Fashion is fast to stay ‘on trend’

Zara, the retail fash­ion brand of Span­ish multi­na­tion­al cloth­ing com­pa­ny Indi­tex, arguably intro­duced the con­cept of “fast fash­ion” with its goal to close­ly cou­ple trends and cus­tomer demand. This enables Zara to man­age greater prod­uct vari­ety over short lead times and intro­duce tens of thou­sands of new items a year com­pared to the 4,000 or so items of some of its com­peti­tors.

Post­ing 16 per cent growth in the group’s turnover last year, Indi­tex chair­man Pablo Isla recog­nised the impor­tance of sup­ply chain and logis­tics invest­ment for greater busi­ness agili­ty. In its annu­al report, Mr Isla high­lights work to launch a ninth logis­tics plat­form for Zara and Zara Home this year, as well as a new logis­tics cen­tre for its brand that he says could be con­sid­ered “to be at the fore­front of tech­nol­o­gy applied to this area”.

Neil Saun­ders, man­ag­ing direc­tor of retail con­sul­tan­cy Con­lu­mi­no, says: “Ver­ti­cal­ly inte­grat­ing the man­u­fac­tur­ing process into the retail busi­ness, as Zara has done, allows max­i­mum con­trol to be exert­ed over the sup­ply chain.” But this is only suit­ed to large-scale busi­ness­es. “Zara makes prod­ucts in bulk, but quick­ly switch­es from one design to anoth­er,” he adds. “This means there is flex­i­bil­i­ty to adapt to fash­ion trends. It also means that the stock turnover in Zara’s stores is fast and there is always some­thing new to see.”

The suc­cess of the Indi­tex mod­el has per­me­at­ed the rest of the fash­ion retail indus­try, helped in no small part by the explo­sive growth of online shop­ping, adding to the need for speed and agili­ty expect­ed of cus­tomers for their offer­ings to be “on trend”. “Giv­en that fash­ion is a fast-mov­ing mar­ket sub­ject to very rapid change, hav­ing an agile sup­ply chain is a dis­tinct advan­tage as it allows a retail­er to bring ‘hot’ prod­ucts to mar­ket quick­ly and cap­i­talise on demand,” says Mr Saun­ders.

Accord­ing to Save­rio Romeo, prin­ci­pal ana­lyst at tech­nol­o­gy con­sul­tan­cy Beecham Research and author of the recent­ly pub­lished Future of Fash­ion Retail: “Agili­ty in this sec­tor means respon­sive­ness and stay­ing close to con­sumers’ chang­ing shop­ping modes in a sce­nario where chan­nels are mor­ph­ing due to the increas­ing and diverse use of dig­i­tal tech­nolo­gies.”

Hav­ing an agile sup­ply chain is a dis­tinct advan­tage as it allows a retail­er to bring ‘hot’ prod­ucts to mar­ket quick­ly and cap­i­talise on demand

But achiev­ing agili­ty requires a num­ber of oper­a­tional com­po­nents. “The first one revolves around data from con­sumers, online and phys­i­cal stores, and from var­i­ous steps in the sup­ply chain,” says Mr Romeo. This data is a crit­i­cal source of infor­ma­tion in order to take rapid and informed deci­sions, which feeds the sec­ond most impor­tant agile require­ment – insight. But he adds that insight is not pos­si­ble with­out the infor­ma­tion that comes from bet­ter inte­gra­tion across the var­i­ous busi­ness oper­a­tions, from prod­uct man­u­fac­tur­ing to logis­tics, from store oper­a­tions to rela­tion­ships with con­sumers, and the man­age­ment of the var­i­ous chan­nels.

A mixed sourc­ing strat­e­gy, between local and inter­na­tion­al as well as in-house and third-par­ty man­u­fac­tur­ing, is becom­ing increas­ing­ly impor­tant for fash­ion retail­ers look­ing to achieve agili­ty as they expand both online and in over­seas mar­kets, accord­ing to Steve Davis, retail con­sult­ing vice pres­i­dent at sup­ply chain soft­ware and ser­vices com­pa­ny JDA. “Top Shop, for instance, is now sourc­ing goods from local man­u­fac­tur­ers in order to bring in the lat­est designs more quick­ly,” he says. “If fash­ion retail­ers are to achieve agili­ty, they need com­plete vis­i­bil­i­ty of where inven­to­ry is at, in any point in the sup­ply chain, so they can bet­ter under­stand lead times. Key to deliv­er­ing this suc­cess­ful­ly is ensur­ing that your peo­ple, process­es and tech­nol­o­gy are all work­ing in har­mo­ny.”

CASE STUDY

ONLINE AND READY TO GO

A home-grown fash­ion suc­cess sto­ry, embrac­ing both agile tech­nol­o­gy devel­op­ment and inte­grat­ed oper­a­tional process­es, is the NET-A-PORTER GROUP.

BACKGROUND

NET-A-PORTER has grown from hum­ble begin­nings in a Chelsea flat 14 years ago to a lead­ing inter­na­tion­al lux­u­ry fash­ion retail­er. Found­ed by exec­u­tive chair­man Natal­ie Massenet, it has tak­en agile work­ing method­olo­gies into the heart of its sup­ply chain oper­a­tions in pur­suit of its goal to become “the world’s pre­mier online lux­u­ry fash­ion des­ti­na­tion”.

RATIONALE

Hav­ing a pre­dom­i­nant­ly dig­i­tal pres­ence, Rachel Cart­mail, head of busi­ness change at the NET-A-PORTER GROUP, says agili­ty is part of the company’s DNA: “It is of para­mount impor­tance to us that we have con­tin­u­ous deliv­ery and inno­va­tion at the heart of every­thing we do,” she says.

METHODS

The need to scale its grow­ing dig­i­tal and sup­ply chain oper­a­tions led the com­pa­ny to adopt agile project man­age­ment meth­ods and the JIRA soft­ware project. It uses track­ing soft­ware tools to man­age projects, qual­i­ty assur­ance and com­pli­ance as well as effi­cient­ly track work­loads. It has also adopt­ed “scrum” as an iter­a­tive and incre­men­tal agile soft­ware devel­op­ment frame­work for man­ag­ing prod­uct and appli­ca­tion devel­op­ment, and ser­vice-ori­ent­ed archi­tec­ture as a way to decou­ple IT archi­tec­ture from its process­es.

BENEFITS

David Lowe, agile project man­ag­er at the NET-A-PORTER GROUP, says embrac­ing agili­ty in both cul­tur­al and method­olog­i­cal terms has sup­port­ed suc­cess­ful growth. “Scrum was a frame­work that enables dif­fer­ent teams to tai­lor their ways of work­ing to dif­fer­ent require­ments,” he says. Cross-func­tion­al teams work togeth­er in a way where all bar­ri­ers to suc­cess are removed.

RESULTS

The inven­to­ry man­age­ment sys­tems devel­oped and main­tained by NET-A-PORTER enable its buy­ers, plan­ners and mer­chan­dis­ers to make sure the right prod­uct is avail­able for its cus­tomer at the right time. “Hav­ing reg­u­lar deliv­ery, which is one of the core val­ues of agile, means that we can focus on what­ev­er is of the high­est pri­or­i­ty or of great­est val­ue to the busi­ness,” says Mr Lowe. “And then it’s also, of course, key to get­ting feed­back from cus­tomers, which helps us make sure we are work­ing on the most impor­tant things.”