Designing & Wholesaling: The New Retail

It's getting harder to categorize fashion companies in a world where retailers are sourcing, vertical brands are moving into wholesale and retail, and virtually everyone is selling online. Read through the below Q&A to learn how paradigm shifts are driving new operational and technological requirements.

Q. How do you see some fashion retailers and manufacturers breaking out of their traditional roles, developing new capabilities and trying new business models? What are some factors driving this evolution?

A. That’s a very good question. We’ve been noticing a blurring of lines between business models and distribution channels. Not only are we seeing brand manufacturers and wholesalers getting into the retail space with brick-and-mortar and e-commerce offerings, but quite often, we’re seeing the other side of the coin. Retailers are venturing into wholesale via stores-within-stores or concessions partnerships, as well as designing their own private labels. The interesting end result is achievement of vertical integration with synchronization of operations across the entire supply chain — from product development to omni-channel retail.

The factors driving this evolution include a need to increase revenue, margin, brand image and quality. More importantly, it’s the rise of the connected shopper, empowered with tremendous amounts of information that has dramatically transformed the fashion industry. With the proliferation of consumer technology, fashion companies are confronted with an unprecedented change in consumer demand. Shoppers are now used to relying on technology and digital devices to simplify their lives. They want a seamless customer experience, one that allows them to purchase products whenever and wherever they want.

Q. What technology and operational changes are needed to support new roles taken on by these different types of fashion businesses? 

A. To compete in today’s omni-channel world, retailers have to integrate their operations and processes throughout the supply chain. The reality is that a significant number of companies have disconnected operations. Their infrastructure and systems were not built to address evolving customer expectations and the multitude of customer touch points that exist today. What do retailers need? Enterprise-wide information accessibility, which can be achieved by breaking down the silos between product development, sourcing, manufacturing, merchandising and distribution.

As with any initiative of this scale, it’s necessary to have organizational alignment — across systems, employees and partners. This means embracing structural change, creating an integrated technology platform, improving customer analytics and optimizing supply chain operations. C-level executives need to support this type of transformation if they are to have any chance of ensuring true integration between business units (e.g. manufacturing, wholesale, retail and eCommerce). With the right technology in place, fashion companies can respond in real-time to market shifts, enabling more demand-driven business processes, profitability and, above all, customer satisfaction.

Q. How does the concept of the “endless aisle” apply more than ever to fashion companies active in omni-channel commerce? 

A. When they shop, customers don’t think in terms of channels, platforms or devices. They only think about satisfying their needs in the most convenient manner. They want endless aisle capabilities where they can order an item irrespective of where it’s physically located. They also want to be recognized regardless of the channel they shop and expect retailers to fulfill from anywhere (warehouse, store or vendor), facilitate in-store pick-up of web orders and support returns anywhere (warehouse, stores). To keep pace, fashion brands need to synchronize their demand and supply chain by leveraging the right technology, one that allows them to share a global inventory and provide flexible distribution and fulfillment options. It’s also necessary to have a centralized data repository to enable a single view of the customer. Put simply, endless aisle makes omni-channel commerce possible. It unifies inventory across channels and enables associates to match every customer request with available stock.

What’s your take on these questions? Please share your thoughts. 

This Q&A originally appeared in Apparel Magazine featuring Jesta I.S., EKN Research and Retail Process Engineering (RPE). To access the entire report, go to Designing and Wholesaling: the New Retail