Fashion has always had data at its disposal, but the industry has faced challenges in interpreting and acting on this information. However, the difficulties of using legacy systems during Covid-19 could prove the catalyst for brands to move away from spreadsheets and toward digitally powered decision making.
During a panel discussion at O9 Solutions’ Aim 10x Global 2021 virtual event on April 20, speakers from Deckers Brands, Lands’ End, Levi Strauss & Co., New Balance, Ralph Lauren and Versace discussed the need to better leverage data analytics for planning in response to quickly evolving fashion trends and unpredictability. The pandemic has ushered in escalating e-commerce sales, changing consumer behavior and supply-chain disruptions, making historical data unreliable.
“Traditional planning systems used for supply chain and demand planning all rely on the basic assumption that the future is going to be more of the same like the past,” said Andrea Riva, business transformation and PMO, senior director at Versace. “And instead, the world where we live—the increased volatility of our world—means that the prediction error rates can really increase.”
Panelists pointed out that demand planning isn’t a perfect science, particularly in fashion. And prediction has only become more difficult as trend creation is democratized. Instead of brands dictating the look of the season or year, now more power rests with shoppers, and their fickle and varying desires. Nathan Isaacson, general manager of digital and lifestyle at New Balance, shared the example that his brand put a tank style in a focus group, only to have it become hot at retail 18 months later.
The answer to fashion’s unpredictability is being able to make adjustments closer to retail. “I don’t think the name of the game is ever to try to perfectly predict what the consumer is going to want, because that’s a shifting target,” said Isaacson. “So what we’re trying to do is become more analytically informed, shorten our lead times, become more flexible so that we can be more responsive.”
Lead times for production and transportation are largely fixed, but companies can focus on what can be changed by shortening the planning process. By shrinking the time it takes to get from concept to sourcing, companies can close some of the gap between planning and retail.
Creating agility revolves around taking a “fabric-first mentality” to planning, ensuring that vendors have raw materials at their facilities earlier, said Vishal Mankotia, vice president global supply management at Levi Strauss & Co. He also stressed the importance of sharing information with suppliers in real time. “You’ve got to get into a relationship which is more transformational, not transactional, with your vendor base because you’re in the game together, so you win together, you lose together. So if something goes wrong, you need to support them financially. You should be ready to fail fast,” he added. “Agility is the new currency in this business.”
Given the disruptions that can happen in a supply chain—including recent Covid-19 transportation delays—having close vendor relationships allows for greater adaptability. As an example, Jennifer Palzkill, senior director, inventory planning at Lands’ End, noted that having this collaboration enables retailers to adjust the destination for goods before they leave a factory if demand shifts. According to Christine Chidoub, vice president at Ralph Lauren, technology enables companies to “empower” their suppliers by taking correspondence and information sharing from spreadsheets to continuous engagement, enabling them to be part of the conversation earlier and tapping into their expertise.
Moving from spreadsheets to real-time visibility and a single version of the truth lets companies be more proactive than reactive. Mikko Sivonen, senior director, global trade and logistics at Deckers Brands, explained that waiting for updates could cause a company to be days or a month late in its response. This could mean lost sales or stale products.
“Now [you’re] getting visibility and current views at all times and being able to react and scenario plan and manage that supply, and you need to do it because of the pandemic environment,” said Sivonen. “You’re needing to plan over and over again on a continuous basis.” For planners, the new normal necessitates a more consistent engagement with inventory that extends beyond buying.
Omnichannel retail operations have been the goal for years, but Covid-19 has accelerated this shopping behavior. With this shift to digital and cross-channel selling, planning needs to keep up.
Lands’ End used to be a primarily catalog-driven business, but with the rise of digital sales, its 30-year-old planning system was outdated. “It was becoming increasingly difficult for us to produce an accurate forecast by country, by division, because we were being siloed into using those former medias which used to be important to us,” said Palzkill. The company recently adopted O9, whose analytics-powered integrated business planning platform enables it to plan specifically for each channel, whether print or e-commerce.
Part of improving planning revolves around interdepartmental collaboration. Making this change often necessitates a cultural shift, and it also requires trust in the data. “There’s an opportunistic side to the disruption we all went through last year,” said Chidoub. “And part of that opportunity is really capitalizing on technology to help our teams move and progress beyond those silos.”