Fashion retailers must adopt a new approach to managing their supply chains, or risk being saddled with debt mountains, caused by immovable stock, according to management consultants KPMG.
UK retail sales values in August were down by 0.4 per cent on a like-for-like basis from August 2011, according to the latest BRC/KPMG Retail Sales Monitor
Andrew Underwood, partner at KPMG, said: “The rise of ‘fast fashion’ has placed a huge strain on the marketplace, with retailers struggling to shift goods before they become ‘yesterday’s season’. Consumer pressure also means that the concept of having a fresh floor every month has changed the way supply chains need to perform. It’s no longer enough to ‘buy to sell’ as retailers now need to pay closer attention to product lifecycles, improve forecast accuracy and take a fresh look at their supply chain just to keep their heads above water.”
He argued that is was retailers that made use of cloud technology to bring together information from every corner of the supply chain, would be in a better position to manage demand.
“The simple fact is that predictions coming out of head office no longer suffice. With a growing number of consumers turning to tablets and mobile apps to shop on the move, supply chains somehow have to cope with rapidly changing demand, driven by social media rather than traditional channels to market. But unless the right system is in place, how can retailers reasonably expect to separate and manage stock? How can they be geared up to provide the right number of units in the right place at the right time?
The answer, he said, lay in greater collaboration with each part of the supply chain, so that consensus forecasting becomes the norm, rather than the exception.
“Only when retailers take on board the information gleaned in real-time by their suppliers, logistics and customer service teams who deal with after-sales returns can true picture of stock availability be painted. And only then will stock-piling stand a chance of becoming a thing of the past.”