The fashion industry is changing faster than ever, and this year will be no different. The greatest challenges for companies to tackle are responding and adapting to disruptions quickly, getting the product mix right, and improving supply chain visibility. Technology innovation and full digitalization of supply processes are the key to strategic business management that will help create steady growth.
E-commerce as a sales channel
E-commerce is unquestionably the most active sales channel and growth opportunity today. Certainly, consumer shopping behaviors continue to be a major driving force in the industry. Demand for shorter lead times and higher product quality in relation to price has put a strain on businesses to streamline the entire supply process. From design to sourcing, to production, to logistics, to wholesale and to retail, they need to develop a sound strategy that won’t crumble in the future. To do so, it is necessary to modernize the supply chain through complete digitalization. This will improve warehouse management and fulfillment by increasing supply visibility and reducing errors in the process, ultimately reducing costs as well. Additionally, established brands are changing their business models and rebranding themselves to self-disrupt and streamline their design-to-market timeline.
Digital platforms and challenges
Updating or replacing Enterprise Resource Planning (ERP) systems will help address many of the challenges that businesses are currently facing. Having digital platforms allows brands to analyze customer patterns and use that information with predictive analytics to anticipate consumer wants and needs. That way, they can make better-informed decisions regarding what to produce in what quantities and at which price points. All in almost real time, improving inventory turnover. Not only that, advancements in ERP will help integrate manufacturing, wholesale, retail, and e-commerce operations. This way are decreasing gaps in visibility and functionality as well as creating a more seamless customer shopping experience. These two trends are backed by the fact that almost 95% of businesses plan to increase IT budgets. According to the 2019 CGS survey, the top 2 investment priorities are warehouse fulfillment and management, and business intelligence and big data capabilities.
With the changing nature of the fashion industry, ERP requirements are shifting notably, in the increasing importance of integrating multiple business processes for better, faster responses to disruptions. Other top requirements include reporting and actionable intelligence and knowledgeable support staff and resources with deep expertise. A cross-functional team of close involvement in selecting and implementing a system is an important factor in ERP success.
While it’s not yet clear what are all the challenges that 2019 will bring, the important areas to focus on are improving business strategy and going digital in order to be ready for what the future holds.