In fashion retail, planning promotions in isolation is akin to designing a runway show without backstage coordination — chaotic and costly.
Promotions can account for up to 30-45% of total revenue, especially during peak seasons. Yet McKinsey reports that 58% of promotions fail to break even due to poor execution.
Recent industry data reveals that the global apparel market surged to nearly $1.8 trillion in 2024, meaning even a 1% promotion-driven boost can shift fortunes by billions. Best-in-class companies that utilize accurate trade promotion forecasting experience an average 28% gross margin uplift; yet, one-third of brands still rely on spreadsheets or siloed systems.
You’ve seen it before. A killer promotion campaign launches — the ads are slick, influencers are buzzing, customers are hyped, and the demand is real — but the racks are empty. Or worse, overloaded with the wrong sizes after the buzz dies down.
Meanwhile, a Salesforce survey found that 73% of customers expect product availability during promotions, and 69% would switch brands if their desired item is out of stock.
The culprit? A disconnect between promotion planning and supply chain planning. These two should be fashion BFFs — but too often, they’re more like awkward acquaintances who never text back.
Add to this the increasing unpredictability of global trade, with shifting tariff structures and rising transportation costs, brands can no longer rely on static planning cycles. A promotion that looked profitable two months ago may suddenly be a margin-eater today. Agility in aligning promotional tactics with real-time cost structures and supply chain realities is not just nice to have — it’s essential.
It’s time to bring them together.
Pre-Season Planning: Buy Smarter with a Plan
Retailers who plan promotions in conjunction with pre-season buying decisions create a better alignment between assortment depth, pricing strategy, and inventory placement. By embedding promotional lift forecasts into pre-season planning and buying into hero products with healthy margins to be featured in promotions, businesses can prevent costly over- or under-stocking. Given the recent changes to the tariffs, now planning by sourcing countries becomes an even more critical step to maximize margin.
This starts with the Merchandise Financial Planning. Having real-time what-if capabilities, along with the ability to simulate different costs and price elasticity models, enables retailers to continuously plan scenarios as market dynamics evolve. However, it is even more impactful to buy the right amount at the option-size level with the promotional lifts built in. Ultimately, that’s what shapes the customer experience and ensures a promotional campaign delivers the expectations of the customers as well as the business.
In-Season Agility: Execution Matters
Effective in-season campaign execution requires real-time visibility into store- and size-level inventory.
For example, advertising a promotion on denim while stores are missing key sizes creates customer dissatisfaction.
Dynamic replenishment and promotion-aware allocation algorithms allow brands to respond to actual demand to ensure the right sizes are allocated to the right stores to maximize conversion during a promotion. The best part is that all those decisions can be automated, and let the planners focus on new challenges, such as sourcing strategies in light of the fluctuating tariffs.
Inventory Excellence: What Leaders Are Doing Differently
According to The State of Fashion 2025 by McKinsey, the fashion industry is plagued by both excess inventory and stock-outs. In 2023 alone, between 2.5 and 5 billion items of excess stock were produced, representing $70–140 billion in lost value.
In response, leading retailers are investing in tech-driven, end-to-end planning and rethinking operating models to allow faster reaction times, reducing working capital and improving margins.
Tariff Volatility and Sourcing Shifts: Why Supply Chain Context Matters
Rising trade restrictions — up 5x since 2015 — and logistics disruptions are reshaping global sourcing. Shipping costs between Asia and the US rose 165% in just two months from late 2023 to early 2024. Just when we thought that was bad, the Liberation Day tariff changes came.
Retailers must now consider not only unit costs but also sourcing risks and lead times and tariff increases. Has anyone been on an apparel earnings call where tariffs were not mentioned?
When campaign timing collides with delayed shipments or tariff price adjustments, margin erosion becomes inevitable unless supply chain planning is integrated into campaign execution.
Smarter Tech = Smarter Promotions
Best-in-class retailers link their campaign calendars to planning systems to:
- Forecast promotion-driven demand both pre-season and in-season
- Adjust replenishment strategies in real time based on AI-based forecasts that learn from recent trends
- Prioritize allocation to stores/channels where demand outpaces supply to maximize conversion
AI-driven decision automation and cloud-native supply chain platforms make this integration more feasible and scalable than ever before.
Conclusion
Disconnected campaign planning leads to stock-outs, missed sales, and frustrated customers. Integrated planning ensures that every promotion isn’t just a marketing splash, but a strategic lever for profit.
In 2025 and beyond, fashion’s winners will be those who unite marketing sparkle with supply chain muscle.
