Recently, countless fashion fans and shoppers in India and globally, experienced one of the most peculiar, albeit unexpected launches of all time. It was the launch of the first-ever collaboration between Swedish fast fashion brand, H&M, and an Indian designer. The designer is one of India’s finest, most celebrated, one that’s synonymous with bridal couture, and one that’s helped put a global spotlight on Indian craftsmanship—fashion designer, Sabyasachi Mukherjee.
Image Source: hm.com
The Stock Problem
While the collection received mixed reactions from shoppers as well as fashion critics for various different reasons, the fact that the collection sold out in less than an hour, especially online, and shoppers were left with just three or four pieces to buy, remains one of the most unexpected things to occur. This left many puzzled, and some disappointed at not being able to get their hands on the exclusive collection.
The stock-out, however, is not a new phenomenon. Many previous collaboration collections with H&M, like the one with Balmain back in 2015, saw numerous people lined up outside H&M stores on the day of the launch, and the collection sold out quicker than anticipated. On the flip side, H&M has also been criticised for its huge inventory problem, one that sums up to unsold stock worth $4.3 billion, as per 2018 records.
Image Source: Cherrycross.com
Stock out, as well as dead stock problems, are equally prevalent today in the industry. Many brands outside the realm of fashion have also sold out much faster than anticipated. Take for example the first Kylie Cosmetics line that sold out within 24 hours of its launch.
Despite implementing RFID inventory systems that are designed to allow retailers to better manage stock, prevent deadstock and stock-outs, reduce cost, increase sales and improve cash flow, many brands continue to face inventory-related woes.
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Tech Has The Answer
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International energy company Eon Group may have a solution. Eon has come up with an operating system that allows manufacturers, recyclers, resellers, consumers or anyone access to complete information about a garment or consumer product. The operating system could help with recycling, resale, and other post-consumer functions, as it would be able to track the lifecycle of a given garment even after its first sale. This gives the technology numerous possibilities of use, including helping improve supply chain efficiency, prevent or decrease out-of-stocks, and enhance marketing performance.
Many fashion brands have already put Eon’s technology to use. One of those is fashion giant Yoox, which owns fashion retailers like Net-A-Porter, which is rolling out an Eon-connected system on all its private label garments. American retail company Walmart’s foundation has committed an amount of $1.2 million to test recycling circularity using Eon’s system.
Never Out Of Stock
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Another solution being adopted by the fashion fraternity is a merchandise planning system called NOOS, short for “never out of stock”. What NOOS entails is a set of products or a collection that is permanently in stock. These NOOS products would not be seasonal, and would be ready for delivery immediately, and thus be stocked with the brand always. Noos articles usually include more classic pieces, such as a basic T-shirt, shirt, or even a pair of trousers, pieces that would always have demand and require less innovation, as opposed to seasonal and on-trend pieces.
German textile discount store, Kik, and denim supplier, Mud Jeans, have adopted a wide-ranging NOOS programme. Kik has 70 per cent of NOOS and only 30 per cent are more fashionable articles. The pandemic-induced fashion slowdown, however, may have proven to be a risk for those adopting the NOOS programme. So while NOOS does solve the stock out problem, it may be difficult for fashion to combat the dead inventory problem at the same time.
A way to make good of dead stock would be to repurpose these NOOS products by changing less within the collection. Outdoor wear brand, Salewa, owned by the Italian Group, Oberalp, has about 75 per cent of their collection that will remain the same and only 20 per cent will feature seasonal collections. Stefan Rainer, Chief Sales Officer of the Oberalp Group, said in an interview with Fashion United, “Our customers don’t want a completely new product every year, and above all, they don’t want to have the feeling that their product is only worth half the price at the end of December. Our retail partners have clearly indicated that this strategy has a positive effect on value preservation and that our brands have been able to achieve a higher gross profit on average as a result.”
The Pre-Order Route
Fashion brands are also starting to adopt the pre-order system in a bid to eliminate stockouts as well as curb wastage and dead stock. Spanish-based fashion brand, Alohas, best known for its shoes, works completely on a pre-order basis. The brand offers a discount on pre-orders, which helps the brand gauge the kind of demand a product has, thus producing limited amounts of an item as per demand, while also making sure all customers are catered to.
Recently, the online luxury platform Far Fetch unveiled its pre-order service as well, which will offer early access for all its customers. Up to 10 brands have already signed up to be a part of its pre-order service, including Nanushka, Balenciaga, Khaite, Off-White, Palm Angels, and Oscar de la Renta. As per the company’s statement, the move comes in an attempt to minimise fashion waste by only making what has been already sold. The new pre-order styles will be available on the platform to shop monthly and will be shipped around four weeks after purchase. “Not a single sample was shipped for the campaign, and influencers will be using digital assets to 'wear' Pre-Order styles,” said the company in a statement.
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