Manufacturing Insights prophesies that “by the end of 2020, 50% of all manufacturing supply chains will have the capability to enable direct-to-consumption shipments and home delivery.” It is a prediction that sounds plausible, especially since the idea of “see now, buy now” seems ideal, but why is it that brands, like ex-Jimmy Choo CEO Tamara Mellon’s shoe line, that adopted this seasonless schedule failed? Could it be like Mellon said that the customer was ready, but the fashion industry wasn’t?
Retail experts do not seem to think so. They are reporting that direct-to-consumer (or D2C) companies that ship products in small quantities rather than truckloads are actually disrupting the retail sector. Cutting out the middle man seems to be the ‘in’ thing at the moment. It is giving birth to a generation of D2C brands. The good news is that they are not the only ones disrupting; luxury brands are also using D2C’s potential to transform high-end retail. It is a concept that has been experimented by brands like Tommy Hilfiger and Tom Ford.
Direct to consumer pushes the rules of fashion and changes consumer preferences and expectations by maintaining end-to-end control over the making, marketing, and distribution of products. Simply put, they skip wholesale and instead use an infrastructure that allows them to grow fast and connect immediately with their customers. It is a change that has put consumers in the driving seat. D2C is also changing how brands’ develop their relationships with their customers. They are doing this by adopting a different approach and becoming more about understanding the experience, data and insights which in turn helps them take care of their customers’ evolving needs.
When it comes to whether direct-to-consumer can fix fashion’s ‘broken’ supply chain, I think it all comes down to brands taking a moment to rethink the retail model. This will allow them to make significant changes to the supply chain, manufacturing and logistics operations and refine processes so that they can create more product on demand, more in line with their drops-driven, season-less model.
Although it is difficult for any fashion company to be 100% vertically integrated, it is imperative that retailers and manufacturers continue to evolve. The willingness to move with the times can lead to manufacturing upgrade shrinking working capital and increasing cash flow by minimising leftover inventory. It is a strategy that requires brands to re-engineer existing infrastructure that can be easily adjusted- which in turn delivers new challenges and significant implications for supply chains.
The way forward is for fashion brands to build their supply chains to support new channels better. This will allow them to find new ways to serve their customers. Also, it is essential that the brands have the kind of supply chain that will enable them to execute processes with precision. The result will be a seamless process improved by the type of technology that will ensure that their supply chains are equipped to address changing customer demands.