Ram Rocio Sherif FAST FASHION ‘Fast Fashion’Exploring how retailers get affordable fashion on to the high street
IntroductionCentralComponentsPlace andDistribution A fashion is merely a form of ugliness so unbearable that we are compelled to alter it every six months.Channel Strategy& Management --Oscar WildeSupply ChainManagementPostponementConclusion
IntroductionCentralComponents Traditional RetailerPlace andDistributionChannel Strategy Seasonal Autumn Collections Spring Collections& Management ClassificationSupply ChainManagementPostponement Production lead times ranged from 6 months to a yearConclusion Retailers would buy for their collections a year in advance
IntroductionCentralComponentsPlace andDistributionChannel Strategy& ManagementSupply ChainManagementPostponement Production lead times ranged from 6 months to a yearConclusion Retailers would buy for their collections a year in advance
IntroductionCentral Production lead times ranged from a matter ofto a year Production lead times reduced to 6 months WEEKSComponentsPlace andDistributionChannel Strategy& ManagementSupply ChainManagementPostponementConclusion Retailers would buy for their collections a yearfor advance month Retailers would only buy their collections in the next
IntroductionCentral Production lead times reduced to a matter of WEEKSComponentsPlace andDistributionChannel Strategy& ManagementSupply ChainManagementPostponementConclusion Retailers would only buy their collections for the next month
IntroductionCentral Production lead times reduced to a matter of WEEKSComponentsPlace andDistribution More RevenueChannel Strategy& Management More footfall to the storesSupply Chain (Mostly the same customers)ManagementPostponement More New productsConclusion Retailers would only buy their collections for the next month
IntroductionCentral Traditional Fast fashionComponents fashionPlace and Sales GrowthDistribution 12%Channel Strategy 10%& Management 8%Supply ChainManagement 6%Postponement 4%Conclusion 2% 0% Traditional fast Fashion fashion Retail market retail market
Fast FashionIt is a new concept adopted by industry pioneers(e.g. Zara, H&M) which has revolutionized thefashion retail industry.
IntroductionCentralComponents Fast fashionPlace andDistributionChannel Strategy& Management Excellent Leveraging Marketing advanced informationSupply Chain IT systems systemsManagementPostponement Logistics operations ExcellentConclusion communication & within Flexible supply chain production
IntroductionCentral Excellent Marketing information systemsComponentsPlace andDistributionChannel Strategy& Management Market Information Systems are information systemsSupply Chain used in gathering, analyzing and disseminatingManagement information about prices and other information relevant to end users and others involved in handlingPostponement products.Conclusion fast fashion
IntroductionCentral Logistics operations & Flexible productionComponentsPlace and Logistics is the management of the flow of the goods,Distribution information and other resources between the point of originChannel Strategy and the point of consumption in order to meet the& Management requirements of customers.Supply ChainManagementPostponementConclusion
IntroductionCentral Excellent communication within supply chainComponentsPlace andDistribution A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier toChannel Strategy customer.& ManagementSupply ChainManagementPostponementConclusion fast fashion
IntroductionCentral Leveraging advanced IT systemsComponentsPlace andDistribution Customer ExperienceChannel Strategy Transformation& ManagementSupply ChainManagementPostponementConclusion fast fashion
Introduction The 4 P’s of MarketingCentral ProductComponents PricePlace and PromotionDistributionChannel Strategy PlaceSupply ChainManagement „Products need to be available in adequatePostponement quantities, inConclusion convenient locations and at times when customers want to buy them“.
Introduction Distribution ChannelCentralComponents The means by which products are moved from the producer to the ultimate consumer.Place and Consumer Channels of Distribution:Distribution Fast Fashion RetailersChannelStrategy Producer ConsumerSupply ChainManagement Producer Retailer ConsumerPostponement Producer Wholesaler Retailer ConsumerConclusion Producer Agent Wholesaler Retailer Consumer Traditional Fashion Retailers
Distribution Channel SelectionProduct characteristics(easy to handle, bulky) Buyer expectations maymay affect the dictate that a product bedistribution channel sold in a certain wayselected Product Market Factors FactorsOwn distribution channels Producer Competitive Retailers may look to seeor outsource to Factors Factors what their competitorsindependent distributors? are doing, and either usePush product through the the same channels asdistribution channel orlet they are or docustomers „pull“ the something completelyproduct through the different.channel?
Fast Fashion’s Market-Driven Supply The original business idea was very simple. Link customer demand to manufacturing, and link manufacturing to distribution. That is the idea we still live by. Jose Maria Castellano Rios, Inditex CEO
Introduction Fast Fashion’s Market-Driven SupplyCentral Fast fashion retailersComponents can move a product through design,Place and production, and theDistribution distribution channelsChannel Strategy in as little as TWO WEEKSSupply Chain Retail stores are usedManagement as gages of what customers reallyPostponement want. Customers essentiallyConclusion PULL the product through the retailer‘s design, production, and logistics channels.
Introduction Fast Fashion’s Market-Driven SupplyCentralComponents Merits :Place and Company produces exactly what customers wantDistribution 80% of items are sold for the full ticket priceChannel Strategy Pitfalls:Supply Chain Customers become more demanding and fickleManagement Risk of boredom and alienationPostponementConclusion
Introduction Integration of Distribution ChannelsCentral Independent producer and channelComponents intermediariesPlace andDistributionChannel StrategySupply ChainManagementPostponement Ownership: Retailer owns the channelsConclusion
Introduction Low Inventory ConceptCentralComponents Low InventoryPlace andDistributionChannel Strategy Highly Fast& Management Low Lead Time Automated MerchandiseSupply Chain System FlowManagementPostponement • Benetton rely on fully automated shipping andConclusion Information system. • Manages 110 million item a year with only 24 staff members (4.5 million item / Person).
Introduction Low Inventory ConceptCentralComponentsPlace and Hybrid ApproachDistributionChannel Strategy& Management FashionSupply Chain Basics OrientedManagementPostponementConclusion Far East Closer Sources
IntroductionCentralComponentsPlace andDistribution Delayed configuration of final design until the final market destination and/or customer requirement is known. Once it’sChannel Strategy known, the product is assembled or customized.& ManagementSupply Chain Keeping material and styles as generic as possible before finalManagement customizationPostponementConclusion
Postponement Excellent Marketing Flexible Production Information System Design• Vertical Retail Production • Sourcing Integration Store & Supply • Outsourcing• Franchising Logistics Excellent Leveraging Advanced Communication IT System within the Supply Chain Low Inventory