Shifting Focus from "Time to Market" to "Time to Consumer"

7/9/2013
The fashion industry is fueled by change, and in today's market where trends are short-lived and consumers are fickle, apparel organizations have two choices: keep up with consumer demands or throw in the towel. 

Inexpensive prices, combined with the omni-channel assault — add in social networking and you have now put the power to dictate the market into the hands of the consumer. In order to survive, businesses must react instantly to fashion shifts, stop looking for trends and start listening for buzz. They need to shift attention from "time to market" to "time to consumer," focusing on how to go from design, to production, to getting the product in the consumer's closet as quickly as possible.

The great power shift
Power has shifted over time from the textile supplier, to the manufacturer, to the brand owner, to the retailer, and now, to the consumer. But it wasn't until the market downturn a few years back that consumers began to truly understand the scope of their power and to take control. With fully stocked shelves and decreased consumer confidence, many retailers had no choice but to decrease their prices significantly – in many cases below cost.

Consumers quickly realized that if they waited, prices would drop – and if they waited even longer, a coveted item could be theirs for next to nothing. The retailer responded by simply ordering less, hoping that this would force the consumer to buy out of fear that the item would no longer be available. But, in an environment where there is so much sameness in design, consumers had to do little more than adjust their expectations slightly and move to the next logical choice.

At the same time, omni-channel availability was growing exponentially, providing consumers with instant access to product comparison data. Shopping became synonymous with research, and buying was seen as a commitment made only for the best version of a product at the very best price. It was this paradigm shift from seduction-by-product to seduction-by-price that led to a decrease in brand loyalty and the birth of a new generation of shoppers who are much more inclined to bypass their favorite brands in the event that a less expensive alternative is available. After all, fashion was becoming "disposable."

Now, challenged by a market dictated by consumers with increasingly fickle tastes who care more about the price of a product than the label attached to it, retailers are faced with the daunting task of delivering on customer expectations while also delivering on company profit expectations.

Listening and understanding what consumers want
The key to this success is achieving the right initial stock mix to meet demand, which can only be done by listening to customers and sharing information across the value chain. Starting with the initial design of a garment, customer feedback should be the primary consideration to increase the odds that a product will appeal to consumers.

A surfwear brand, for example, can set up its own online community where customers are able to interact and share details regarding the prints, colors and even fit that they prefer. By using the right CRM technology, this data can be analyzed and shared with the design team in real-time to provide direction.

However, even with this strategy, apparel organizations cannot necessarily have full confidence that products will fly off the shelves. Today's consumers want to develop their own unique style, and thanks to fast-fashion powerhouses, they're able to constantly update their core wardrobes without breaking the bank. What's popular one week may not be popular the next, and the only way for retailers to keep up is by constantly communicating with consumers and sharing the information across the value chain.

Collaborate, collaborate, collaborate!
In order for retailers to ensure that they are able to have the products that their customers want in their hands when they want them, without risking getting stuck with extra inventory, apparel industry supply chain partners need to collaborate closely in a demand-driven network.

Before the first garment hits the shelf, cross-functional teams must join forces. Designers need to work with the production and distribution teams to develop products that can be produced and customized rapidly to meet customer demand and allow for the quickest possible manufacturing to be achieved during replenishment. Only with pooled knowledge will the surfwear designer be able to take all of the accumulated observations and history and create better products that are suited to meet the needs of the entire value chain.

Create the right stock mix to meet demand
The entire value chain has to shift the focus from cutting production costs to meeting consumer requirements, as no matter how full a store's shelves may be, profits are only achieved once an item is in the consumer's hands.

One way to ensure that the items consumers want to buy are available when they want them is to develop methods for intelligent segmentation of products that allow manufacturers to fast-track trendy items that need to hit the shelves quickly, and develop strong replenishment logic, processes and systems that cut costs by using more efficient processes for basic products that their stores always carry and only refresh on a periodic basis.

Once products have been segmented, companies can determine the quantities to produce at any given time based on demand forecasting. All of this has to be supported by linking a lean retail environment to a lean supply network – a network that can replenish required inventories as they are needed. Consumer demand is the key – let it lead the way. Design, develop, and engineer products for efficient manufacturing. Listen to the consumer and collaborate with the supply chain.

To reduce risk associated with mass production of trendier items for which demand may be fleeting, companies need to implement systems where fulfillment is triggered by the requirement for replenishment– collaboration is key. In order to do so, they should begin by collaborating to produce a smaller percentage of the quantity of an item that they expect to sell.

The retailer and manufacturer have already established an ongoing and often real-time sharing of sales data. Then, as items are purchased, the retailer will push sales data back through the value chain to trigger the next round of replenishment.

When orders are pulled by the consumer, rather than pushed by the retailer, companies don't have to commit to selling a warehouse full of garments, drastically reducing the requirements for markdowns. This customer-centric method not only protects against large losses due to investment in items that prove to be unpopular, but also safeguards businesses against external factors that may impact sales, like a cold front in the middle of spring break season that leads to decreased demand for bathing suits.

Assisted by the right technology, brand owners, distributors, manufacturers and retailers can increase customer satisfaction, and in turn increase sales and profits, by changing focus from "time to market" to "time to consumer." Greater cross-departmental collaboration, from inventory control through product design and lifecycle management, takes business to the next level by developing desirable products more quickly, and putting them not just on their store shelves, but in the hands of their customers faster than competitors.

Bob McKee is global fashion industry strategy director for Infor.
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