For an industry thought of as creative, fashion retail is completely data-driven. At every level from design to fulfilment, fashion retail processes rely on data. A lot of data.
High volumes of data create operational risk, inefficiencies and hidden costs. These issues reduce profitability, slow down decision-making and increase operational overheads.
One way to resolve this is to implement Enterprise Resource Planning software (ERP).
We worked with London-based fashion brand Rixo to help them implement a NetSuite ERP customised to meet the needs of a multi-million-pound fashion business, so we know exactly how much support a correctly configured ERP can provide.
In this post, we’ll share some of the lessons we learned with this project and show just how much an ERP solution can help businesses in the fashion and retail industries.
Enterprise resource planning software is a centralised platform working from a single database that integrates finance, inventory, supply chain, sales, marketing and customer data into one system. This removes the need for multiple systems serving different areas of your business, and brings all your operations together.
For fashion retailers, ERP connects:
Businesses in the fashion industry face a number of specific data challenges. The volume, complexity and speed at which data is created all make data management complex – but it’s also a vital part of business practices. Some major issues include
These peculiarities of the fashion industry mean even small businesses need to be able to access and analyse large volumes of data, and also that this data must always be up to date.
Below are other complications arising with fashion retail data that can generate unnecessary costs or labour.
In all types of eCommerce businesses, there is often a reliance on a number of separate systems, such as point-of-sale (POS), finance, inventory, and warehouses. All these systems need very specific functionality for their role. And they will all handle large amounts of data.
Drawing that data together into one place makes it far more usable, more accessible and easier to understand.
But trying to bring multiple data sources together manually holds the potential for disaster. Mistakes being made during input and duplication that wastes time and storage, can all cause spiralling problems. In fact, an inefficient unification process can cause more issues than it solves.
Using our Rixo example, before implementing NetSuite, the business was reliant on a mix of Google Sheets, Slack messages, WhatsApp and QuickBooks, which led to errors and inefficiencies and made managing international growth and tax compliance difficult.
In fashion retail, inventory is one of the most challenging factors to manage. Poor visibility or management can lead to:
It’s vital to have a real-time and accurate view of all available stock, how it is selling and if it is being returned. But even this is complicated in fashion retail.
Stock can be spread across a number of warehouses, store locations, concessions and even third-party fulfilment partners. Online and offline sales channels can be competing for the same inventory. And all this can become even more challenging if you’re in the fast-moving fashion world, when demand can be unpredictable, and items can unexpectedly fly off the racks for weeks, then stop moving completely when the season changes.
An ERP system solves all these issues by providing live, cross-channel and cross-location inventory data in a single dashboard.
Another issue that can arise from such volatile seasonality is poor demand forecasting.
To predict what will sell, you need access to accurate and in-depth historical data. Combined with current sales performance, this is how you spot emerging trends or unexpected spikes so you can capitalise on them.
Outdated reports, incomplete datasets and data that is fragmented across numerous systems limit this ability. They leave you relying on guesswork, undermining the effectiveness of your entire sales process.
Disconnected systems also mean that reporting processes have to be done manually. This vastly increases the time they take and also reduces their accuracy.
At scale, important month-end closing can take weeks. Reconciling transactions across siloed sales channels, inventory systems and payment platforms takes excessive effort – and time. This is far from ideal in the fast-paced fashion world.
Any added reporting time delays the insight you need to make informed decisions reactively. If you’re unable to understand your margins, profitability and the success of promotions or markdowns, you can’t decide how to maximise them.
Many fashion retailers work across multiple channels. You’re no longer limited to physical locations, or even just your own online store – online marketplaces and third-party retailers are often vital channels.
But customers expect a consistent experience across all of these channels. Delivering this experience relies on consistent, connected data across pricing, promotions, inventory and customer records.
If your data is split across multiple systems, your customers get a fragmented experience. This is damaging to customer loyalty and can even limit sales.
Understanding the many issues that can arise with data in fashion retail can be alarming. There is so much scope for missed opportunities and wasted budget. Luckily, many of these issues are also easy to avoid if the correct systems and processes are in place. Systems like a customised enterprise resource planning (ERP) solution.
RIXO
Retail
An ERP solution is one of the most effective ways for fashion retailers to overcome data challenges. It brings together all the aspects of your business to streamline your management and improve your visibility. Here are some specific ways it can help:
ERP brings together all the core operations of your fashion retail business into one integrated system, a “single source of truth”. It connects finance, inventory, supply chain, order management, product data and customer data, improving data integrity and making live data more accessible.
This reduces manual processes and duplication while also increasing accuracy.
When you can access accurate inventory data, you’re able to manage your stock levels better. As well as reducing the chance of stock running out unexpectedly, you’re also less likely to end up with excess stock
While selling out of items can cost you as a lost opportunity, even overstocking can cost. Excess stock will waste space while it’s stored, and will likely be sold at a significant loss if you have to mark it down to sell it.
An ERP collates your stock data across all channels and all locations in one place, giving you complete, real-time visibility across the board. It can be set up to monitor levels, so that you always have the optimal amount of stock available.
Centralised reporting via an ERP also increases visibility across your finances. It makes reporting quicker and more accurate, and also makes it easier to comply with legal obligations such as tax demands.
This is important as fashion retailers often operate across multiple channels and also in multiple locations and countries. An ERP automates financial reporting, helps you manage that scale of data and ensures you remain compliant with differing tax obligations and recordkeeping processes.
With ERP’s access to reliable, real-time insights, you can move from reactive guesswork to proactive decision-making.
Rather than waiting for reports to be compiled at set intervals or at a delay from request, an ERP ensures you always have access to live data. This allows you to assess performance, identify changes and respond proactively.
Fashion retail businesses are rarely static, and their growth can be sudden and significant. An effective ERP scales with you, so that strategy changes are data-led and growth is kept sustainable.
Managing higher volumes of transactions, new product lines, additional channels and even international expansion is a lot easier with a scalable ERP platform to rely on. It gives you a stable system that grows with you without the need for repeated system replacements or workarounds.
An ERP doesn’t just benefit your business behind the scenes – the customer experience improves too.
As stock availability becomes clearer, fulfilment becomes more dependable. This improved experience builds positive relationships towards your brand.
This is particularly important in fashion retail, which is often an omnichannel environment where customers have high expectations around flexibility and transparency.
An ERP can even help you innovate your own offering for customers’ benefits. With simplified systems and streamlined processes, options like pre-orders, try-before-you-buy, and extended seasonal return windows become possible.
With a focus on automating processes, integrating platforms and improving decision-making, we customised a solution tailored to Rixo’s specific needs:
The result? Reduced order errors, faster fulfilment times, improved warehousing operations and greater financial accuracy and compliance.
Implementing a customised NetSuite ERP can help your business achieve a more structured, scalable and streamlined way of working. With enhanced analytics and automated workflows, you can cut down on staff time and improve your visibility across your business operations.
Ready to eliminate data silos and grow your fashion business? Speak to our ERP specialists to discover how a customised NetSuite solution can transform your operations.
