The Rolling Stones’ most famous lyric aside, no customer wants to hear they can’t always get what they want. Unfortunately, during the pandemic, shoppers have been facing an unprecedented level of stock-outs in some categories. Meanwhile, retailers are sitting on a glut of unsold goods in other areas thanks to shelter-in-place measures and work-from-home mandates. While the industry could be forgiven for the inability to manage inventory through a black swan event, the reality is fashion has long been plagued by a mismatch in supply and demand.
Here, we’ve tapped industry leaders in inventory management to share how they’re overhauling their digital-first strategies, inventory visibility and demand planning to manage inventory volume and availability across channels.
Frank Bracken, Executive Vice President and CEO of North America, Foot Locker
On what digital-first assortment planning means for his business: We have worked hard to build a true omni-view inventory—an inventory that is visible and committable regardless of where the item physically sits—especially over the past 24 months.
On improving inventory visibility: Most recently, we re-platformed our entire core retail system to focus on inventory and order brokering to benefit our customers. Essentially now, online transactions can pull from warehouse and store inventory and vice versa. There is no such thing as stranded inventory in our ecosystem.
On the most useful information in demand planning beyond historical data: We are entering a new era of demand planning, inventory and supply chain management—all enabled by technology and integrated systems. The collective ecosystem that we create will include data sharing and inventory sharing, all of which will make our customers happy.
Charlie Roberts, Managing Director, Sales & Marketing, Echo Design Group
On what digital-first assortment planning means for his business: Digital-first selling provides us great insight into who is buying and why they may be making a particular purchase. The biggest impact here lies in our ability to feed insight back into our development process. By understanding the steps a customer took before making a purchase, we can make smarter decisions about which aspects of a strong seller are driving a given sale. This allows us to lean into the specific feature, color, motif, message or other aspect of the sale that is resonating most.
On improving inventory visibility: The most challenging aspect surrounding inventory visibility is deciding what not to look at, and in this regard, we believe less is more. With so much data streaming in, simplification is critical. While we’re working to increase the data points we collect, we’re simultaneously pushing to consolidate data from all channels.
On the most useful information in demand planning beyond historical data: Our demand planning is a blend of art and science. We extensively review historical data, of course, but we also gather forward looking information from various trend services, global travel, customer anecdotes and more. We’ve focused our customer-facing sales teams to have a sharper product focus, making it easier to develop truer expertise. This has resulted in much more effective communication across teams and produced more insightful anecdotal information.
Cynthia Yao, Supply Planning Director, TOMS
On what digital-first assortment planning means for her business: Digital-first assortment planning is essential for visibility enhancement and efficiency improvement. Amid Covid-19, we moved lots of meetings to online, and the brand conference meeting couldn’t run very well without some digital technical efforts like 3D shoe review.
On improving inventory visibility: We have upgraded the platform for e-comm sales and we have tools for ASN (advance ship notice) EDI (electronic data interchange) which apply to our supply chain. Under the current climate with tight vessel space and constrained containers, for example, many order delivery schedules are delayed. Digital assortments reveal the real impacts in real time, providing quick connections to sales and customers to mitigate the risks.
On the most useful information in demand planning beyond historical data: We couldn’t meet demand without T1 and T2 suppliers’ participation, hence keeping good relationships with our core vendors. Enhancing their flexibility, resilience and transparency on capacity management and quick reaction to the market are critical. Other key factors: sourcing new a factory if necessary; leveraging factory capacity for building up core product inventory in low season and making space for new product in peak season; working closely with internal/external stakeholders to shorten lead time and reduce production risks in advance. This ensures production goes more smoothly, boosts productivity and yields fewer defects.
Tony Drockton, Founder and Chairman of Hammitt LA
On what digital-first assortment planning means for his business: Focus first and foremost on integrating analytics and flexibility in order to calibrate and improve inventory levels. This has enabled us to efficiently raise sales and margins for direct-to-consumer e-commerce. By buying for our DTC branch before wholesale, deep DTC analytics take the lead in designing future and current assortments. Having that direct relationship and the data around it allows us to design for maximum sell through in all channels of distribution at full margin. We recently integrated with visualization software to create clear KPI’s from all areas into one mobile friendly graphic that can easily be manipulated with unlimited what-if scenarios or forecasts. We also created a “drops” initiative solely for our DTC platform to add a sense of urgency and exclusivity for our loyal customers by giving them early access to limited-edition accessories and styles.
On the most useful information in demand planning beyond historical data: Fashion is now a digital-first demand planning world. We carefully plan our digital spend around profitable scaling, and this takes precedent over historical demand data. Entire new demand curves can quickly be created with an effective well-planned digital spend. We strive to simplify our supply chain and build strong long-term relationships that save money in other ways versus focusing on lowest cost riskier sourcing options. Demand planning is useless without assurance of delivery in the supply chain, and this is the Achilles heel for most planners.
Hosea Chang, Chief Operating Officer of Hayden Girl
On what digital-first assortment planning means for his business: We are an e-commerce-only apparel business, so when assortment planning, we are not thinking where in the store it will go but rather how we want to organize our website to instantly attract new clientele. Two big questions drive our digital assortment planning: What season is next? and What are the ‘big girls’ wearing?
On the most useful information in demand planning beyond historical data: Tween girls want to express themselves through their clothing, and beyond historical data, we pull ideas from trends that are popular among young women’s clothing and translate it to age-appropriate styles and sizes. While these young ladies have minds of their own, moms and dads are the ones who are buying.
This article is part of our Inventory Management report. To download the full report, click here.