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Apparel and fashion have always posed challenges for retail, especially when it comes to inventory management. Add in eCommerce, and the challenges only multiply. Smart systems can help retailers finally get a grip on the most difficult aspects of stocking apparel and shipping orders to customers.
Apparel and fashion have always posed challenges for retail. Not only must retailers carry a wide array of choices (both in their brick & mortar stores and online), but each item needs to be represented in multiple sizes, colors, and patterns. Inventory management must be on point to ensure there is plenty of stock to fulfill orders, while at the same time not being overburdened with things that are out-of-style and unsellable.
Not that long ago, people resisted the idea of buying clothing and shoes without first feeling the material, seeing the quality, and most importantly, trying them on for a proper fit. The explosion of eCommerce has seen a drastic change in this attitude, with even high-end fashions being purchased online.
Even before COVID-19, online shopping became the preferred method of purchasing for many consumers. Growth accelerated as the pandemic forced people to stay home. And even upon reopening, some stores have kept fitting rooms off-limits.
eCommerce for apparel has made great strides in recent years. This is thanks to improvements in inventory and warehouse management systems and a focus on the customer’s experience in regards to things like fast delivery and easy returns.
Still, the challenges in the apparel and fashion space can derail a retailer. Anticipating problems and having logistics solutions ready are the keys to success.
Returns due to incorrect picking, mistakes in packaging, and quality control issues are a given no matter the product. But according to a CNBC story in 2019, clothing and shoes have a return rate of 30 to 40%.
It’s easy to understand why this number is so high. Customers are using their own homes as a fitting room, rather than making a selection at the store. Easier (and cheaper) return policies allow people to order more than they intend to keep. It’s not uncommon for someone to buy more than one size of a single item to find what fits best. The rest are sent back at little or no cost nor inconvenience.
While generous return policies are welcomed by customers (and even become selling points) they pose a challenge for sellers. Items that come back to the warehouse must be inspected and re-shelved, or discarded. This can be logistically difficult as well as expensive. In some cases, dealing with returns is so cost in-effective that customers are instructed to keep the item, even if a replacement is on its way.
Normal methods of reducing returns—accurate picking and good quality control—are important, but not enough for apparel. It is essential for online product pages to have accurate photos and descriptions of every item. Offering customer feedback about items’ quality or being “true to size” can also help.
Aside from these things, it is simply a fact that online apparel sales will result in a lot of returns. Clothing and footwear companies must have a WMS that streamlines the returns process. It should be easy for the customer, provide quick refunds or replacements, and have an efficient plan for dealing with the physical inventory when it arrives back at the warehouse.
Inventory management is a huge challenge for an industry with as much dependence on trends and seasonality as apparel. Consumer tastes change overnight and it’s not always easy for retailers to determine which styles are fads and which ones are here to stay.
Inventory management software that includes predictive analytics can help in deciding which fashions to stock and in what quantities. It is also a valuable tool in choosing the proper price point for an item (for example, for discounting slow-mover) and how to allocate marketing dollars to get in front of the appropriate demographic.
Relying on clear historical data matched with expected buying patterns is a manager’s best option to keep up with ever-changing fashions and trends.
Customers have become used to finding items in their size and color preference. It is easy to fall into the trap of ordering too much stock to cover every possible order combination. Unfortunately, this often means offering deep discounts on merchandise that is left over once the trend has passed or the season changes.
Again, predictive analytics has the answer when stocking the shelves. Not only will it help determine which styles to carry, but how many are likely to sell.
Visibility across all sales channels plays a part too. For example, warehouse management software should be able to send managers an alert when a given SKU is running low. More than just the analytics that allow managers to see real-time stock levels, WMS should also provide a means to do something about them, whether that is placing a manual order, or setting up automatic reorders in the system. For example, common items (think plain t-shirts, socks, and underwear) might be set to reorder automatically from the supplier. More exclusive items (high-end designer dresses or handbags) may be allowed to sell out when the end of the season is near.
Whether a seller has its own warehouse or uses a 3PL, impeccable inventory management is essential. It’s not enough to know that “blue shirts are in aisle 12” when you have blue shirts in dozens of styles, sizes, and shades of blue. Managers need to know exactly what is in the warehouse, and where, at any given time.
This starts with an efficient layout of the warehouse, which can be mapped out using WMS. Allowing the software to determine protocols for other basic warehouse functions like receiving, storage, picking, packing, and shipping will make the entire operation more efficient. Automation and integration across areas of the warehouse should be top of mind too.
And throughout the entire process, quality control is especially important with apparel. Fabric quality, the integrity of buttons and zippers, as well as consistent sizing will all help reduce returns and dissatisfied customers.
Today’s consumer pays attention to online influencers and is as interested in the buying experience as much as the clothes themselves. Case in point: The popularity of “unboxing” videos on Instagram and Facebook.
This means retailers are investing more than ever in the look of their websites, online product presentation, and packaging.
WMS can help by building fulfillment plans that outline the proper packaging and presentation of the product. Everything from box size to tissue paper, tape, and customized labels can make up the kitting protocol for specialty apparel products. Whether kitting is happening in a retailer’s warehouse or a 3PL, each step of the process can be planned—and monitored—to give the customer the ideal experience when their package arrives.
Because of costly issues like specialty packaging and returns, apparel retailers may look to their supply chain for ways to save.
For example, software that integrates with fabric suppliers can find the lowest cost without sacrificing quality. Speed with which new items can go from the runway or designer’s table to the online store is also important with apparel. Complete visibility of product availability from a number of supplier options can help ensure that there is a steady stream of in-demand stock. Constant monitoring of vendor KPIs can find the best supply chain partners, whether on the supply end or shipping to customers.
WMS can also keep track of all of the variables involved in an industry where vendors are largely overseas. Tariffs, lead time issues, and even time zones come into play. Today’s retailers also deal with the heightened desire for products that are made and shipped with sustainable materials and in facilities with fair wages and working conditions. Brand image is everything and the right WMS can help by maintaining good supply chain relationships.
The apparel industry is constantly changing at a speed not experienced by most industries. Sales are subject to trends and preferences that can be hard to define and nearly impossible to predict. Warehouse management software and an inventory management system are the best chance retailers have to react and respond to the whims of this ever-changing marketplace.
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