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Nobody can explain how L.L. Bean boots became one of the hottest commodities over the 2016 holiday season, but Lynn Switanowski hazards a guess: social media. Lynn, a retail expert at Creative Business Consulting Group, is quite sure an actress wore the coveted boots on social media. “It followed with more stylists showing them on clients, and before you knew it, every girl on a college campus wanted a pair,” she says.
Fads are nothing new to eBay sellers or to the world of retail in general. But whether they’re boots or Beanie Babies, fads have a few characteristics in common, says Cristina Ceresoli, Senior Vice President of Retail Strategy at the National Retail Federation: Fads seemingly come out of nowhere and the growth curve is tremendous. The lifecycle of a fad goes from early adopters driving growth to increased production to retailers buying in large amounts early until the fad properly catches on—and then eventually peaks when it hits the mainstream and fizzles out. It’s a cycle fueled by demand and fades fast, Lynn says.
Yesterday’s Cabbage Patch Kids are not today’s fidget spinners. Today’s fads have many more movable parts, making tracking them a much more daunting venture. For one thing, the cycles are much more compressed. “Because of social media and influencer marketing, there’s a lot quicker turnover when it comes to a fad,” says Nicole Reyhle, founder and publisher of Retail Minded, a retail lifestyle publication. That means sellers need to act fast.
And it’s not just the time cycles that have changed, the geography of a fad has morphed too, Cristina says. Historically fads used to spread up and down the U.S. coasts and then toward the middle of the country, but with Gen Z taking their inspiration from around the world, both the origin of a fad and the way it moves have changed dramatically, she says. “So it’s not only following a speed curve that’s different, it’s also following a spatial curve that’s different.”
To muddy the waters further, micro-fads, where there’s a slower sizzle and pop, have also become a thing, so eBay sellers might have to look at more than just one hot thing. How then do savvy retailers spot a fad, stock and sell it and know when to get out?
Here are a few tips.
Know where to look.
That’s easier said than done, especially because spotting a fad is like looking for a needle in a haystack. The first rule of thumb: social media. Diligently follow social media influencers, Nicole says, because you really have to keep an eye on the ball. “Use hashtags. #fashion or #toys or whichever retail segment you’re interested in.
It might sound simplistic but just reading and having a diverse set of friends helps, Cristina says. For example, friends with kids know what’s trending for the younger set. This can be valuable intel especially since fads break from all over the world these days and kids are among the early adopters.
Attend industry trade shows and see what buyer groups who buy for larger showrooms are checking out. Sometimes floor buzz can be an early indicator of what’s going to catch on as a mini-fad.
eBay’s Trending Now page is a great tool to keep your finger on the pulse on current and upcoming fads.
Know how much to buy.
Make psychology work for you. “Some level of limited availability drives desire—the message that something will not be available forever,” Cristina says. “The upside is that the trend will get bigger and bigger and you ask yourself ‘how do I capture some of that’ and the flip side, the not-so-happy place, is if you have too much inventory to liquidate when the fad dies down.”
Nicole advises eBay sellers to always have some open-to-buy dollars in their budget, meaning they have money to spend on unplanned purchases. This makes them even more nimble than they already are to act on trend. Opening accounts with wholesalers who deliver reliably is also a good idea, she adds.
When in doubt, buy less, the experts advise. “There’s never shame in getting as much as you can out of the fad but leaving a bit on the table because that means you can protect yourself from a much shorter sales cycle,” Cristina says. No seller wants to caught holding the bag when the once-hot item cools.
Get the holiday jingle.
Merchandise for big-ticket events such as Back-to-School or the holidays, Nicole advises. In everything from your social media to your email newsletters to your in-store merchandising, make a concerted push to spread word about the inventory and what’s hot.
But, she says, eBay sellers need to be aware that not every fad is for them. If the fad falls out of your usual area of expertise, it’s okay to pass.
Know when to get out.
Study your sales diligently, the experts advise. “Many independent retailers don’t understand that a blended margin, that is, selling a large number at regular price and [a smaller number of units] at a discount, will still lead to a very profitable result,” Lynn says. “Retailers need to take a small markdown as the fad begins to wane in order to liquidate final units instead of waiting for the fad to totally die, at which point the merchandise is no longer worth even 50% off.”
The best part about fads is that small- to medium-sized eBay sellers can play the game precisely because they are small, Nicole says. “In fact they have more ordering power because their orders are going to be easily fulfilled, especially if they have an established relationship with wholesalers,” she says. “And small retailers have an easier sell-through on fads than a big-batch retailer who might have to invest in thousands.”
All the more reason for eBay sellers to cash in on the next fab fad.
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