Perfect Stock Mix, Always – Achieving Online Fashion Retail Nirvana
The retail fashion business may have had a major make-over in the past decade but every retailer and every brand accepts the current wholesale model is flawed. Buying in advance and limited to a small subset of a brand’s range, even with the use of increasingly sophisticated analytics in this fickle fashion market it is generally accepted that buying decisions rarely align with all the brand’s most successful products. The truth is that no one is getting a good deal. In a market increasingly dominated by the quality of the overall customer experience, from personalisation to delivery, no retailer wants to risk losing control over the supply chain; but surely in this highly integrated global market with reliable, low cost logistics, there has to be a better way? Despite the huge advances in forecasting tools and the sophistication of retail buyers, right now online retailers continue to present a suboptimal stock mix to the end consumer. Restricted by both budget and warehouse space to just a fraction of each brand’s product range, a buyer can hope to hold only a small fraction of the products from any brand in any one season. And the fraction they do hold is never 100% right. The problem is that, to date, despite massive technical innovation, there hasn’t been any better approach. Whilst it is clearly possible to allow brands to link up with a retailer’s website, the risk to customer experience is simply too great. Having invested hugely in everything from photographic style to delivery pledges, no retailer is going to jeopardise that customer experience at any price. Without a way of gaining access to these brands in a controlled fashion that enables the retailer to guarantee every aspect of the experience, the old model will persist, however frustrating. But what if a retailer could guarantee that a brand would meet its specific Service Level Agreements (SLA)? With tight integration between every aspect of both the brand’s and the retailer’s operations – from ERP to creative, dispatch to returns – it is possible to replicate that essential, standardised customer experience. From picker to packer, designer to supply chain manager, the brand’s essential day to day processes remain unchanged, they are simply automatically tailored to the specific needs of each retailer. The implications are extraordinary – for retailer, brand and customer. With no budget or warehouse constraints, a buyer can radically expand the range available from each brand and use real time analytics – such as a brand’s top 100 selling products – to refine, expand or reduce the range at will. The brand can ensure top products are being sold by the leading retailers – and customers can be confident those products are available, reinforcing both brand value and customer experience. This model has been enabled by the evolution in global logistics, which now makes both national and international product distribution both low cost and rapid. When a product can be shipped from the UK to a customer in Australia for £6 within 72 hours, global expansion is suddenly a very compelling proposition. However, this is not about presenting customers with all the stock, all the time. The buyers still need to use their experience and customer insight to refine the offer, to present the right stock mix at the right time to the right customer. And brands need to ensure they are working with the right retailers in each market to reinforce their essential brand value. The essential aspect of this model is that by creating an environment where the customer experience is guaranteed, irrespective of the point of fulfilment, a retailer can truly move towards nirvana: the perfect stock mix, all the time. The old wholesale model may have persisted for centuries but it is time for change. Both fashion retailers and brands alike now have the potential to exploit this real-time, global network to collaborate, innovate and be creative in order to deliver the perfect, personalised product mix for customers that drives up engagement, market perception and profitability.