonal products and stable fashion items are more likely to be out of stock. For example, as we are already in the winter season, it is not surprising to see many swimwear products run out of stock. Meanwhile, it is interesting to see stable fashion products like hosiery and underwear also report a relatively high percentage of inventory shortage. The result could be the combined effects of consumers’ robust demand and the shipping delay.

Third, apparel products locally sourced from the US seem to have the lowest out-of-stock rate. Reflecting the shipping crisis, clothing items sourced from Bangladesh and India report a much higher out-of-stock rate. However, a substantial percentage of “made in the USA” apparel was in the category of “T-shirt”, implying switching to domestic sourcing often is not a viable option for US fashion brands and retailers.

Additionally, fast fashion retailers overall report a much lower out-of-stock rate than department stores and specialty clothing stores.  This result showcases fast fashion retailers’ competitive advantages in supply chain management, which payoffs in the current challenging business environment.

On the other hand, the latest trade data suggests a notable increase in the price of US apparel imports. Notably, the unit price of US apparel imports from almost all leading sources went up by more than 10% from January 2021 to September 2021.

by Sheng Lu

Author: Sheng Lu

Professor @ University of Delaware

3 thoughts on “Which Apparel Products are Out of Stock in the US Retail Market?”

  1. Although I was aware of the current supply chain crisis, I was unaware of the specific patterns and apparel products out of stock. I found it interesting that fast fashion retailers have a much lower out of stock rate. This makes sense as they are able to produce a larger quantity for a cheaper price at a faster rate. Another point I found interesting was that mass market and premium items face a greater shortage than luxury items. I would assume this is because mass market and premium items are in a larger demand due to a lower price and a target toward the majority of the population. Luxury items are seen as rare, which means less frequent purchases, and therefore it makes sense that there is a lesser shortage. Overall, I personally see the effects of this shipping crisis and it is very interesting to think about.

  2. As the blog suggests, shipping delays are related to distance. As such, it would be interesting to see if brands start increasingly sourcing from the Western Hemisphere, which is in closer proximity to US retail stores. Especially under free trade agreements such as CAFTA-DR, this move might be especially attractive to US fashion brands and retailers. However, one major holdback to moving to the west is production capabilities of the region.

  3. As the holiday’s come closer, I am definitely starting to see the effects firsthand regarding the shipping crises and apparel products out of stock. However, I found it especially interesting that not only seasonal products are out of stock but stable products such as undergarments are running out of stock. I believe this is the case because many people were warned in advance about the shortages on the rise; thus, the panic caused them to stock up on essential clothing items. Secondly, I found it interesting that fast fashion retailers have a much lower out-of-stock rate than department stores and I think it will be interesting to see in the future whether department stores and other retailers will adopt the supply chain strategies that fast fashion retailers have good management over.

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