For Apparel & Fashion Retailers, the Future Rests on Actionable Data
By Retail Today
The following article was written by Paul Magel, President - Business Applications Division, CGS, and published as part of Retail Today's State of the Apparel & Fashion Industry 2023.
For retailers in the apparel and fashion industry, 2023 will be an opportunity to be proactive as opposed to simply reacting to the challenges and uncertainties of the supply chain. Many learned from the pent-up demand for goods that caused buyers to overbuy. Looking back on this period, it was perfectly reasonable for these retailers to fear being caught short with too little inventory but as demand normalized they found themselves holding way too much inventory, which often consisted of items their consumers were not interested in. Today, from those affected we’re hearing a refrain of “not again.” What’s become clear is, to avoid another, similar cycle, retailers are looking more critically at their investments in technology to take the guesswork out of these critical decisions and fluctuating cycles. The need for valuable data is driving a willingness to adopt the right technology - not technology for technology’s sake. Historically, the apparel and fashion industry focused on the past to predict the future; such trends, about what people bought, would be instrumental in forming an inventory strategy for a business that no longer has traditional seasons. As a result, the industry does not rely on so-called seasons or collections but instead needs to react in real-time to patterns that help them predict what needs to be produced. This approach is now being upended with an emphasis on finding patterns in that current data and taking action on what is extrapolated. Historically, the apparel and fashion industry focused on the past to predict the future. This approach is now being upended. Retailers and brands need to react in real-time to patterns that help them predict what needs to be produced.To accomplish this, a wide variety of solutions are being considered from artificial intelligence (AI), and machine learning (ML), to planning tools. Having moved past the preconceived notions about what data portends, forward-thinking companies are also investing in technology departments staffed with data scientists. These teams have the expertise to analyze the collected data in a way that will help their companies be more efficient across the supply chain.
Driven by clarity in purpose, retailers realize the need to digitize their supply chain in order to provide more visibility and agility to quickly respond to issues affecting suppliers that will impact their inventories. Beyond the need for AI and ML are planning systems that interpret the demand data. Compared with older, cumbersome, and often costly implementations, the future is about smaller but continuous increments of change that are deployed faster, and offer a quicker return on investment. In 2023, flexibility will be the key for the apparel and fashion industry because what worked yesterday is not necessarily what will work today and tomorrow. Increased visibility is enabling informed decision-making that’s improving operational efficiencies, effective and profitable inventory allocation, and a greater understanding of critical sales and market drivers to as many channels as possible. One such example is the shift towards nearshoring in order to produce goods closer to the markets they serve and therefore streamline the logistics and shorten lead times. By collaborating on this approach retailers and suppliers are forging more efficient and transparent relationships. While challenges will persist, preparedness will improve the ability to navigate everything from labor shortages to visibility of the supply chain, as well as sustainability, and compliance. CGS BlueCherry is optimistic about the emphasis placed on innovation across the apparel and fashion industry. In particular, suppliers on the back end, which retailers rely so heavily upon, understand that adopting technology, as a normal course of business operations, aligns directly with stronger partnerships, competitiveness, and growth.