See it now, buy it now or it won’t be a chance.
Perhaps, wanting to “see now – buy now” goes far beyond a need for instant gratification: in the temporary world of fast fashion -and now ultra fast fashion- the message is to buy now, because when it’s gone, it’s gone. That’s what can be concluded from the Accenture Report, so we are looking at a system that can help fashion brands to improve margins by working without stock, or lowering prices to liquidate surpluses.
While all fashion retailers maintain a number of basic or seasonal lines that are replenished periodically and follow traditional production cycles of six months or more, the thrill is in injecting trends, with high-rotation styles and short production cycles that capture the feeling of the moment.
Before further discussing the See Now Buy Now report and its findings, I recommend that you read these two previous articles on Accenture’s groundbreaking report: See Now – Buy Now and The DNA of Fast Fashion.
Trial sales of new styles – either on the internet or in selected shops – in order to assess the reaction of customers to the new fast fashion models on offer is a well-established practice today. Typically, the test output is 200 to 300 units of the model and if the response is positive the brand orders the larger production.
Fast Fashion needs a very fast provisioning model to maintain supply while the model is at the peak of its appeal. To meet consumer expectations, fast fashion must not only be fast but also offer a good quality product, at a competitive price. These conditions generate a differentiation between the production in proximity, which is faster, versatile and with a very short transport time and the preoduction in Asia with more competitive purchase prices.
Optimizing the business structure and improving decision making can help, but flexible sourcing strategies are also necessary. It is an issue that concerns many of the directors who have been interviewed by Accenture, not only in terms of speed to market but also in terms of sustainability and CSR issues.
The dilemma of the textile industry.
The CEO of a chain of an Australian fashion chain explains it clearly:
“So far, we have been sourcing from low-wage countries but there are not many more countries with lower wage rates. The biggest dilemma today is rising costs. We will have to find a way to offer more value to customers instead of reducing supply chain costs.
We have already discussed this important topic in this article: The Dilemma of the Textile Industry.
Differentiated speed systems.
Depending on the speed to market, we can classify them into:
Rapid replenishment: is the quick response to inventory shortages of top-selling items from season to season. These products often exceed expectations at a faster pace.
Sales testing on sample production: a structured and practical system for safely ordering the production of new models.
Reading, interpreting and reacting: a reactive approach to respond to seasonal trends.
Trend injection: rapid design and development of trend productions.
Asia and proximity.
Instead of relying exclusively on Asia, which includes air transport, Turkey and Eastern Europe are becoming Europe’s preferred sources of supply for fast fashion.
The CEO of a fashion brand in the UK confirms this with his comments: “In Turkey and Romania we order and receive the goods in four weeks; prices are not so different from China. Turkey is a very competitive production source and we have long-term relationships with suppliers.
Balancing production costs with the need to reduce shipping times were some of the main objectives listed by 63% of senior managers surveyed by Accenture.
In addition to near-shore production, production cycles can be shortened with flexible fabric finishing, using two or more suppliers to divide manufacturing and reduce overall production time or, more importantly, maintaining good relations with suppliers and key raw material producers to ensure “priority customer” status, so that orders are prioritized in the production chain.
Strategic partnerships with suppliers.
Instead of working with a large supplier base, several of the managers interviewed are seeking to rationalize the number of producers they use to build closer relationships with a core group. It is important to note that 30% of the CEOs surveyed also describe the development of strategic partnerships with these suppliers as a key factor in improving speed to market. With greater collaboration and trust, such strategic partnerships can provide mutual benefits by sending basic models to factories where they have idle capacity, for example, or by developing direct store delivery systems.
The omnichannel and speed of delivery.
While retail brands can cut down on time with faster decision making and closer production, for “see now – buy now” shoppers, the latest challenge against time comes in the delivery of the new digital customer’s online purchases. Impatience is the hallmark of the post-millennial young people of Generation Z, 18-20 year-olds, who typically adopt a “I want it and I want it now” approach. Polls show that up to 1 in 5 would choose same day shipping and another 13% want shipping to be done in less than half a day. The older millennials, 21 to 37 year-olds, are a little more relaxed and almost a third of them are happy that their order arrives the next day.
The speed of satisfaction is a challenge for retailers where online orders with in-store pickup are often only available the next day. Nearly two-thirds of the senior managers surveyed expected their costs to increase as customers demand faster delivery and more than half of them (58%) also believe that buyers do not want to pay the full economic cost of home delivery.
This is what one of the people in charge of a department store in the UK tells us about it: “Before, it was all about the service in the store, the product and the price; now the overall customer experience, the delivery offer is all about this and it contributes to the value. You can see the customers trying to decide… whether the time and cost of delivery offers value or not.”
In e-commerce selling is very important and is surely the main objective of your teams but let’s not lose sight of the fact that the closing of a rewarding experience for our customer is in keeping our promise of delivery. The whole added value depends on it.
In the next article we will continue with the analysis of this interesting report from Accenture – See Now Buy Now.
It’s a pleasure to be in touch with all of you!