The business of fashion requires the fastest, most responsive Business Intelligence possible.
Fashion businesses must be prepared to unexpectedly, and sometimes drastically, change purchasing, staffing, operations, and other strategies. Theirs is an industry characterized by short life cycles, high demand-side volatility, high-cost pressure, and low predictability. All this places great emphasis on management’s ability forecast and re-forecast what the business can hope to achieve, in as short a turn-around time as possible.
In sum, fashion industry firms must be able to remake business planning models in a way that, for example, peanut-butter makers do not. (Unless there is a rare peanut-plant-growing crisis.) Using the right BI tool, will therefore have an immediate positive impact on the business—and here we mean BI (Business Intelligence) most expansively, so that it includes the ability to plan, budget and forecast (Visionary Intelligence). The right BI tool, which can help firms analyze their data, report any way about it, and develop the fastest-changing plans based it, will benefit all sectors of the industry, from manufacturer, to distributor, to retail purchaser.
Style is forever, but fashion is fickle, changeable with the seasons.
Things change quickly in the fashion industry, as the seasonal runway shows make glamorously clear.
Fashion clothing manufacturing offers an obvious example of why an optimal system can make a difference. As current fashion dictates, a manufacturer may need to find new fabric suppliers and put in place new manufacturing processes; alternately—or perhaps along with in-house capabilities—a manufacturer may need to consider outsourcing production. Projected costs could skyrocket before the first blouses and shirts of the season are shipped. Manufacturers need assurances of buy orders even as they learn, in the shortest time possible, how to efficiently bring the latest trends to market. All this points to—actually, will require—a Business Intelligence solution that can integrate widely variable costs into projected pricing and sales models.
While there are canned BI solutions for most industries, what they fail to account for is the kind of wildly varied contingencies that are characteristic of the fashion industry. Which is why, in the end, finance professionals at these firms (and others) increasingly “model and re-model” scenarios in a series of endless linked spreadsheet. At least in Excel you can type in a few figures and see results, and maybe drive a Power BI chart or two. Of course, however, after a short time the capabilities of Excel start to fall woefully short.
Working mainly in spreadsheets is like trying to put on a seasonal Paris high-fashion show in a junior high school basement rec room—maybe it can be done, but it would turn out slow, ugly and unimpressive. Which is, sadly, characteristic of most firms’ decision-support systems. A solution incorporating advanced BI components such as OLATION and PowerExcel will have dynamic access to statutory underlying applications, e.g., existing purchasing, payroll, sales, and ERP systems. Such a solution will enable Finance staff to create new-version scenarios at will, factoring in cost variables along with targeted sales and earnings. Data will flow into models instantaneously from the “back end,” and new plan numbers can be punched in from the front end. Graphs, reports, scenario comparisons, will be in sync, based on “one version of the truth.”
Looking beyond the manufacturing segment of the fashion industry, we can imagine how an optimal BI solution could help a large chain of high-end retail stores: one example would involve syncing databases and other systems in such a way that can enable inventory tracking, including managing shipments. When new collections are ready from manufacturers, they could automatically ship directly to each store, and among stores, ensuring less inventory overhead and lowering costs. Fashion retailers need to operate in just such an agile manner in their unpredictable field.
An analytical database could report past and present purchases, analyzing consumer behaviors, to optimize marketing and pricing strategies for the remainder of this season’s offerings. It is even conceivable that “fashion intelligence” derived from a Business Intelligence system could inform the design and production of the “hottest” style for coming season. (“High-end sales of multi-colored raincoats really took off at the end of the rainy season, so conceivably there will be sustained demand heading into next season…”)
A system that helps manufacturers and retailers lower costs and make sales, and matches product with the right customers—especially in as fickle an industry as fashion—that would be the kind of Business Intelligence solution that never goes out of style!
(This post was originally published on March 11, 2013 and has been refreshed for you reading pleasure.)