As the retail market enters an unprecedented period of rapid change and market uncertainty, there is a growing need for fashion retailers to improve operational control. Furthermore, many are looking to next generation ‘etail’ to leverage a lower cost to market and respond to fast emerging customer demand.
But do these organisations have the time and resources required to extend complex integration between existing point solutions to truly enable multi-channel retailing? Or are the new consumer and economic demands tipping the argument in favour of a single solution tailored to the needs of multi-channel fashion retailers, asks Simon Hanson, Product Management Director, Prologic.
Constant change
Fashion is one of the most uncertain and changeable sectors of the retail industry. Prey to a range of outside factors from the weather to key seasonal trends, fashion retailers also experience uncertain supply and the challenges created by continual introduction of new products to a notoriously fickle customer base.
Many businesses are also fantastically fast changing achieving huge turnover growth in a very short period of time, adding fascias, brands and international outlets to achieve significant expansion. Furthermore, with growing pressure on the high street, online performance is becoming ever more critical to retail success.
Retaining operational control to ensure consistent profitability and customer service in a continually evolving, new and uncertain environment is a major challenge. So just how do these organisations intend to leverage the huge consumer shift towards online purchasing, a move that places huge demands on operational processes and systems?
Integration challenge
Fashion retailers have typically grown organically and, as a result, incrementally acquired diverse IT systems for merchandise management, warehousing and EPoS. However, while these solutions may initially support departmental requirements, the challenge of maintaining integration software to pull distinct systems together adds significant complexity and potential unreliability, creating a high total cost of ownership.
It is also difficult to ensure that each component of the software solution set and integration technology can be adapted to respond to continual business change. Software integration is notoriously difficult and time consuming – especially when it involves systems that communicate in real time. For example, a website that displays stock currently available in a store. To get it right takes time and resources – commodities in short supply in most fast moving fashion retail environments.
Business constraint
Yet while not actively constraining business development, the IT infrastructure could deliver so much more efficiency, productivity and customer service. How many fashion retailers, for example, can truly claim to have real time access to company wide operational performance based on information that is both consistent and accurate. Instead many are reliant upon spreadsheets for information analysis, with the associated productivity overhead and general mistrust of information accuracy.
Furthermore, interface limitations can result in users only having access to the lowest common denominator of functionality between two systems. How many of these businesses have complete company wide visibility of stock moving through a critical path or achieve sophisticated management of stock between sales channels?
Unfortunately, the time and resources required to improve the integration between point solutions can make such initiatives infeasible and unjustifiable. And whilst this inability to support innovation is a minor irritation in times of sustained growth and strong economic markets, in a slowing economy it is becoming far more pressing to improve efficiency, develop new channel strategies and ramp up customer service.
Etail reality check
It is the emerging demand for next generation etail solutions that is tipping the balance away from integration led IT strategies. Fashion retailers are increasingly looking to leverage the growing consumer demand for online sales and the lower cost to market provided by eCommerce to deliver true multi-channel retailing.
However, to be effective and competitive, multi-channel strategies place huge demands on the IT infrastructure. From supply chain visibility and stock management through to integration with retail, effective etail will place a huge integration demand on an organisation reliant upon point solutions.
Creating reliable, robust integration between head office, stock, supply chain, eCommerce and stock systems, all of which need to query each other in real time, is time consuming, expensive and demands significant technical resource.
As a result, fashion retailers are increasingly opting for a single retail solution that can scale up and down in line with the business and enable the rapid change and innovation required in an uncertain market.
Future growth
Using a single product with a single database to manage products, the supply chain, CRM, sales channels and most importantly, a single stock system to support every facet of the business, all the problems associated with point solutions disappear.
Information is stored once, ensuring data accuracy and consistency and excellent performance visibility across the business. Taking this approach, organisations can transform cost of ownership and reduce business risk. And, critically, fashion retailers can rapidly implement the business change – from adding new brands and shops to expanding the online channel – that underpins success in this marketplace.