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The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

The Secret Journey of a Fashion Piece — Part 3: Logistics and Supply Chain

  • Lauren Sherman

NEW YORK, United States — A customer browses the racks of her favourite store, pausing now and again to peek at a label or a price tag. Eventually, she finds something — or a few things — she likes and heads to a dressing room. Not everything works. A pencil skirt is too roomy in the hips; the colour of a shift dress is less than flattering. But an oversized leather bomber jacket fits flawlessly. She heads to the register, pulls out her credit card and leaves with a beautifully packaged purchase.

This marks the end of a garment’s journey from conception to runway to factory to sales floor. Indeed, this single moment is the fruition of months of design, development and production. But, today, the final leg of the journey — transporting a product from factory to store — is more important than ever and the focus of no small degree of technical innovation. Increasingly, it’s not just about tracking physical garments as they make their way to retail, but tracking and harnessing the data associated with these garments.

To be sure, many emerging labels still handle logistics in the same way their predecessors did two decades ago. For a small brand that produces locally, the chances are that pieces are simply messengered to the designer’s studio, where the team assembles the packages and ships them directly to private clients and retailers.

For larger brands, it is more common to rent space in a warehouse, where items are shipped in from factories by air, truck or boat, then “picked and packed.” In the “pick and pack” process, workers unload the goods, identify each garment by barcode, determine the retailer for which it is destined and repack the piece to be sent out. In the years since the 'Great Recession,' larger retailers have begun charging fashion labels fees if their garments are not packaged exactly as requested, so brands must make sure their warehouse follows procedure.

"Shipping and logistics can take a month, if not longer," said Vickie See, a partner at New York-based label Tess Giberson, who also consults on product development for clients including Burberry, Theory, Rag & Bone and Coach. "From the moment it hits your warehouse, you want it out the door as soon as possible. The earlier it gets in the store, the longer the selling period. Any delays caused by logistics can disrupt the entire season."

Quiet Logistics, a Massachusetts-based company, is one firm aiming to streamline the process, utilising Kiva robots to efficiently pick and pack products for clients including fast-fashion chains and fashion e-commerce start-ups. But Inditex, the owner of Zara and Massimo Dutti, which is able to deliver fresh product to its stores twice a week in response to real-time demand signals, is the undisputed fashion and apparel industry leader in terms of supply chain management.

“The truth is, a lot of people have chased Zara’s model and virtually nobody has been able to replicate it,” said Josh Green, CEO of Panjiva, a New York-based company that connects brands with overseas suppliers. “Zara is collecting data in stores that is immediately fed back to its system, which is what allows it to be so responsive. If you’re not vertically integrated, you’re not going to be able to deliver Zara-type flexibility.”

In many cases, a third-party retailers own the relationship with the consumer and the data generated by these interactions is critical to brands. "Designers on the catwalk are most interested in sell-through," said Marcia Lazar, founder of Zedonk, a London-based provider of business software that helps designers including Christopher Kane, Altuzarra, Victoria Beckham and Peter Pilotto manage their product pipelines from concept to sale. "It's important to know what's selling well at Neiman Marcus or Harvey Nichols. And if they used a fabric that the whole world hates, then they need to know that too."

Currently, many designers receive this kind of feedback from retailers via email, phone or semi-automated technology systems. But with the implementation of tracking technology, such as RFID (Radio Frequency Identification) tags, product data can be fed directly into a designer’s own business management software. While RFID isn’t new, it’s usage is growing rapidly. Research firm IDTechEx forecasts that the global RFID market will reach $8.89 billion in 2014, up from $7.77 billion in 2013 and $6.96 billion in 2012. Major companies like Walmart have been using RFID tags for more than a decade, Bloomingdale’s began embedding the tags in garments about five years ago and more and more retailers are following suit.

Emerging ready-to-wear brands can’t typically afford to add their own tracking tags to garments, but department stores who do use such devices are often able to report back on customer behavior, which, in turn, helps to inform late-season orders. For instance, if a retailer is unexpectedly selling out of a sweater style, the RFID tag will report that information directly to a brand’s business management software. The system instantly registers this and advises the brand to order more of the sweater from its suppliers. And if sweaters are an unexpectedly big category for a designer in a particular season, he or she may decided to offer more options the next time around, potentially changing the course of the brand.

For brands with sizable e-commerce businesses, tracking tags and business management software like Zedonk also help to fulfil orders across channels, by facilitating services like in-store pickup. And as more brands start keeping less inventory on the floor, this kind of tracking allows shop clerks to be able to quickly identify what is available online — or in another physical store location — in a more seamless fashion. Brands including Burberry and Matches already employ iPads in store to help customers shop for items that may not be available in a particular store.

New technology is also helping brands glean insights into consumer behaviour by monitoring how they interact with products on the shop floor. “It’s interesting to see how a customer acts while she’s in a store space, how much time she is spending there and what she’s drawn to,” said See. “Tess Giberson doesn’t yet have the scale to implement that sort of tech for our own store. But department stores are setting the standard, so someday we’ll have to.”

Indeed, high fashion labels may set sartorial trends, but it is major retailers that are driving the growth of data collection around product inventory. That aforementioned bomber jacket might now be out of the retailer’s hands and on a customer’s back, but its purchase has generated a stream of data that a store or brand can tap for seasons to come. In this sense, even once it has been bought, the journey of a fashion piece is far from over.

This article is supported by Lectra, the world leader in integrated technology solutions that automate, streamline and accelerate product design, development and manufacturing processes for industries using soft materials. To help companies transform and support change management, Lectra brings the most inspiring insights and best-practice solutions, based on more than 40 years of expertise in fashion and apparel.

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