The retail landscape has
metamorphosed with many brick-and-mortar retailers adding an Internet
shopping-component to their offering says Debasis Daspal
Sudarsana was elated when she found her favorite brand of
fashion item in the shop, and she purchased it. After a fortnight, she was
surprised to receive fabulous offers from the same brand at discounted rates,
that too on her pet accessory items! She was truly amazed to find how the
company knew her tastes and choices.
This is not a fantasy. It has become a reality with
e-retailing in apparel and accessory supply chain. Wal-Mart, K-Mart, Target,
Barnes and Noble, Sears are some of the few click-and-mortar giants. For
example, if a woman spends a certain amount on her favourite lingerie at Sears,
the world-famous retail joint, she will receive notices of any sales on other
fashion costumes. The trick is that when a customer shops using a Sears Card,
details about the purchase and the customer are stockpiled electronically. This
data warehousing permits Searss marketing people to target promotions to a
more receptive group of customers.
True, promotional marketing in the apparel chain has
attained a new dimension with e-tailing, the electronic counterpart of
retailing. Manufacturers and retailers now target consumers directly with
attractive offers. Using credit or charge card to buy clothes triggers clockwork
of activity in retail. These activities range from automatic stock
replenishing, which refills the stores shelves, to alerting a distant manufacturer
to turn out more clothing. However, as manufacturers and retailers more closely
scrutinise individual customer tastes, habits, and buying patterns, they opt
for a direct route to consumers. Instead of waiting for consumers to visit
their stores, retailers may simply send them target e-mails, offering deals too
good to refuse. The rise of automatic customer replenishing as retailers
begin to restock consumers closets, instead of their stores.
Wal-Mart, the worlds largest retailer, successfully incorporates
this e-retailing in its supply chain through electronically enabled stock
replenishment. The result is dramatic. It offers shoppers more than a 98 per
cent chance of finding a complete selection from its diverse collections!
Supply chain strategy is also redefined as a result of going
online. Click-and-mortar retailers have changed their strategy of stocking in
their various warehouses. High volume products, that is, basic apparels whose
demand can be accurately matched with supply based on long term forecasts, are
stocked in local stores. And low volume fashion items are stocked centrally for
online purchasing. The latter products have highly uncertain demand levels and
thus require high levels of safety stock. Centralised stocking in this case
effectively reduces uncertainties by aggregating demand across geographical
location and thus reducing inventory levels. As e-retailing has pushed the
boundary of apparel and fashion business in the forward direction to establish
direct links with consumers, it also integrates the back-end manufacturing and
sourcing operation with real time information sharing about what consumers are
buying. This enables vendors and suppliers to plan proactively in response to
real-time demand. The upshot is that orders are filled quickly; stock is made
as it is needed, and there is no need to waste revenues, as stockpiling unsold
goods in physical warehouses is avoided.
