Five Major Supply Chain Challenges That Clothing Brands Have To Face

Although it has only been four months since 2019, retailers around the world have closed nearly 5500 stores.

Many of the struggling brands and retailers are trying to seize the new opportunities brought by the Internet in the digital age.

One of these opportunities is Direct-To-Consumer (direct to consumers, hereinafter referred to as DTC).

The DTC mode means that the brand will not cooperate with the middlemen and complete the whole process of marketing, selling and shipping independently.

In recent years, the US Internet direct selling brands such as Dollar Shave Club and Everlane have adopted this mode.

This mode is no longer confined to consumer goods, but is beginning to move to other industries. From media to health care, we can see the shape of start-ups adopting such models.

At the same time, many mainstream brands and retailers have begun to adjust their strategic focus and increase the proportion of DTC business. Sports giant Nike is one of them.

When we announced the first three quarters of this fiscal year in March this year, Nike group's CFO Andy Campion said: "our Consumer Direct Offense strategy is very good. We will continue to invest in key areas to promote the digital pformation of Nike."

The main contents of the strategy include: focus on online sales, optimize supply chain, and speed up the new product's shelves.

For the major brand retailers, by adopting the DTC mode, they can reduce the number of nodes in the supply chain, simplify the supply chain, and at the same time, because there is no middleman, the profit space is correspondingly higher.

But the DTC model will also bring all kinds of challenges. Here are five points worth noting:

1) comprehensive reform of the existing supply chain.

If companies are trying DTC strategies on a small scale, they do not need to pform their supply chain networks on a large scale.

However, if the strategy is effective and the proportion of DTC channels is increasing, it is imperative to expand the scale of DTC related supply chain.

This means that the entire supply chain network must be redesigned, including warehousing design, automation level, distribution nodes and so on.

2) changes in pport scale

In the traditional retail mode, the major retailers are shipping on a large scale, but in the DTC mode, the quantity of goods shipped each time is much less.

Therefore, the supply chain must be adjusted accordingly.

For start-ups, because their businesses are small and the supply chain is based on the DTC model at the beginning, this is usually not a big problem.

But for those large retailers who want to pform, their supply chain is designed around the concept and demand of mass shipping. Therefore, a large-scale comprehensive adjustment must be carried out in order to adapt to the small-scale and high-frequency delivery mode.

3) evolution of business mode

Many large retailers and manufacturers will invest a lot of money in building new supply chain networks and enhancing automation.

But they rarely invest in predicting changes in customers' external needs (including preferences for product types, shopping channels, etc.).

The capital and time required for the design and construction of the supply chain are very large. If we want to make a pformation according to market changes, it will be very difficult.

Therefore, if brands want to remain competitive in the next 5, 10 or 20 years, their supply chain models must be more flexible and able to make adjustments at any time.

4) increasing the importance of logistics accuracy.

DTC mode, the company's warehouses in all places also need to be adjusted to adapt to the needs of small-scale commodity pportation, rather than traditional large quantity of goods pportation.

Accuracy is especially important when retailers need to pport small quantities of goods to specific locations rather than large logistics centers.

For example, in the traditional supply chain mode, the quantity of goods sent to WAL-MART is usually calculated in tonnage units, so if there are a few products missing, the impact on consumers is almost negligible.

However, in the DTC mode, because of direct interaction with consumers, even the lack of a single product can cause serious adverse effects.

Therefore, how to accurately send a small quantity of goods to the destination and avoid any loss or delay is a problem that must be solved.

Retailers must make adjustments from all aspects, especially the system to track packaging, pportation and arrival of goods must be more detailed and more precise.

5) a rapidly changing market environment

In the absence of middlemen, the responsibility for making adjustments based on market and trend changes falls on the brand.

In the Internet age, even minor things can have a huge impact on the market: a message released by a opinion leader on social media can cause a wave of shopping.

Therefore, in this case, consumers' shopping motivation is more elusive, and retailers must be ready to be ready.

In this era, the supply chain is no longer just pferring products from A to B. They have become an important factor affecting consumers' purchase decisions.

So, like products, they need constant.