The financial success that companies, such as Inditex and H&M, have achieved through a ‘fast fashion’ strategy has led other apparel retailers to seek to imitate their business model. This white paper outlines what makes fashion ‘fast’ and the role transportation plays.
As with any successful business strategy, fast fashion starts with a compelling value proposition: fashionable items at affordable prices. More affordable than the catwalk collections that set the trend for the season. More fashionable than the traditional apparel retailers but at a comparable if not lower price point.The pioneers and their followers have achieved this compelling value proposition through building a business model thatminimizes the trade-off between speed and cost. Fast fashion is also a business model in which supply chain activities, such as design, sourcing, production and distribution, are more synchronized with the retailing front-end through:
- Dynamic assortment planning
- Quick response design, production, purchasing, distribution
- Discipline at sticking to a critical path calendar
Dynamic Assortment Planning – Fresh, Affordable & Available (but not for long)
At the consumer facing front-end, the fast fashion business model is based on four pillars that mutually re-enforce customer behavior:
- Fresh Assortment
- Scarcity through limited quanities
- Affordability
- High number of stores
Quick Response Design, Production, Purchasing, Distribution
Quick Response (QR) is the apparel industry’s equivalent to just-in-time and lean production techniques used in other industries. QR is used to shorten the time needed to propose, design, source, make, and deliver styles. Traditional apparel retailers use QR techniques to shorten lead times, but retained the traditional seasons. Fast fashion companies evolved QR techniques to shorten lead times even further and to de-emphasize the traditional seasonal calendar and support dynamic assortment planning.
Calendar Discipline & Transportation
A fast fashion business model only works if each new style and order progresses through the supply chain timely. There are no buffers. Any delay in one stage of a fast fashion supply chain can create even greater stress and cost in a subsequent stage than in a traditional retail supply chain. Additional costs don’t just erode margin, they undermine the value proposition a fast fashion businesses is based on – fresh and affordable fashion. Just distributing and transporting the product faster will not yield the same financial results.
