Why fashion brands should obsess over sell-through rate in 2026

Conversion rate dominates dashboards, sales reports, and leadership meetings—but it only tells part of the story for DTC fashion brands. Sell-through rate shows whether your buying, pricing, and timing actually worked—and how much stock remains at the end of the season. It’s the metric that drives full-price sales, healthy margins, and sustainable growth.

Most brands aim for about 70% sell-through within a season, but many land closer to 40–50%. That gap highlights why tracking sell-through rate in fashion is so critical. 

In this post, we’ll break down why sell-through deserves the spotlight for every fashion brand and share how the most successful teams maximize it.

Sell-through > conversion: the math is mathing

Sell-through rate measures outcomes: whether inventory, pricing, and timing decisions actually matched demand. Even a strong conversion rate can’t compensate for inventory that isn’t selling. 

Paul Smith offers a clear example of how sell-through rate in fashion impacts real-world operations. The brand faced a familiar challenge: valuable inventory sat in stores while online shoppers faced stockouts. So the team piloted Ship-from-Store with Centra in September 2024 as a way to maximize inventory with clear demand. The team selected three stores with accurate stock data, broad inventory, and strong operational standards. 

The impact was immediate. During Black Friday that year, 20% of online orders were fulfilled from stores, driving 28% revenue growth and achieving 95% sell-through on Autumn/Winter ’24. Following this success, Ship-from-Store has been rolled out across Paul Smith’s entire retail network. 

STR will shape margins in 2026

In 2026, every fashion decision, from buying to pricing to drop cadence, should be informed by a brand’s target STR. Inventory costs are rising, return rates remain high, and sustainability expectations are increasing—leaving margins tighter than ever. A high full-price STR signals that buying and pricing decisions are landing correctly, allowing brands to move stock efficiently, protect margins, and react faster to shifts in demand.

1. Rising inventory costs

Inventory carrying costs jumped more than 13% year-over-year as supply chains absorbed higher tariffs, inflation, and restocking pressures. At the same time, global fashion growth is expected to stay under 5% annually through 2026, making operational efficiency more important than ever.

2. Returns are climbing

With return rates averaging around 28%, largely due to fit issues and lingering free-return customer behavior, every returned item eats into margins and complicates fashion inventory management and planning.

3. Sustainability mandates

Dead stock isn’t just a financial problem—it’s a reputational one. Shoppers, investors, and regulators are expecting brands to reduce waste, sell responsibly, and avoid deep markdowns that signal excess inventory. Industry estimates suggest that up to 30% of fashion stock never sells, even as resale is booming. The secondhand market is projected to reach $360B by 2030, growing 2–3x faster than new fashion. High full-price sell-through helps brands move inventory before it hits resale or becomes waste, creating a self-reinforcing cycle that maintains margins and reduces environmental impact.

4. Margin squeeze

Acquiring a new customer in fashion now costs $70–$95, and every product sold at a discount cuts into profits more than ever. A sell-through-focused strategy can be the difference between compounding profits and clearing leftover inventory at a loss.

Driving full-price sell-through

With these pressures in mind, brands must take proactive measures to ensure inventory sells efficiently. Here’s how the most successful teams do it:

Buy tight, test wide: Start with smaller initial runs and scale up based on actual demand. This reduces overstock while keeping inventory aligned with what shoppers actually want.

Controlled ‘drop’ cadences: Release products in measured waves to create urgency and prevent excess stock from piling up. Consider timing intervals based on seasonality or customer behavior—for example, weekly or bi-weekly drops during peak shopping periods, and smaller, monthly waves during off-peak times. This approach helps maintain excitement while giving inventory time to sell before the next release.

Community pre-orders: Use early signals from your customer base to guide production and ensure inventory matches real demand. Incentivize participation with perks such as early access, limited-edition items, or loyalty points. Integrate pre-order data directly into forecasting tools to refine production quantities, reducing risk of overstock while ensuring you meet actual demand.

Discount testing: Keep top-performing items at full price while only testing discounts on experimental SKUs to protect overall margins.

AI-powered forecasting: Leverage AI tools that can now predict size/color demand at 85%+ accuracy, enabling 'test wide, buy tight' at scale and cutting overproduction.

Real-time sell-through monitoring: Track inventory movement throughout the season to make proactive decisions—adjusting buys, production, or marketing before issues arise.

Unlocking full price potential

High sell-through isn’t just about tactics—it comes from aligning strategy, fashion inventory management, and operations. 

OSPREY LONDON demonstrates this approach. By connecting merchandising, content, and operations on a single platform, they were able to:

• Optimize inventory to match demand and reduce markdowns

• Align creative strategy with the products customers actually wanted

• Maintain a distinct full-price offering that reinforces their premium positioning

“Now we can offer a distinct product mix and content, we have a full-price offering that really works.”— Ben Jones, Head of Ecommerce, OSPREY LONDON 

Sell-through rate connects inventory decisions to real business outcomes. In 2026, brands that prioritize STR will move faster, protect margins, and build more resilient fashion operations—without relying on discounts to do the work.