David McCorquodale, head of retail at KPMG, once referred to Christmas as “a true bellwether of consumer confidence". The autumn and winter trading period can be incredibly lucrative for garment retailers as seasonal shoppers search for new party outfits and Christmas gifts, and a flexible supply chain strategy can act as a big competitive differentiator.
Time is of the essence
In 2014, Retail Gazette discovered that one third of British consumers had already started their festive shopping in early October (nearly 100 days before Christmas Day) following research by Shoppercentric.
Doug Pasquale, senior vice president of supply chain management for Ingram Micro Mobility suggested in an interview with Apparel magazine that retailers prepare well in advance for the peak shopping season, setting a dedicated holiday supply chain strategy in place at least six months before the holidays.
The Christmas countdown puts huge amounts of pressure on retail supply chains, as last-minute rushes leave little room for error between manufacturers, suppliers and transport providers. A delay of just 24 hours can make all the difference close to the run up to Christmas Day, and failures to meet consumer expectations can mean a drop in turnover as well as company reputation.
Omni-channel shopping is still on the increase, as smartphones become an increasingly common tool in the retail supply chain. As a result, new research predicts that retailers should expect to see their supply chains put to the test in the Christmas countdown.
A recent study from eCommerce agency Ampersand claimed that modern UK retailers need a transactional mobile site, an omni-channel shopping cart, express delivery options and free easy returns policies in order to please their customers. Each of these services is becoming more commonplace among high street retailers, but all make strict supply chain management a necessity.
In order to manage an omni-channel Christmas, garment retailers need a clear and comprehensive view of their entire inventory across all store and warehouse locations. Timely communication is critical for retailers to work effectively alongside suppliers and manufacturers.
Holiday supply chain disruptions are always a possibility as extreme weather patterns hit and customer demand spikes, and this can spell disaster for retailers who can’t properly manage their inventories. While it's impossible to predict everything that might affect demand levels, retailers should aim to exercise a high level of supply chain flexibility and control.
Retailers with rigid supply chains are unable to react quickly to unexpected events, alter supply levels or move deliveries, and consequently risk losing out on the Christmas rush. What’s more, a bad business reputation can follow a fashion brand well beyond Christmas, making it difficult for them to recover their customer base the following year.
Delivering on customer convenience
Michael Kliger, Managing Director EMEA, eBay Enterprise, explained to Retail Gazette that hybrid fulfilment models can benefit shoppers and retailers alike, dispersing the pressure of meeting Christmas deliveries across the entire retail network, and setting brands apart from their high street competitors.
Click-and-collect and ship-from-store services can complement more traditional in-store purchasing and centralised delivery services, improving customer satisfaction and market competitiveness. However, this kind of flexible approach requires a highly controlled supply chain strategy to monitor the movement of products between multiple locations.
Post-Christmas returns can also bring a peak in footfall for bricks–and-mortar stores, and create a prime opportunity for new sales, but retailers must have systems in place to handle these transactions efficiently to stand any chance of impressing their customers. Returns effectively form part of the retail supply chain and must fit into a fashion brand’s business model in order for the stock to be processed.
How Segura can help
Pasquale suggests that apparel retailers should err on the side of caution when it comes to supply chain management over Christmas. “Continuously communicate with manufacturers, suppliers and logistics partners to avoid dreaded supply shortages”, he suggests.
Our innovative supply chain technology makes it simple to place and monitor orders of garment trims and packaging, tracking the secondary supply chain in real time and alerting the retailer to any unauthorised sourcing or shipping delays.
Originally Published 11/07/2015