Digitalization in the Luxury Fashion Industry by Anna Cabigiosu

Author:Anna Cabigiosu
Language: eng
Format: epub
ISBN: 9783030488109
Publisher: Springer International Publishing

5.5 Conclusions

The SNBN is an approach in line with the Maisons need to nurture Millennials and media interest in their collections. This model has a number of strengths: it protects the original content of their design, makes products available when they have peak attention from media, increases impulse sale owing to the idea that there might be many sales following the success of the show and therefore the desired garments could be out of stock, can increase the number of items sold at full price and can impact profit margins.

Nevertheless, the SNBN business model also presents multiple threats and challenges.

Supply chain management difficulties in terms of coordination and extreme compression of collections’ development are crucial issues that primarily explain the above analyzed cases and that require ad hoc competences and relevant resources. Burberry, for example, has anticipated all operations and organizes meetings with the various employees and buyers to coordinate each step. In reality, reducing lead time does not exclusively mean dedicating less time for production, which takes about one fourth of the total time, but requires better coordination of the entire supply chain, particularly upstream suppliers, and better integration of the chain and elimination of downtime owing to new technologies. All these changes require managerial competences and financial resources that often lack in SMEs.

In this setting also ICT competences and technology are crucial for the implementation of the model: it is essential for brands to be hyper-connected on all channels and to establish a robust integrated network of them. Fashion shows should be in real time on socials and should eventually be promoted via the official website or other partners, with projections in the main points of sale and photos of the collections in advance to arouse interest.

SNBN is not simply a marketing stunt which will result in an immediate increment in sales after the show and generate high brands visibility. It is part of a deeper and more integrated process that seeks to involve the consumer, making them live experiences and even leading them to identify with the brand values.

In fact, as discussed extensively in this chapter, the SNBN model contrasts with the traditional production model that follows a make to order sequence: collections’ creation, presentation, sale to distributors, production and delivery to distributors. The SNBN is a make to stock model in which firms produce before receiving orders but still have to respect the deadlines of fashion shows and hence must compress their cycle times and face the risk of sales uncertainty.

While SNBN reduces the distance between the moment in which items are created and sold and the uncertainty related to trends’ volatility (i.e. demand uncertainty), it increases uncertainty about order volumes (i.e. sales uncertainty).

Demand uncertainty is accrued by the fact that the fashion product itself is characterized by short life cycles, high volatility, low predictability and highly impulsive purchases. These characteristics are in contrast with the production lead time which tends to be long. In this context, it is essential for companies to attempt to reduce

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.