If you look at the digitization index of the German economy and take a closer look at retail, you will see that, at 75.4 points, it is well below the average of 105.1 points (source: Statista). But what about the fashion industry in particular? What is stopping the fashion retail trade from dealing with digitization? And: How can digital solutions help to optimize day-to-day business?
In an industry like ours – peppered with famous names like Chanel, Lagerfeld or Versace, which stand for emotions, personality and lifestyle – the space and willingness for digitization seems small. But why is that so? And: could digitization help create more time for creativity?
Digitization in the fashion industry: Between status quo, change and future
Our industry in particular is dominated by creative and experienced experts, fields such as design, collection planning and personal relationships with partners – mutual trust and the sealing handshake will not be replaced in the future or will lose their value. Nevertheless, the market and consumers are changing rapidly. Today’s customers are demanding, dynamic and well-informed. It is difficult for the industry to keep up – there are lost profits due to long processes and huge overstocks, which result in high discounts and unsold goods. Over the years, it has become increasingly clear how much the world has changed as a result of digitization – and how the fashion world is still reluctant to adapt.
This leads to increased pressure and demand for automation and intelligent processes from brands.
Not that there are not enough providers for digitization processes. A Google search returns over 6,570,000 results in just 0.54 seconds. So why is there little to no improvement in our industry? The answer is the complexity of the processes. Our industry is a slow business. Thousands of articles and several collections per year, all embedded in complex structures. The fashion industry is comparatively difficult, not least due to seasonal fluctuations, unpredictable developments such as the weather, microtrends and increasingly unpredictable buying behavior on the part of customers.
Fluctuating demand and rearrangements: This is how the process can be optimized
Fortunately, there are companies that have been dealing with these challenges in the fashion industry for many years. Chainbalance, for example, which has been supporting the industry – with over 23 brands worldwide – for 14 years to become faster and more sustainable. With Chainbalance’s Smart Merchandise Management Solution, sales are increased, employee workloads are reduced and production forecasts are more accurate to avoid overproduction and bring the value chain closer to consumers. With the recent update, a new feature based on optimization algorithms and logics has been added to the repertoire.
Turn long hours of planning into just minutes
Responding to rapidly changing demand in a timely manner requires a high level of analysis. Especially when it comes to bestsellers, stocks are empty quickly and the risk of sales losses is high. These products at the POS can, for example, be in overstock at a store that does not sell them. A transfer from this business to a profitable one could prevent the revenue that would otherwise be lost. In order to achieve these additional sales, time, logistics costs and the specific article must be taken into account and analyzed in depth. Navigating this process and making an optimal decision to relocate is an intense and time-consuming process – one that often falls short in day-to-day business.
Chainbalance’s Smart Store-to-Store Transfer uses an evolutionary algorithm – a branch of artificial intelligence that automatically simulates hundreds of decisions to find the best decision to avoid lost sales, reduce logistics costs and reduce CO2 emissions. Chainbalance can not only look back on more than 14 years of business success with its team of experts from the fashion industry, but also on young talents.
Lucas van der Horst, for example, is a master’s student in artificial intelligence at the Hogeschool Utrecht. He has been working at Chainbalance for over a year and rose from intern to junior business consultant. He is jointly responsible for the solution that Triumph needs in particular for the merchandise management of the Asian market.
In summary, by using smart store-to-store transfer – supported by artificial intelligence – the manual effort of the team is reduced by over 90%, sales losses are reduced by 20% and costs and CO2 emissions by over 40% lowered. Users can access the function easily and anywhere via Smart Supply® and make business-critical decisions with just a few clicks. AI does the rest, giving the team more time to be creative—no more Excel spreadsheets and hours of tedious work.
interest aroused? Learn more about how companies like Esprit, Triumph or YAYA benefit from Chainbalance’s Smart Merchandise Management, or about Lucas’ process to optimize the entire transfer process of our client’s stores in Asia.
Contact us here.