The Fashion Retail Supply Chain is a Speed Game Now More Than Ever

Seasons come and seasons go. As do trends in fashion. Except that the trends in fashion are more dynamic. The market is perennially inconsistent as collaborations succeed or flop, new products emerge to replace the old, and social media channels make products go viral. 

Add to this the unpredictability of the Covid-19 pandemic and we have a pretty temperamental supply chain environment for fashion retail. While the top apparel and accessory brands agree that product quality should get better with time, inventory priorities are always fluctuating. Only a modern and digital supply chain that is ever-evolving can manage the product quality, inventory volume, and fashion supplier relationships that the industry requires.

An inconsistent period of recovery 

2020 and 2021 have been exceptionally difficult for global fashion retailers. For a brief period in 2021, it seemed like things were taking a turn for the better as pent-up demand brought customers back to stores. 

‘Revenge buying’—a trend that had grown popular in China earlier in the year was cropping up in the US too, with a renewed focus on luxury, return-to-work and occasion styles. Brands such as Kering and Hermes reported sales going up by 46% and 26% respectively in 2021. 

This pent-up demand did lead to growth spikes, especially in first-world markets where consumers were fully vaccinated, but the situation is far from normal. While a handful of leading brands are flourishing, many businesses are still struggling to get on their feet.

Check Out: Retail/FMCG Sales Beat Planning

Online shopping thrives 

The crisis has left an indelible mark on the fashion industry and the period of recovery is a rocky one, owing to these inequalities. A huge revenue is still created by the fashion industry, with online sales taking the lead. According to Statista, 26% of the total market revenue will be generated through online sales in the fashion segment by 2023 and the number of users in the apparel industry is expected to amount to 229.4 million by 2025. 

Fashion retail’s logistics deadlock

According to a McKinsey report, one in every eight businesses suffered supply shortages as a consequence of the pandemic in 2021. Staff unavailability,  material and component shortages, roadblocks, bottlenecks in transportation and high shipping costs, all contributed to this situation. The situation is better now but many of these challenges still persist and will make their way into the new year. 

As supply chain disruptions overstay their time, unexpected pressures on freights and port terminals, price hikes, new trade agreements and regulation compliances could all become the new logistical normal for the fashion industry.   

A recent example of this is the Suez Canal blockage, when a container ship was wedged in the canal, bringing freight movement to a halt and leading to delays in deliveries. The incident is a sign that businesses need to buckle up and work on fool-proof contingency plans. 

Customers today have become accustomed to speedy deliveries, and repeated delays can put off even loyal customers. The matters are further complicated by an increasing demand for sustainable sourcing, which puts more pressure on the supply chain. 

There is a need for a plan that sticks; one that is preferably long-term, and this means proper logistics planning, streamlining production and keeping alternative suppliers at the ready. 

A 3PL solution for the fashion supply chain

For businesses to not crumble, they will need to balance the demand for speedy deliveries with the need to ease the pressure on supply chains. Sharing the burden of enabling timely deliveries with a third-party logistics provider can help take some of the edge off. Advanced delivery optimization software providers such as Locus can help the fashion retail industry flourish even as it caters to fluctuating demands. 

Locus can amp up the fashion retail supply chain with the help of its automated dispatch planning software, DispatchIQ. This AI-enabled system executes daily and hourly order dispatching in no time, while making room for on-demand orders. Locus DispatchIQ also plays a vital role in enabling last-mile delivery. Logistics managers can thus plan shortest, quickest routes while keeping traffic, weather conditions and time-slot preferences in mind. 

Since fashion retail businesses receive innumerable orders throughout the day, they need to be mapped quickly and accurately for delivery persons to locate. Locus’ geocoder simplifies even the most complex addresses to put them on a map and quicken on-ground delivery operations. 

Locus TrackIQ, with its control tower and data analytics capabilities, can save time by analyzing metrics such as mileage performance and informing the customer as well as the provider of the Estimated Time of Arrival (ETAs).

A great way to future-proof the fast fashion and apparel supply chain is to increase operational efficiency by making use of optimized Permanent Journey Plans (PJP) and Permanent Dispatch Plans (PDP) with the help of Locus FieldIQ. FieldIQ plans periodic sales beat plans and territory plans for retail brands to enable timely and sufficient replenishment of stocks in distribution centers and retail outlets. 

Locus NodeIQ can create a ‘digital twin’ for the existing network design of the fashion supply chain to predict ‘what-if’ scenarios and prepare for contingencies to deal with future risks and supply chain uncertainties with agility.

The fashion industry is in a flux and the quicker businesses move with the changing winds, the more they will flourish. Advance logistics planning can help retailers keep their head above the water and tackle uncertainties better. 

Locus offers best-in-class logistics technology solutions to supply chain enterprises to improve last-mile deliveries. Get in touch with us for a quick tour of our solutions.

Sources:

https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion
https://www.gq.com/story/what-is-revenge-shopping
https://www2.deloitte.com/content/dam/Deloitte/at/Documents/consumer-business/at-global-powers-luxury-goods-2020.pdf
https://www.statista.com/outlook/dmo/ecommerce/fashion/united-states

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