Strategy

All Change In Fashion Logistics

In recent years, the fashion industry has undergone a structural transformation. For example, the traditional, European division of seasons into “spring/summer” and “autumn/winter” continues to fade away, giving way to inter-season and special collections. But it seems the drastic change in customer behaviour may be the most critical reason for the transformation of the industry.

Rise of the online shopping

Buyers are less inclined to make their way to stores; they prefer to buy their clothes online. As many as every eighth present under the Christmas tree is bought on the internet, with clothes and technology counting among the most popular items. For online and mail-order businesses, the fourth quarter around the Christmas period sees the highest sales of the year. Almost 30 per cent of annual sales is generated in these three months.

E-Commerce is also stimulated by promotions on specific days, such as Black Friday and Singles’ Day, as well as other discount events. At the same time, big data analytics used by retailers support this trend by creating offers and buying incentives individually tailored to the consumer. Total sales in e-commerce are rising rapidly, while the number of products per order is decreasing: the customer buys less but more often. This leads to an exponential increase in the number of deliveries in the online and mail-order sector. In 2016, the volume of parcels delivered in Germany rose to almost 2.5 billion packages.

The change in logistics

The trend towards ever-smaller units with higher dynamics and complexity has a pronounced effect on the logistics processes involved. As a result of the enormous growth in – and the increasing relevance of – e-commerce, retailers are taking logistics into their own hands again. Up to now, they preferred to outsource these tasks to external suppliers. Ultimately, online and offline sales channels and stocks are no longer maintained in parallel, but instead in a combined manner.

Furthermore, both stores and end customers are supplied with goods from one logistics centre. In addition to this, an efficient returns management system is essential: returned goods need to be available for purchase again as quickly as possible. The return rate in the sector averages 40 to 50 per cent. Another trend is the customer’s expectation to receive their delivery within one to two days. Some large online shops are already offering same-day delivery and delivery slots at times that suit the customer. This means the order must be processed just as quickly in the logistics centre in order to be able to dispatch late orders after 4pm on the same day.

Looking at innovative solutions

E-commerce and the resulting increasingly high dynamics in the internal material flow have changed the logistics structures and present intralogistics providers with new challenges. This is why material handling equipment companies, such as SSI Schaefer, offer customers in the fashion industry products and solutions tailored to their individual needs with the optimum degree of automation. It is critical for the industry to adopt highly scalable system solutions that ensure quick, efficient and flexible processes for internal transport, storage and picking to improve productivity, transparency, and ergonomics.

One particular solution is the Cuby, which is a one-level shuttle system with a flexible design, in terms of capacity and performance, for storing flat goods in bins or cartons weighing up to 35kg. The Cuby can be dimensioned over a length of up to 100m and a height of up to 15m and as many aisles as desired. In this way, it offers the maximum possible storage density, thanks to the streamlined travel paths for the single-deep shuttles and the optimum utilisation of space on the rack lines with double-deep storage compartments, and all with a minimal division of levels.

Another example of a transport solution for bins and cartons or with an attachment for hanging goods on clothes hangers is the WEASEL® automated guided vehicle (AGV). Designed for internal transport operations, the vehicle is both flexible and scalable. As no complex installation work on the floor is required to install the system, pedestrian and vehicle routes – not to mention escape routes – are not intersected.

The next step for the fashion industry

While many retailers think in terms of seasons when selecting products for their stores, fashion retailers have come to change their assortment several times within one season – the traditional “spring collection” does not usually suffice. In order for the employees in the shops to focus solely on sales-related activities, an increasing number of business processes are being relocated from shops to distribution centres. While this previously involved tasks such as hanging goods on hangers, price tagging them and attaching security tags, fashion logistics providers are now required to deliver the goods to the stores in an order that corresponds to the shop layout. This is the only way to sort the goods quickly and efficiently (shop-friendly delivery).

The high proportion of returned goods brings another special feature for fashion logistics: the management of employees when checking and preparing returns. All substeps of what is known as reverse logistics need to be reduced, wherever possible, in terms of the operational logistics requirements using IT-supported processes.

About the Author

Franz Stöger, Vice President of Fashion, SSI Schäfer

Franz Stöger graduated from the Higher Technical Institute with special focus on Mechanical Engineering and has worked for SSI Schäfer Automation GmbH in Graz since 2006. In our new global sales structure for automated system solutions, he was appointed Vice President for the Fashion market sector.

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