In the ever-changing world of the fashion industry, data is the lifeline that drives decision-making, strategy development and ultimately success. However, there is a common misconception that the data in this industry is ‘bad’. It’s not about bad data, but rather the complexity that presents specific challenges. In this blog post, we will dive into the intricacies of working with data in the fashion industry and how Chainbalance has developed a perfect way to help our customers trust their data.
What makes data in fashion so complex?
When we talk about complex data in the fashion industry, we are referring to a variety of factors:
Different cash register systems: Apparel retailers often use over a hundred different point of sale systems, each with its own data format and idiosyncrasies. In addition, there are frequent updates to the systems that require constant adjustments.
Missing data: Sometimes important data points are missing, making it difficult to get a complete picture.
EDI/ERP connection: Electronic data interchange (EDI) routes data from these diverse systems, but it’s like putting square pegs in round holes. The system tries to convert the hundreds of different formats into a universal format, which leads to loss of quality in the data.
Mapping challenges: Mapping data is a significant hurdle because different systems use different formats, such as: B. Branch codes or GLN numbers.
Timing problems: The timing of data submission varies and checkout closures do not always coincide with data submission, meaning data is sometimes sent late or not at all.
Misdirection of data: The complexity can lead to teams looking at the wrong data because they are unsure how to work with it.
Cost factors: EDI can be expensive, which makes data management even more complex, because for cost reasons you get e.g. E.g. an inventory file only once a week.
All of these factors create gaps and inconsistencies in the data. Sending data once a week, as some do, doesn’t make it any easier than daily updates. However, these challenges are also opportunities for innovation.
Chainbalance comes to the rescue
To deal with these complexities, Chainbalance uses a systematic approach. First, based on the steady data flow, we derive sufficient transaction information to fill in the missing points. A crucial piece of the puzzle. The more data points we have, the better our understanding becomes. We don’t reinvent the wheel with every project, but rather use a well-established model for data cleaning. This model streamlines the process and ensures that we don’t have to start from scratch every time we embark on a new project.
During the introductory phase, we run the data through our data cleansing model for at least two weeks. This extended time allows us to clean and accurately map the data, eliminate inconsistencies, and fill in missing information. The result is data that is not only cleaned, but also made universal and consistent, increasing its reliability and usability.
But for what?
Why does all this effort matter? Because understanding and trusting data is critical when it comes to decision making. By providing our customers with trusted data, we enable them to make informed decisions that can unlock their growth potential.
If we don’t clean and map the data first, daily micro-decisions will be based on mismatched information. This often leads to overstocking and lost sales. In contrast, brands that have a better overview and understanding of their data can avoid such challenges.
Transparency is particularly important in the fashion industry, especially when it comes to data. Brands that base their processes on complex data achieve a clearer understanding of their operations, leading to more strategic and impactful decisions. Ultimately, this transparency is a plus for every aspect of business, especially in an industry as dynamic as fashion.
In summary, while the complexity of data may seem like a challenge, it is also an opportunity for growth and innovation in the apparel industry. At Chainbalance, we specialize in helping our customers navigate this complexity, enabling them to make informed decisions, drive growth and advance in the ever-changing fashion industry. Trusting data is the first step to unlocking a company’s full potential.
rich&royal – Taking back power through data
Let’s look at this from a different perspective. Now that we’ve discovered why data in the apparel industry is so complex and how we approach this challenge, what do fashion brands have to say about it? What challenges do they face and how do they deal with them? We sat down with Julia Konrad, junior process manager at rich&royal, and Denis Stupp, managing director of rich&royal, to find out.
Overcoming challenges – the time before Chainbalance
Before we came into the picture, rich&royal was already managing its merchandise management in the NOS area automatically with static 1:1 replenishment. This enabled them to use some of their data automatically, but they also had to rework it manually in order to optimally serve the areas. Julia explained that ensuring continuity and comparability was a hurdle. In addition, the lack of transparency into customer inventory levels made replenishment a complex task. And even with inventory transparency, there aren’t enough employees to handle this task manually.
Denis highlighted the sheer volume of sales reports received without validation or cleanup. But also the differences between them. One week, maybe 400 customers sent them reports, and the next week there were only 300. “Nobody has ever checked it,” he said, emphasizing the monumental task of sifting through massive amounts of data to track which customers sent data when and how continuously they sent. The lack of labor exacerbated these problems.
When data arrived late or was missing, the rich&royal team struggled to keep track and sometimes discovered errors only after they had already occurred. Their approach of reaching out to partners, correcting errors, and requesting necessary changes is still used today. However, maintaining an overview and taking the time to closely examine every detail remained a significant challenge.
Transparency, continuity and time – hurdles that must be overcome
When Chainbalance came into play, the team expected a certain level of transparency and efficiency. Julia noted that there weren’t many surprises during implementation. However, the manual NOS (Replenishment) pre-order and re-order processes revealed unexpected inventory issues, particularly overstocking due to multiple restocks.
Denis added that they had already taken steps to control and monitor their processes, but were surprised at how much had gone wrong in practice. This realization was an eye-opener – both in terms of profitability and sustainability.
The power of partnership and acceptance – the vision of “Grow together”
rich&royal’s partnership with Chainbalance has been strengthened by the willingness of their merchants and partners to share data and trust in the innovative replenishment process. Julia mentioned that this was a positive surprise for her. In Denis’ opinion, it doesn’t hurt that Chainbalance already has a good reputation in the market and is known to many retailers due to partnerships with other fashion brands. This results in retailers knowing that Smart Supply works well. Furthermore, Denis thinks that “this partnership is a really good combination, both because of Smart Supply’s reputation and because of our own product, which is currently really good in terms of performance. We are only associated with NOS so far. But the Retailers note that putting replenishment in the hands of rich&royal works well, especially with the support of Smart Supply. This can only be a win-win-win for everyone.”
Julia continued to emphasize rich&royal’s motto and vision, “Grow together” with her partners. For them, this means following a growth path together and taking on mutual responsibility. Through Chainbalance, they take over merchandise management, while the partner ensures the punctual and correct transmission of the data. “Adopting replenishment leads to a huge increase in POS performance, and through increased productivity we capture sales share and POS,” adds Julia.
They also regain transparency about their products and can identify and reduce excess inventory, which not only increases productivity but also means environmental responsibility while optimizing merchandising processes.
The goal is to provide the right goods, for the right POS, at the right time, in the right quantity, and the result is of course the optimal use of capacity and maximization of sales.
Both Julia and Denis emphasized the importance of working with data in merchandise management for today and the future. They highlight how data analysis helps optimize their products and effectively serve sales territories. The increasing relevance of data in the industry makes its continuous collection essential for success.
Denis summed it up succinctly: “Unimaginable. Too much has changed in the last 10, 20 or 30 years. It is extremely difficult for retailers to generate gross profits that cover the ever-increasing costs and lead to a profit “The correct handling of the goods is essential and complex at the same time. This is impossible without providing data and evaluating it.” Data is now the lifeline of their operations, and without it, thriving in the fast-paced world of fashion is simply unthinkable.
What can we take from this flood of information?
Well, the topic of data in the fashion industry may not be as daunting as it seems at first glance. If you have the right help to untangle the mess, of course. Analyzing data is also absolutely essential in the dynamic consumer landscape (and will give you an advantage over competitors). Are you interested in learning more about how you can regain trust in data and unlock your hidden growth potential? Contact us here or via [email protected].