Being in the apparel industry for almost three decades, I have experienced contradictions in different realms of merchandise sourcing. Or I must add that the inherent contradictions are part of the merchandise sourcing ecosystem.
Though the industry has been on a perpetual evolution mode, the contradictions also continue to evolve and be there in different spheres, forms, shapes and types.
Of late, these are becoming more pronounced as concepts like Responsible Sourcing, Sustainability, Circular Fashion, Slow Fashion, Speed to Market, Fashion Psychology are being discussed more than ever. To top it all, the ever-evolving consumer awareness is forcing every retailer to strike the right balance when faced with a contradictory situation.
We, as an industry, need to continuously strive to find the best option to overcome the challenges. In this feature, I have identified few of the major contradictions and the possible dynamic solution(s).
Whenever such contradictions arise and the industry experiences dilemma, the financial impact and the brand/organisation’s goodwill influence the decision making. As things keep changing, a balanced approach is always the best solution. There is always a middle path to tread.
Volatile Demand versus Sales Forecasting Model
Consumers’ needs and aspirations are as dynamic as they can be. In such a VUCA world, the retail industry plans the merchandise assortment 6-9 months in advance. There is no forecasting tool which can arrive at a precise demand in a volatile situation.
While conventionally, the empirical data drives the future, yet the retailers expect the merchandise to be relevant for the future launch. So, what is the success mantra?
Classifying the market into as smaller segments as possible, understanding the regional trends, taking note of the micro-occasions, the sensitivities around the regional culture and deciphering the psychology of consumers shall always assist in mining the past data and making it more credible for the future season.
Retailers are doing all the above and more, but the market and customer base is so wide, disparate and ever-expanding, that it will be right to say, ‘There Is No Goal Post’. In the fashion pyramid, consumers are moving from unorganised to organised retail, organised to hypermarkets, hypermarkets to value, value to mid-premium, mid-premium to premium, super-premium… the segmentation and analysis keeps changing and is a continuous process.
The finer segmentation reduces the volatility which in-turn increases the merchandise relevance season after season.
Shorter Lead Times versus Conventional ‘Concept to Consumer’ Critical Path
Retail concepts are vying to shorten the lead time for merchandise sourcing while not addressing the process constraints and people limitations.
While efficiency management through various concepts and tools removes the process constraints, the poor adoption of technology keeps the merchandise sourcing people-centric. The more it is people-driven, the higher is the lead time. Tech adoption and more importantly tech adoption by the people not just reduces the critical path, but makes it more transparent, resilient and agile.
Continuous Improvement of Business Processes, Product Lifecycle Management through Real-time Tech Solutions would enable not just shorter lead times but a higher speed to market too.
Make More-Sell More versus Sustainability
The most recent addition to the contradictions and probably the biggest… every retailer wants to ‘Make More-Sell More’ and still talk about Sustainability.
We all know the ‘contribution’ of textiles and garments to the global trash with a fraction of that undergoing recycling. While the issue is massive and requires solution from all quarters, yet we opt to look towards ‘Fast Fashion’ making consumers ‘Buy Often-Buy More’ with negligible focus towards upcycling and circular consumption.
The entire ecosystem demands affirmative action from all the stakeholders including consumers and retailers. Concepts like Pre-loved Clothes, Slow Fashion, Long-lasting Merchandise etc., are all at a gestational stage with nothing meaningful being done to give life to these big terms.
Speed to Market versus (Lack of) Strategic Vendor Partners
A programmed merchandise buy normally requires 60-120 days. Due to the lack of strategic vendor partners, the wheel needs to be re-invented every season thereby defeating the very purpose of ‘Speed to Market’.
Largely, the relationship between the retailers and the vendors has remained tactical. The business commitment is there for a season and changes periodically, sometimes as much, like a sine wave.
With poor alignment on the mutual business proposition, no efforts to create and expand the ZOPA, the business association is always catering to the current needs and hence is as fragile as it could be.
Every retailer, every season yearns for ‘Speed to Market’ but lacks the will to engage vendors with a long-term vision. The solution lies in forging alliances – underwriting capacities, knowledge sharing, design co-creation and above all creating common key value propositions.
The returns on the ‘non-tangible’ investments get realised when the vendor alliance transforms from tactical to strategic.
Responsible Sourcing versus (Less) Cost of Merchandise Sourcing
The retail ecosystem with a perpetual competition for a bigger market share, calls for reduced cost of merchandise sourcing. The contradictory facet here is the ‘Responsible Merchandise Sourcing’.
Be it social, health and safety or restricted chemicals or organic and natural fibres or conservation of natural resources or bio-degradable packaging or environmental considerations, compliance to all of this and more is Responsible Sourcing.
While every retailer intends to pursue Responsible Sourcing, the impact of the above on the product cost makes it prohibitive for the retailers to adopt all or some of the affirmative actions in this direction. In this recent addition to the contradictions in apparel sourcing, a long-term alliance between the stakeholders-vendors and the retailers, agreeing on not just the direct and indirect costs but also the tangible and intangible gains, is the step in the right direction.
Until and unless the retailers and manufacturers step into each other’s shoes, bring in a high degree of transparency and trust, the transactional relationship will continue and the contradictions in apparel sourcing will continue to emerge with varying challenges. Be it any contradiction, a strategic alliance between brands/retailers and manufacturers and the key aspect to create common value propositions (CVPs) always work to diminish the impact of any of the contradictions.
