Fashion & Management

Understand how your favorite fashion brands operate behind the counters !
share on facebook share on pinterest share on linkedin

When it comes to the fashion industry, the whole world could be your potential customer. Everyone buys clothes but the thing that is different in each customer is the type of clothes he/she buys. For an industry like clothing, it is understandable that a retailer has an inclination to satisfy almost all, or at least a maximum number of customer types. Which gives rise to an instinct to target as many people and market segments as possible. However, by doing this the brand’s promotional strategy will never talk specifically to any one group, and it  will most likely turn many potential customers off. A company’s  promotional budget will be much more cost effective if they promote to one type of customer and speak directly to them. This allows them to create a highly focused campaign that will directly meet the needs and desires of a specific group. 

For most fast fashion retailers like Zara, H&M, Forever 21, the target group is in the range of 18-40years old, trend conscious and willing to spend a moderate amount of money. For slow fashion brands like FabIndia, Reformation, etc the target group is usually 30-50 years old, ethical consumers, not interested in fads and willing to spend more for a long lasting garment. Apart from these two major categories, there are many more points and angles which are considered by retailers before targeting a certain group of audience. High end brands like Louis Vuitton, Gucci, Chanel, etc have a target group which understands and values the heritage and standing of the brand image and is thus willing to spend exorbitant prices for the same. 

Once the target audience is decided and the brand is up and running, one of the major challenges is to stay in the game. To roll with the changing trends and keep the customers satisfied. For this, an important aspect is obviously trend research and fashion forecasting. But that is not all! Even if your trend research and forecast is on point and the designs are ready for production, there is one more aspect to be kept in mind. If a brand’s previous stock is not sold out yet, they cannot start displaying the new merchandise. This is when an important pillar of the industry comes into the picture - Inventory Management.

Fashion inventory management is the unglamorous side of a glamorous industry. Inventory Management means making sure that the supply chain is working smoothly. Inventory management supervises the flow of goods/stock from manufacturers to warehouses and from these facilities to point of sale. This process is easier for other industries where trends are not an integral part. But the case of the Fashion Industry is very different. Apparel sales may be booming, but that doesn’t mean it’s easy business. With evolving consumer expectations and an ever-expanding e-commerce marketplace, fashion companies will rely on advanced clothing inventory management strategies to meet demand while keeping stock levels reasonable. When your business deals in trends, styles, and tastes, it’s important to be one step ahead of the demand curve. In the apparel industry, clothing inventory management has unique challenges. There are  strategies unique to apparel inventory management that fashion retailers must consider.

  1. They’ll need to quickly unload items that are dipping in popularity and be ready to rapidly order next season’s (or next month’s!) trendiest items. 

  2. Stock-outs can negatively impact a customer’s short-term and long-term behavior towards a brand. Thus, brands need to make sure they have stock of various colours and sizes ready for purchase

  3. When a new trend comes in the market, the buyer must be smart enough to predict how long it will last and thus place an order for merchandise accordingly. 

  4. When there is stock left at the end of the season, the merchandiser should start giving deeper discounts on the garments which are not being picked up to quickly make space for new styles.

All these points are regarding a single inventory location. But any brand does not have only one store, and thus only one location for stock-keeping. 

If you’re running an omni-channel brand, and you’ve got several brick-and-mortar locations as well as an online store. This gives rise to another decision to make - that is which stock is supposed to be kept where. Thus, there’s an opportunity to further optimize your fashion inventory management. In some cases, you can even move inventory you originally dismissed as obsolete. If you notice that a specific garment is more popular in your physical locations, consider allocating more of those items to the store floor. Even among your physical locations, there may be variations between different geographies. Perhaps your downtown location sells out of one item faster than your suburban location. Analyzing your data in a granular fashion allows you to more effectively allocate inventory. This helps the customers to relate to the store better in their location and also drives sales. Not only that, it eliminates the cost of re-transporting merchandise which did not sell in a particular location due to absence of this analysis. Meeting consumer demand correctly is Do or Die. For example, traditionally, H&M has focused on stocking its thousands of stores around the world with the same merchandise. Now, it’s using big data to customize its offerings at every store to provide experiences tailored to meet geographical trends. 


The fashion industry is ever changing. There is no telling when a fad or trend might emerge or even end in the fast moving world we live in. The buying and stocking plans of a particular season have to be started months before the stock actually goes to the stores for sale. So there is always the possibility of a new trend emerging within this time period. The Open to Buy system is the solution to this problem. In this system, the buyer buys a certain portion, say 10% of the entire stock just a few weeks before the launch of the new season. The designs go into fast production and the merchandise is ready to sell! This portion costs a little more than the rest of the stock but if carefully chosen, it also results in higher profits as it is the most trendy merchandise available in the particular store.


Apart from unloading the stocks and emptying space for new merchandise, one other important point to keep in mind is organization of the stocks. In the Fashion Industry, a season is about 3-4 months long. For these 3-4 months the stocks in the inventory need to be organized well enough, that when a particular style or even a single piece is needed, the process becomes simple and efficient. There goes a lot of time and manpower in storing and sorting the merchandise. If the system is not efficient, then a lot of time and effort will be wasted in procuring a segment of the stock. Meanwhile, there is a high possibility that the customer might take their business elsewhere. This will affect the customer relationship and brand image too; apart from the monetary loss. 

There are certain methods and ways to optimize the stock-keeping process, out of which the ABC method is used widely. For this you need to prioritize your inventory. Categorizing your inventory into priority groups can help you understand which items you need to order more of and more frequently, and which are important to your business but may cost more and move more slowly. Experts typically suggest segregating your inventory into A, B and C groups. Items in the A group are higher-ticket items that you need fewer of. Items in the C category are lower-cost items that turn over quickly. The B group is what's in between: items that are moderately priced and move out the door more slowly than C items but more quickly than A items.




JIT is a method which is used to optimize the stock keeping process. In this system, the merchandise is scheduled to arrive exactly when it is needed to be transported to the stores for display. This eliminates the stocking costs and time and enables the company to quickly unload the stock from the inventory and transport it. This also helps in eliminating any defects or damages or even loss of merchandise which take place during the stocking period. 


share on facebook share on pinterest share on linkedin

No Saves yet. Share it with your friends.

Write Your Diary

Get Free Access To Our Publishing Resources

Independent creators, thought-leaders, experts and individuals with unique perspectives use our free publishing tools to express themselves and create new ideas.