Eliminating Inventory, Discounting and Waste in Fashion
Why do Fashion Brands burn clothing?
A recent Wall Street Journal article highlighted the fact that Luxury Fashion Brand Burberry would no longer engage in the practice of burning excess inventory. (WSJ article Sept 6, 2018.) Unfortunately, burning or destroying unsold stock is a common practice. For Example, in March 2018, a report revealed that H&M were struggling with $4.3 billion worth of merchandise.
While each brand has their own business reasons for participating in this wasteful as well as socially and environmentally insensitive policy, the issue is tied directly to their legacy design and distribution processes. The fact is that many fashion retailers simply make much more clothing than they can sell.
Why do Fashion Brands make more than they can sell?
In the old process, a design is created, and then presented to potential buyers. After that the waste begins. Based on the perceived levels of excitement generated during the buyer presentations, brand managers make estimates on the volume of clothing styles, and sizes needed to address consumer requirements.
After the guesstimation is complete, the garments are produced, and then shipped to retail outlets to be purchased during the appropriate fashion season. Order too little of any item and the retailer will have shortages which limit profits and impacts the brand. Order too much and they are faced with excessive inventory which ties up capital and shelf space.
It’s this excess unsold inventory that eventually makes it way first into discount outlets and later into landfills and furnaces.
How can Digital Design, Patterning and Production Help?
With digital design, patterning and production most if not all of the issue that creates waste are eliminated. The new approach allows designers to:
Create a broader variety of styles and concepts with the same amount of effort.
Present the fashions virtually then collect and apply consumer input into the design.
Convert interest into sales immediately via eCommerce as well as new forms of digital point-of-purchase selling.
Produce and distribute the exact quantity of styles/sizes purchased.
The key component of this strategy is the shift to production after sales while maintaining timely garment delivery. This change can reduce or eliminate inventory and waste and is only possible with a digital process.
What’s the Next Step for your Fashion Business?
The transition to digital provides a practical and profitable solution to Fashion Waste. Brands need to look no further than recent announcements from online retailer Amazon to envision the new direction for on-demand, consumer driven design, sells, production and distribution.
To learn how your company can implement these business advantages click on the link below. You can schedule a time to speak with one of our experts and see the technologies that are driving the “no waste” future of fashion.