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Solving Inventory Challenges in a Consumer-Led Marketplace

The apparel industry is still largely playing a guessing game when it comes to merchandising, pinning their hopes on goods with commitments that were made months in advance with only an inkling of what tastes will be in the future.

It’s a high-stakes venture that many are losing.

Time and again, retailers’ financial reports blame over-assortments and under-penetration for their company’s ills. Meanwhile, digitally native brands are gaining share by leaning on agility and customer-centricity.

One reason for the continuous misses is a disconnect between products and shoppers, according to Boaz David, founder of fashion design, product development, and manufacturing company Human B.

By working closely with apparel brands and analyzing how their businesses are currently run, Human B can help institute new processes and develop a culture that fits with today’s consumer-led marketplace.

The first thing David’s team does is help clients gain a better understanding of their consumers. Until they master that, he said, brands will always be creating assortments in the dark.

“Customer relationship management systems help them stay in touch with the customer and market to them. AI helps predict what customers are looking for and what’s selling. Ultimately, it helps brands make decisions based on prediction, not estimations,” he said.

By conducting customer research and integrating those findings into a CRM, David said he enabled one apparel firm to lower its inventory stock by 60 percent. Those are the types of benefits companies can see when the product is aligned with demand.

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With the product piece better in hand, David said the next thing he evaluates is his client’s supply chains because they’re often the reason for long development lead times. And the further out you have to make design decisions, the harder it is to be accurate with forecasts.

One solution is 3D design technology, a service that Human B recently launched to help brands cut their design and development time. For those companies still operating via email and other rudimentary tools, he suggests they swap them out for digital options.

“There are technologies that can help manage your supply chain better,” David said. “Rather than emails where you have to figure out what was said, it puts all of your communications with your factory into one place, and you can easily follow up.”

Even with the tech in place, it won’t solve all timeline headaches, he said. Speed to market can often be achieved by culture and process changes, he said.

“There’s a lot of time wasted on making decisions and getting approvals,” he said. “If you look at Zara, one of the things that they did inside the company is that they made the decisions of how to make decisions. They’re not wasting time on making decisions so the supply chain is a lot quicker.”

Another thing that bloats timelines is distance, according to David. Where possible, he advises firms to consider nearshoring. Through relationships with factories in the Dominican Republic, David has helped clients greatly improve their agility.

“These clients store fabric and produce smaller units on demand more frequently, as frequently as biweekly,” he said. “Then their cash flow isn’t tied down, and the inventory is managed much better. Additionally, they can change the production orders if items aren’t selling.”

The added benefit of having a better understanding of what consumers want and a supply chain that can execute on those insights is what better positions brands for direct-to-consumer business models. DTC allows for better margins, more agility, and a direct connection to shoppers so the brand can then create a unique customer experience for their target audience.

“Growing the DTC part of the business is the last part that we break into,” he said, adding increasingly established wholesalers are going this route. “Many brands are struggling, the retailers are not buying as they used to in the past, and if they do buy from them, the brands find themselves either chasing for payments or consistently drop prices or both, and that makes it very hard to work.”

To learn more about Human B, visit the company’s website.