Delivering The Fasion Forward


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Material apresentado no Retail's Big Show em Nova York em Jan/09 sobre fast fashion

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Delivering The Fasion Forward

  1. 1. Delivering the Fashion Forward Supply Chain 1/12/2009 4:30 PM - 5:15 PM Spencer Maynard – New Look Retailers
  2. 2. Introduction to New Look Source: TNS Worldpanel Fashion New Look is the 2nd largest womenswear retailer in the UK 940 stores across the UK, Ireland, France, Belgium, Dubai, Kuwait, Saudi Over 37% of all UK women shopped in New Look last year and one third of all customers visit at least once a week New Look is the market leader in Teenage Clothing, Footwear and Denim
  3. 3. New Look Customer Proposition Source: TNS Worldpanel Fashion Great Fashion at Great Prices Brilliantly reactive with a tight stock model and a strong trading mentality Aim to hit the ‘ crest of the fashion wave ’ Newness to the customer is paramount
  4. 4. Fast Fashion Model <ul><li>Fast Fashion now standard in almost all markets – from Clothing to Electronics </li></ul><ul><li>Global media means all countries in touch with the same trends at the same time </li></ul><ul><li>Fashion covers all ages, sizes and lifestyles </li></ul><ul><li>… . It cannot be ignored </li></ul>
  5. 5. Benefits of Fast Fashion <ul><li>Better service customer demand </li></ul><ul><li>Lower levels of commitment – increased working capital </li></ul><ul><li>Highly reactive – deal with economic and trend shifts </li></ul><ul><li>Increased final margin and profit </li></ul>
  6. 6. Two Tier Approach <ul><li>There are only two product types to consider - High Fashion and Fashion Continuity </li></ul><ul><li>Each needs to be treated differently from initial plans and buying processes, right through to performance measurement and store execution </li></ul>
  7. 7. High Fashion <ul><li>Newness #1 priority – front of store change and constant excitement </li></ul><ul><li>Target <25% Markdown spend </li></ul><ul><li>6 week average life of line </li></ul><ul><li>Full price sell through c.75% </li></ul><ul><li>Service Level around 80% </li></ul><ul><li>High levels of Open to Buy and trading flexibility </li></ul><ul><li>Clear poor trends immediately and introduce new product </li></ul><ul><li>Replenish to customer demand – minimise branch stock levels </li></ul>
  8. 8. Fashion Continuity <ul><li>Availability #1 Priority – all sizes expected to be in store </li></ul><ul><li>Target <10% Markdown spend </li></ul><ul><li>20 week average life of line </li></ul><ul><li>Full price sell through in excess 90% </li></ul><ul><li>Service Level around 95% </li></ul><ul><li>Supply chain management and critical path planning key </li></ul><ul><li>Regular analysis of sizes and pack configurations </li></ul><ul><li>Replenish to both customer demand and visual in store requirement – higher stock investment </li></ul>
  9. 9. Replenishment Challenges <ul><li>Traditional systems aim for replacement of sales, building to a set number or a forecast </li></ul><ul><li>This does not optimise scarce stock and can be time consuming maintaining forecasts </li></ul><ul><li>Need to suit short lifecycle product and react quickly </li></ul><ul><li>Chose Quantum Retail Solution </li></ul><ul><li>Micro management at SKU / store level based on intelligent demand forecast </li></ul><ul><li>Low level of user input and maintenance </li></ul><ul><li>Highly efficient management of scarce stock to maximise profit </li></ul>
  10. 10. Merchandise Measures and Strategy To minimum visual levels and customer demand if higher Low – Average 30% initial placement of stock, ability to correct in season Low – less than 10%, with many lines under 5% High – key lines in excess of 95% Target close to 100% (at least 1 SKU per store) Fashion Continuity To customer demand only High - Average 60% initial placement of stock High – under 25% overall, but wide variation by product Target 80% for first 4 weeks only Not important High Fashion Replenish-ment Allocation Markdown target Service Level Availability
  11. 11. Explanation of Service Level <ul><li>Availability is flawed for fashion product – often “out of stock” is a positive </li></ul><ul><li>Service level combines availability with customer demand – how much of our customer demand are we able to satisfy? </li></ul><ul><li>High service levels can be achieved with much lower stock inventory and availability </li></ul><ul><li>On most fashion product, service level target 80-95% </li></ul>
  12. 12. Allocation v Replenishment <ul><li>On High Fashion product, correct allocation is key – more than 50% is initial placement of product </li></ul><ul><li>Constant analytics of size, pack configurations, store profiles etc is vital to maximise profit </li></ul><ul><li>A feedback loop into the planning process is required for future ranges </li></ul><ul><li>Replenishment is a separate process – not A&R but A and then R! </li></ul><ul><li>Replenishment on scarce product needs to best place DC stock to the store with the highest future demand, not the fastest selling or the biggest store </li></ul><ul><ul><li>Getting this alone right can add more than 1% like for like (comp) sales, New Look chose Quantum Retail for this solution </li></ul></ul>
  13. 13. Results <ul><li>Replenishment improvement (Quantum) delivered +1.5% LFL sales increase </li></ul><ul><li>Christmas Trade overall up +2.8% LFL and increase in margin by 1.7% </li></ul><ul><li>Total Group Sales up +14.5% with expansion in UK and Europe </li></ul><ul><li>Market Share Increases to over 5% </li></ul>
  14. 14. <ul><li>Questions? </li></ul>