3 reasons why fashion brands need flexibility in fulfilment
Here at Spark Response, we use the word flexibility a lot. Mostly because that’s what we offer, in abundance. But why is it so important to fashion brands and retailers? Lets look at an example of how flexibility can help boost sales, efficiency, and reduce costs for those emerging fashion brands.
1. Managing Sudden Demand
Kate owns an emerging clothing brand, sales are fairly consistent at around 150 orders per day from around 500 SKU’s. Kate employs a warehouse team to manage her own rented warehouse, which runs at around 90% fully occupied throughout the year.
It’s Monday morning, the marketing team have just barged into Kate’s office to announce one of her jackets has been featured in Glamour Magazine. That afternoon, she receives an additional 1000 orders of these jackets via her eCommerce store. Luckily, they’re in stock. But it’s going to take up to 8 days just to get these orders fulfilled with the level of staff and facilities Kate has. Customers won’t be happy.
So what are Kate’s options? Well, firstly she could reallocate staff within the warehouse, to get more pickers and packers. She can offer overtime to staff to reduce this delay, or she could hire temporary warehouse staff to boost resource.
In every case, there are downsides. Reallocating staff will reduce performance of other warehouse areas, goods in may be delayed reaching the pick face, stock replenishment may also be delayed, possibly affecting stock availability via the website. Offering overtime to staff is probably the best bet, but this obviously adds cost, and will reduce the margin made on the sale of those 1000 jackets. Hiring temp staff is time consuming, and possibly expensive. Unless there is a bank of regular temp staff who know the operation, this probably isn’t a viable option.
Where flexibility can help
In this case, having a flexible e-fulfilment warehouse allows brands to meet demand for unforecasted sales. Here at Spark for example, handling increased demand on a daily basis is the norm. As we’re a multi client environment, we can simply allocate our warehouse team across the various clients we operate. An in house warehouse may not have this ability to react so quickly, and without adding cost.
2. Managing Sales Growth
Lets say that following the feature in Glamour Magazine, the Sunday Times Style Supplement then features Kate’s skirts. Another 2000 orders follow suit, and quickly, daily orders rise to 350 consistently. What does Kate do now? Keep paying overtime, employ more warehouse staff? Again, both of these come with added costs. What if that demand decreases again in 2 months time?
Where flexibility can help
Having a flexible fulfilment operation allows brands to manage this increase in daily orders without increasing overheads on staff, or equipment. At Spark Response for example, we manage daily order volumes from anything as low as 1000 per day across our clients, to as many as 20,000. Our clients simply pay for their activity, not for the staff that work on their campaign. This variable cost model can save a huge amount compared to staff overheads.
3. Managing an Expanding Product Range
Kate’s fashion brand has had a good year. After featuring in various fashion magazines, order volumes have jumped to 500 per day. Kate’s employed more warehouse staff to cover this demand, adding to her overheads. But now wants to add a new range of handbags and accessories to her product range. Problem!! The warehouse was operating at 90% of capacity 6 months ago, long before the increase in orders. Kate simply doesn’t have the space to store a new product range. She wants to grow the business, but she’s now constrained.
Kate does have options. She could remove some of her product range to cater for the new lines. She could rent an additional warehouse, and move stock across two units. She can move out of her current warehouse and into a bigger facility. She could even buy a new warehouse.
Where flexibility can help
In each of the above options, costs could spiral. Renting an additional warehouse causes logistical problems. Lets say there happens to be a new warehouse available next door to her current unit. That’s the ideal scenario, but having stock located across two units will still add time to the order fulfilment process, and possible complexity. It’s certainly not the most efficient scenario. Renting a bigger warehouse would seem to be the most logical step, but the cost of setting up this new warehouse with additional racking, shelving, IT and systems can incur huge set up costs. The same applies to buying a warehouse, that’s even before you add the cost of the purchase itself.
By outsourcing fashion e-Fulfilment, Kate can simply increase her storage capacity at the fulfilment company, without adding any additional fixed costs. This allows Kate to add an almost unlimited number of additional products to her range. With a variable cost model, an order fulfilment company will simply charge by the pallet stored, rather than per product. This allows Kate to add new lines as often as she’d like.
It’s clear that a flexible fulfilment operation, led by an outsourced partner offers many physical benefits to fashion brands and eCommerce stores. You can learn more about our Fashion e-Fulfilment services here. See what we can do to help your fashion brand.