Apparel fulfillment, while sharing many characteristics in common with other retail product categories, definitely has some unique aspects that set it apart from the rest of the crowd. For one thing, consumer tastes and fashion preferences change as often as, well, underwear, so there is a great deal of demand fluctuation. It is also a highly seasonal item relative to others, adding another wrinkle into the mix.
To say the apparel industry is highly competitive and in continual flux is a huge understatement. Established brands and retailers face constant pressure from the likes of Amazon as well as Chinese fast-fashion entrants Temu and Shein. The rapidly growing reCommerce trend is also shaking up apparel, appealing to environmentally aware and price-conscious shoppers ā and coming with its own set of logistical hurdles. Leaders like Poshmark and The RealReal are seeing great success in the hot secondary clothing market, and many retailers are jumping on board as well.
Overall, the global apparel industry is expected to see modest growth of between 2% and 4% in 2024, according to a McKinsey report, with the luxury sector growing faster and delivering more profit. Lower consumer confidence levels and declines in household savings are the main headwinds holding back fashion spending.
In addition to competitive pressures and dealing with influencer-driven trends that come and go, apparel fulfillment means a high number of SKUs to maintain across channels, making inventory management more challenging.Ā
According to a 2023 survey of brands and retailers by Coresight Research, the average return rate of online apparel in the U.S. was 24.4%, equating to $38 billion in merchandise value and $25.1 billion in processing costs. This is significantly higher than the 14.5% return rate for the entire industry last year, according to the National Retail Federation (NRF) and Apriss Retail. So mastering reconditioning and reverse logistics becomes hugely important for brands.
Here, in brief, are some of the main challenges that brands face in apparel fulfillment:
Apparel items, including clothing, accessories, and footwear, come in many sizes, styles, and materials. Inventory management of such a diverse product mix requires specialized processes and technologies to maintain stock levels across the SKU base. Navigating the complexity of apparel items, each with its own unique characteristics, makes keeping precise inventory control difficult, impacting the accuracy of order fulfillment.
Upstream from the fulfillment center, product descriptions and sizing guides on the website need to be right on the money. So, even if the order is fulfilled correctly by the associate, the items will still be shipped back with āproduct not as describedā on the return code. Unhappy customers will then tell their friends on social media to avoid the brand or retailer.Ā
Within a distribution center, the variety of apparel items presents challenges in terms of planning product locations based on the facility layout, SKU velocity, and proximity to fulfillment stations. The aim is to maximize efficiency in picking, packing, and shipping.Ā
Speed is the name of the game in apparel fulfillment. Customer expectations are sky-high, as Amazon Prime has set the bar for same-day and next-day delivery. The rest of the industry, therefore, struggles to follow suit, seeking creative ways to ramp up order throughput capabilities in a cost-effective manner.
While speed is at a premium in apparel fulfillment, so is order accuracy. This requires synchronizing inventory management, product location, and order fulfillment strategy. Many facilities, including those of top third-party logistics providers, use technology such as barcode scanners, pick-to-light and put-to-light systems, and put walls to boost associate picking and order accuracy. Robotic systems are increasingly deployed, working alongside associates to pull inventory and convey it to pack stations.Ā
Striking the right balance between rapid order fulfillment and maintaining high accuracy levels can be challenging, especially during peak seasons or promotional events.
As noted, errors in sizing, color, and other factors often lead to apparel returns.
The pernicious shopper practice of bracketing is also a perennial problem, with shoppers growing accustomed to ordering multiple versions of a dress, for example, keeping just one and sending the rest back. For this reason, return policies, once very liberal, have been dialed back by many retailers and brands.Ā
Still, return rates continue to grow despite the greater restrictions. A recent study by supply chain software firm Blue Yonder found that although 89% of retailers surveyed had tightened their return policies, 59% continued to see rates increase.Ā
Apparel brands often struggle to streamline their reverse logistics process, impacting customer satisfaction and operational efficiency. They need to make it a positive, friction-free customer experience while keeping costs down and quickly returning items to stock without significant margin-killing markdowns.
Many apparel brands today sell into retail stores ā sometimes their own as well as partners ā through their own .com site and online marketplaces. This omnichannel approach requires seamless integration of inventory, orders, and fulfillment processes across channels. Achieving visibility while providing a consistently superior customer experience is extremely complex, requiring innovative technology solutions.
For example, omnichannel brands need to determine if they need to set up separate dedicated inventories for retail and eCommerce channels or if they are able to combine them into one pool. This is a more efficient approach but requires a great degree of precision to manage inventory allocation and avoid cannibalization leading to stock-outs.Ā
In a hyper-competitive apparel industry, with its complex supply chain and fulfillment process and disruptive issues like fast fashion and recommerce, brands need a way to gain an edge. In the retail and wholesale channel, for example, compliance guidelines like on-time/in-full delivery (OTIF) must be strictly adhered to for apparel brands to maintain the partnership and avoid fees and penalties.
ShipBots is revolutionizing apparel fulfillment services with a seamless, tech-driven solution. Its comprehensive 3PL services, powered by an advanced technology platform, transform order processing and apparel fulfillment, ensuring accuracy, efficiency, and scalability. With packaging and handling that take extra care to preserve the brand experience, and a network that enables affordable two-day delivery across the U.S., itās no surprise that leaders like Leviās, Wrangler, Rent the Runway, and Chicoās trust their apparel fulfillment to ShipBots.
ShipBots tackles the challenge of product complexity by using specialized handling procedures tailored to the diverse SKU base of apparel brands. With meticulous inventory management, dedicated storage configurations, and advanced order processing, ShipBots ensures accurate order fulfillment, addressing the unique characteristics of size, style, and material. This approach minimizes errors and enhances the overall efficiency of complex inventory and order fulfillment processes in apparel.
ShipBots adeptly addresses the delicate balance between speed and accuracy. Advanced technologies and streamlined processes ensure swift order processing and delivery without compromising fulfillment precision. This approach minimizes errors and reduces return rates. It also empowers reliable fulfillment even when demand increases during peak seasons or promotional events.
ShipBots adeptly addresses the challenge of apparel returns with an advanced process that streamlines intricate sizing, fit, and style-related issues. This ensures efficient handling, refurbishment, and reintegration of returned items into inventory. The result is enhanced customer satisfaction and operational efficiency, contributing to a positive experience and increased loyalty.
ShipBotsās advanced technology empowers brands to seamlessly fulfill orders across channels while maintaining accuracy. Dynamic order routing optimizes inventory utilization and improves fulfillment efficiency. This provides their customers with a unified experience, giving them convenient options wherever and however they choose to shop.Ā
The apparel industry is such a dynamic, competitive space, with so many factors affecting customer behavior and loyalty, including fast-moving fashion trends, seasonality, and more. With all these issues to contend with and more, outsourcing to a qualified 3PL partner removes the stress of managing the complexity of order fulfillment.
ShipBots provides brands with 24/7 access to inventory data to ensure stock levels are maintained, and order processing happens within 24 to 48 hours to ensure customer satisfaction. Weāre continually investing in technology to refine and improve our operations, which have already been proven in our work with some of the worldās leading brands. Want to find out more? Contact us and get a quote today.
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