The UK fashion industry has seen its fair share of unprecedented events these past few years. With the fallout of COVID for luxury brands, new sustainability legislation impacting the fashion supply chain, and the decline of once-mighty online fashion retailers all hitting the industry in quick succession, it’s been tougher than usual for businesses to keep up.
One lesson that is being learned with all these changes is how to manage inventory effectively and responsibly. With overstocking and wastage causing large blows to the growth of UK fashion businesses during these times of trouble, the industry is now embracing effective fashion inventory management to control their overall stock levels and prevent further losses.
In this article, we’ll be exploring what fashion inventory management is, how inventory management works within the UK fashion industry, and how to manage inventory effectively in your fashion business.
The Evolution of Fashion Inventory Management
Like all areas of the industry, fashion inventory management has benefited heavily from the growth and significance of technology. Traditional methods of handling inventory usually involved a paper-based system, where data would be written by hand and manually reported on every year.
As omnichannel sales and e-commerce rose, however, so too did the need for technology to accommodate growing demand. Faster trend cycles also made overstocking and product waste more common, as it was becoming increasingly difficult for brands to keep up with the needs of their customers.
Technological tools like ERP systems and RFID technologies became a necessity for brands who wanted to stay afloat, offering innovative solutions like real-time data and demand forecasting through reports as well as tools to help with wastage.
These tech platforms changed the UK fashion industry’s view on how inventory management works, and how it could be effectively utilised to increase profitability.
Key Benefits of Real-Time Inventory Management for Fashion Retailers
Adopting real-time data tracking in favour of manual processes is key in today’s world for effective fashion inventory management. Among other benefits, real-time inventory management can provide:
- Improved accuracy: By automatically counting your available to sell (ATS) stock, future stock, and inbound goods, real-time data tracking can reduce the frequency of stockouts and increase visibility across your entire fashion business.
- Enhanced customer satisfaction: Reduced stockouts from real-time data mean better product availability and a greater number of sales overall. Faster responses to market trends also allow businesses to keep up with consumer demand.
- Cost reduction: Through optimised stock levels comes less wastage and a lower risk of overstocking, so businesses only buy what they need, as and when they need it.
- Data-driven decision making: Demand forecasting for buying and merchandising is more accurate through real-time data, and you can easily report on your bestsellers and seasonal stock levels year-on-year.
Overcoming Implementation Challenges
One of the largest challenges that has faced the UK fashion industry in recent years is uncontrollable levels of overstocking. According to a 2022 report by Unleashed, UK fashion businesses were forcibly encouraged to stockpile goods during the COVID-19 pandemic, leading to as much as a 57% increase in stock levels compared to their pre-pandemic numbers.
This unprecedented stockpiling caused major issues in cash flow and profitability, pressuring many UK fashion businesses to adapt in order to survive. Learning how to manage inventory effectively became easier once real-time data tools and fashion inventory management systems were implemented, but a lot of the industry is yet to catch up.
A middle-market retailer – now one of the UK’s most recognisable brands – did adapt favourably to this shift, however. By using fashion inventory management tools and data analytics to monitor real-time sales, they could easily access omnichannel reports throughout their business and use these metrics to continue expanding in times of crises.
Efficient fashion inventory management also allowed for quicker adjustments in production, in favour of what was selling well. This allowed the retailer to consistently provide designs that the consumer wanted to see, without negatively impacting stock levels.
Best Practices: How to Manage Inventory Effectively in the Fashion Industry
Understanding how inventory management works is only half the battle for fashion businesses. In order to fully guarantee success, it’s important to implement the best practices for managing inventory effectively.
Leveraging Data Analytics
There’s no use gathering real-time data if you’re not using it to your business’s advantage. The most successful fashion retailers will leverage the data they receive by using it for accurate demand forecasting.
Using fashion inventory management tools to analyse bestsellers, report on seasonal stock levels, and understand industry trends can help brands understand their customer base better, leading to a more organised and well-thought out production line with an awareness of what works.
Implementing Omnichannel Inventory Visibility
While traditional methods of fashion inventory management may have once sufficed for singular, physical clothes shops, today’s markets rely heavily on omnichannel brand presence.
Automated inventory management tools make it much easier for brands to have visibility of how each entity is doing across the board – from ecommerce to international stores.
Training Staff to Maximise System Benefits
What is a steady fashion business without the knowledge and skills of expert staff? Training your staff on how to manage inventory effectively can be the difference between a well-managed supply chain and a lot of unanswered questions.
The right fashion inventory management platforms will often provide complimentary training sessions to help you and your staff get up to speed with all the solutions you can implement.
The Future of Fashion Inventory Management
Even with the rapid changes that have occurred in the last few years alone, fashion inventory management is continually evolving. In order for UK fashion businesses to stay ahead of the curve, it’s important to be aware of what’s out there and how it can be effectively utilised.
Emerging technologies like AI, IoT, and blockchain are all contributing to the future of fashion. AI algorithms in particular have become increasingly useful for demand forecasting, while intuitive systems like barcodes and scanners have become integral to any kind of stock counting across the supply chain.
Time will tell which innovations will stay and which will go, but it’s clear that technology will be taking a front seat in fashion inventory management for a while to come.
Conclusion
From improved accuracy and cost reduction to improved decision making and customer satisfaction, the benefits of real-time inventory management for fashion businesses are immensely clear.
For the UK fashion market in particular, utilising tech solutions like ERPs can help steer brands through the ever-changing landscapes of the industry. If you’re an emerging fashion brand wanting to change your business operations for the better, Zedonk’s intuitive inventory management solutions are just what you need to get started. Book a free demo here to find out more about how we can help you.
