INTURN’s CEO Ronen Lazar recently partnered with Bloomberg to present a webinar on The State of Off-Price & 2019 Outlook. Providing an in-depth look into retail’s bright spot, the talk examined the history of off-price, emerging trends in the sector, stats from INTURN’s own data, and the company’s outlook for 2019.

Here, we’ll walk you through some of its key takeaways.

1. Though off-price has outperformed retail, there’s still room for growth.

Historically, off-price has shown more growth than the broader retail sector. Particularly during periods of economic decline like The Great Recession, off-price saw an uplift in sales, while traditional retail suffered.

There continues to be room for growth within the sector, with excess inventory presenting a $1.5 trillion market (1). As brands become increasingly willing to discount their inventory, off-price is expected to grow 41% by 2021 (2). The European and Asia-Pacific regions present even further potential for expansion, with the sector barely in its infancy in these markets and only now beginning to grow.

2. Digital transformation is critical to optimizing liquidity.

There are three core issues that brands consistently face when managing their excess inventory: fragmented inventory data with varied accuracy, the inability to utilize this data to meaningfully inform decision-making, and inefficient internal processes. These issues compound and together relegates excess inventory to an afterthought, with levels continuing to build up and age, thereby losing value over time.

Going forward, brands can address each of these issues by better leveraging technology solutions. This will enable them to gain centralized, real-time inventory information and analytical insights to streamline processing and optimize decision-making.

3. More brands are positioning themselves for success in off-price.

Data from the INTURN platform shows that brands are increasingly looking to off-price to recover money tied up in excess inventory, with growth in transaction volume increasing four times YoY.

Overall, our findings also show that INTURN clients began the liquidation process as much as 60 days earlier than in previous years, allowing them to maximize their returns—a win-win for both brands and retailers alike.

4. The structure of the off-price model means it will continue to thrive in 2019.

Off-price retailers have continued to expand in recent years. 2019 will be no exception, with the structure of the off-price model positioning the market for growth regardless of the political or economic landscape. When the economy is thriving, all of retail is thriving. Off-price by nature is anti-cyclical, meaning that the sector has especially flourished during periods of low GDP growth. In a weak economy, buyers will often turn to off-price retailers for discounted goods, further fueling their growth.

In fact, in 2009, the off-price market saw 7% YoY growth, while traditional retail instead declined by 5% (2). With that in mind, even in the event of a recession, off-price growth would be likely to continue.

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Looking ahead, a heightened focus on the management of excess inventory, as well as innovation throughout the supply chain, will drive off-price expansion. It is imperative that brands establish strategies to optimize their off-price business, as those that are proactive in their approach are often in the strongest position for success.

For those looking to uncover further insights into the off-price landscape for 2019, sign up here to watch the full recording of the webinar.

(1) Euromonitor International
(2) Moody’s International Research