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Fighting Markdowns with Better Software

Relentless pressures for markdowns show no sign of abating in the retail fashion business. Many top brands, including Abercrombie & Fitch, Gap, and Victoria’s Secret made no secret of their need to slash prices in the 2013 holiday season. Smaller firms felt even larger pressure to cut prices.

There’s no escaping consumer demand for faster fashion at lower prices, but many companies are learning to respond effectively with the help of better technology.

Product lifecycle management has always been a core business discipline for the apparel industry. But just as hand-sewn garments gave way to machine-sewn apparel, spreadsheet-based product planning simply can’t meet the complex planning needs of the 21st century apparel business.

Smooth collaboration is the hallmark of the most successful fashion companies today. Companies that are renowned for fast fashion got that way through great teamwork. Some organizations develop good collaboration naturally, others need a framework for structuring collaboration. That’s where specialized product lifecycle management software can help. Spreadsheets seem like an easy medium for collaboration, but they often do more harm than good. When multiple departments or people within departments attempt collaborative planning on spreadsheets, the inevitable results include:

  • Confusion between multiple, outdated spreadsheets
  • Silos of information stored on different spreadsheets in different departments
  • A lack of coherence due to different data structures
  • Delays resulting from slow dissemination of spreadsheets.
  • Samples made to the wrong specification with time lost and costs incurred
  • Intellectual property residing on individuals’ hard drives with a risk of them leaving
  • Poor re-use of previous styles and components
  • Inability to aggregate usage of fabrics and trims across different collections and styles to leverage purchasing power and drive down sourcing costs

A planning system based on spreadsheets is often worse than no system at all. What’s needed is a comprehensive, shared solution that allows everyone to contribute their best work simultaneously, so that people aren’t working at cross-purposes or waiting on their step in a sequential process.

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The newest generation of product lifecycle management software can improve collaboration so that fashion firms can get their most exciting concepts to consumers quicker, at a lower cost and respond more quickly to changing consumer tastes.

Fashion companies should take the following actions in order to remain competitive:

  • Plan product lines for an optimal mix: Launch a better mix of new products faster that sell well and minimize markdowns, keeping margins high.
  • Empower creative, technical, and commercial teams: Help internal teams collaborate more effectively to develop the right styles faster and avoid wasting time on repetitive tasks, and chasing information so they can focus on product innovation and value-adding activities.
  • Develop new collections faster: Get new collections and styles to market more quickly for acceptance by the retailer. Then, get product to the consumer faster to capitalize on the latest fashions and closer to full ticket price. This also helps reduce capital tied up in inventory and inventory exposure risk.
  • Accelerate product innovation and improve efficiencies: Streamline product development tasks with PLM software so that less time is wasted on inefficient processes, repetitive tasks, and rework. With more time for product innovation, firms can more clearly differentiate their brands in the market place.
  • Have the ability to make changes to styles during the collection sales window: Companies must be able to react quickly to consumer trends, tweak designs and rapidly source in order to grow sales revenues.

While there’s nothing new about preventing markdowns–just deliver what customers want when they want it–the difficulty of doing that is greater than ever. The rise of fast fashion, global sourcing and brutal price pressures have left fashion brands and manufacturers no choice but to deploy the most effective weapons available for maintaining a fast, efficient, economical business process. Modern PLM software should offer fashion-focused capabilities, including:

  • User experience: An intuitive user interface that is pleasing and meaningful enable employees to do their jobs faster, ensures tasks don’t get missed, and offers contextual information to make certain the right decisions are made and implemented.
  • Concurrent processing: To speed up the overall product design and production process, PLM software should permit management of different phases of the same collection simultaneously, rather than sequentially. That shortens the time from concept to consumer and helps companies keep up with the latest consumer trends.
  • Natural work flow: Individual configurability ensures that every person gets to work the way that works best for them.
  • Automation of repetitive tasks: Features that help focus your attention on designing, developing and delivering new and better products bring important added value. Using software to automate common tasks lets users focus on innovation. An online materials library with drag and drop access to colors, fabrics, trims, and other supplier details can speed the process even more.
  • Collaboration across teams: Unify the efforts of creative, technical, and commercial teams using integrated collaboration features to streamline the design, development, and sourcing process.

By creating a common platform for collaborative work, and by structuring that collaboration to make it easy and efficient for everyone involved, PLM solutions help companies develop and source or manufacture better products faster and get them to customers more economically. That increases the chance of delivering the right product at the right price to the end consumer, which in turn, avoids profit-killing stock outs and markdowns.

jakeBob McKee has more than 40 years of experience working in and with apparel, footwear, home textiles and fashion accessories companies. He has hands-on experience sourcing apparel products around the globe and was one of the first US apparel executives to start sourcing in China in the early 80s. His knowledge and skills span retail, sourcing, manufacturing, and product development within the fashion industry.