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

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Author: Sheng Lu

Professor @ University of Delaware

13 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.

    1. Great observations. Several follow-up comments: 1) Fast fashion brands tend to do more “near sourcing”, which makes them less vulnerable amid the current shipping crisis, mostly involving shipping from Asia. For example, here is Inditex (Zara)’s supplier map: https://openapparel.org/?contributors=225

      2) fast fashion brands also tend to work with vendors with vertically integrated manufacturing capability (i.e., factories that can both make textiles and garments). Such a strategy paid off during the pandemic.

      3) Department stores carry a broader category of products than specialty stores and fast fashion brands. Thus, department stores could be more struggling with the current supply chain crisis.

      Would love to hear more first-hand observations from our students about the impact of the supply chain crisis on sourcing, product assortment and merchandising.

  4. After reading this article, I found it very interesting how the mass market products face the highest shortage rates when compared to luxury or value products. I would have assumed this sector would see relatively normal stock, as it can be assumed to be the most demanded. Along with this, I noticed how consumer buying patterns are greatly emphasized in imports rather than on-shore, as US produced products face the lowest shortage rates. This could possibly be an incentive for consumers to shop in their domestic market. Having US apparel import prices rise could potentially become an issue for shoppers, as shortages and high prices are not an exciting reason to purchase. One thing I noticed that is significant is that fast fashion is reporting a lower out-of-stock rate than other stores, demonstrating their establishment of an efficient supply chain especially in time for the holiday season.

    1. You can further check the dynamics of the stock to sales ratio: https://fred.stlouisfed.org/series/MRTSIR448USN

      The stock-to-sales ratio surged when the US economy was shut down suddenly in March-april 2020 due to COVID-19. Then the ratio quickly went back to the normal range. However, the ratio fell to a historical low in most recent months, suggesting retailers are struggling with the inventory. As the ratio reflects the overall performance of the US clothing market, it seems to echo the argument in this blog post that product shortage is most severe in the mass market.

  5. As the holidays come up, it is interesting to learn that we are missing out on some products in the U.S. retail market. It makes sense to me that more premium and mass marketed products are experiencing more of a shortage than luxury items. It also makes sense to me that seasonal items such as swimwear, flip flops etc. aren’t going to be shelved in stores as they are not in season right now. But, it was definitely shocking to learn that the market is seeing underwear products being out of stock as that is a common necessity within the industry for every individual.

  6. The affects of the pandemic on businesses was been major but mainly impacting supply chains worldwide from major manufacturing or shipping delays to overall inventory shortages. This post goes over what industries and products are taking the biggest hit in terms of inventory depletion including mass market products facing majority of the inventory issues.

  7. It is interesting to read how fast-fashion retailers have a lower out-of-stock rate than department stores and specialty clothing stores. I would think it would be the opposite due to the increase in the amounts of styles necessary within the fast fashion market, but their supply chains are managed better. It is not surprising to me that seasonal products are more likely to be out of stock, as it is usually like this. I am interested to see in the coming months what products will be harder to get. Especially after this holiday season, I am wondering how the shipping crisis will be resolved and when things will return to normal.

  8. The robust demand of consumers for the 2021 holiday season is stemming entirely from the effects the pandemic had on us. During 2020, consumers were spending less and saving more, which is why they are more eager to shop this holiday season and are purchasing more than normal. Additionally, many did not spend the 2020 holidays with their loved ones, so they are making up for lost time with extra presents and purchases. Due to the increase in popularity of fast fashion, it is clearly difficult for these brands to keep up with the extensive levels of demand, which is why they are experiencing shortages. People are eager to shop and buy more, and many are gravitating towards these fast fashion brands where they can buy more for less, which is leading to the shortages. Unprecedented times in our everyday lives lead to unprecedented times for retail, as the surge in demand was unsuspected and rapid. Changing supply chains, shipping delays, and the willingness to purchase more than ever are all contributing to the apparel shortages.

  9. With the holiday season approaching, it is not shocking that US fashion brands and retailers are experiencing shortages. From first hand experience, there has been this pair of shoes that I have been wanting for months, however every time I go on the website they are always sold out in my size. The website recently restocked this item, and once again my size was sold within minutes. This particular shoe has grown popular over the last few months and is in high demand. I am interested to see how these shortages and shipping issues will be resolved in the near future.

  10. I have been aware of the shortages due to the pandemic, but it is very interesting to see the shortages illustrated and compared to other segments. The shortages in different segments than people would assume illustrate the change in consumer demand. Everyone has had the frustration of checking websites to see the goods they want completely sold out and this is due to the disruption in the supply chain. Factory closures and shipment delays can be attributed for these delays. It is going to be very interesting to see how the segments struggling the most, premium and mass market, are going to recover from this crisis.

  11. It is a worldwide common knowledge that especially since the COVID-19 pandemic, the fashion industry has been experiecing supply chain issues and out of stock shortages that have not ever been seen before. We are in unprecedented areas within the industry. Something that was drawn to my attention from this article that I did not know before was there is a pattern that goes into these shortages. It was interesting to see how depending on the season and the product depends on how much of a shortage there is. I think this is due to the fact that the mindest of customers have shifted since the pandemic and the lockdown hit. Consumers have come to the mindest of “do I really need this?” or “is it worth buying?” which shifts how much of certain products are bought. Items like underwear make sense as to why they are a hot commodity and the shortage and it also make sense that there is less out of stock shortages within luxury companies versus mass companies. This once again highlights the fact that people are focusing less on buying just to buy and are buying what they think they need and is beneficial to the consumer.

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