Article

What are the uses of ERP in the fashion industry?

We live in an era of technology driven change which has very much been adopted by the fashion industry. The way we buy fashion has been transformed: shopping has lost the shackles of the traditional bricks and mortar store, and is now any time and any where. Consumers can choose from a multitude of channels to interact with the fashion retailer from physical stores, mobile apps, QR codes, to social media. The way retailers design, manage, sell, communicate and market products has changed beyond recognition. Our need to keep up is ever more important as we aim to find balance in the key principles of low cost goods, sustainability, flexibility, quality, on time delivery, and speed to market coupled with a loyal customer base. None of this is possible without leveraging the incomparable power of Enterprise Resource Planning (ERP) software.

What is ERP?

ERP is designed to enable a total view of what is going on in an organization at any instance and over time, so you can problem-solve on the ground and plan for improved efficiency in the future. Its main function is to pass accurate, timely information back and forth within a business, between people and technology to prevent miscommunication, speed things up and reveal possible inefficiencies.

In other words, an ERP system for the fashion industry, if managed well, can be the catalyst that allows your business to keep up by eliminating expensive, time consuming, and error-prone interfaces and replacing them with a new and efficient way of working. From the initial concept to the product in-store, ERP can be the hub to keep up with the unknown future changes in the fashion industry.

Benefits of ERP for the fashion industry

Changing consumer landscape and its impact

The biggest impact on the consumer landscape in recent years is the Internet. We have never lived in such fast-changing and exciting times with regards to technology. Consumers are embracing new technology at a rapid rate and expect retailers to keep up. Social media makes relationships between consumer and retailer happen in real-time, and on public forums with trends spreading quickly. Just a single post on social media can have an enormous impact that both increases awareness of a new fashion and creates a wave of demand.

Internet usage and quick stats

We live our lives immersed in the online world. It is difficult to imagine a world without. Let’s have a look at some stats:

Forecast for the future of clothing and apparel

Largest growth rate will come from e-commerce which is predicted to grow by 13.3% over the same period. By 2025 China is expected to be the largest contributor to the apparel market with sales of $550 billion.

Growth predictions vary significantly by region and those with lower growth, namely Europe, U.S., and Japan are saturated and hypercompetitive. Where gaining share from others is the key to growth, consumers are free to migrate between retailers as they please. To gain a competitive edge companies must differentiate products and be consistent in quality and price. Retailers able to embrace the changes with their ERP technology have been able to build in a more agile process and rise to changes in consumer demands.

Changing shopping habits

The digital platform is becoming more personalised and relevant. On-line retailers are investing heavily in technology to reduce returns and increase conversion rates. Smart size help offered in on-line stores, extended by Artificial Intelligence analytics are already able to point the consumer to the right size for them. Even style-related suggestions can be personalised, using analytics that is fed by AI. Using AI in a very targeted fashion company to optimise product suggestions and look into global style and colour trends are already paying off for several early adopter fashion businesses.

During this time of intense changes to the habits and expectations of the fashion consumer, ERP software needs to be ready for what’s happening today and be flexible enough to hook into any future demands.

Trends in enhanced ERP systems for the fashion industry

Current trends in ERP software includes the move toward standardization, cloud-based solutions, and solutions which make it possible to follow the customers’ ways to engage with brands and methods of purchasing their products.

Move towards standardisation

Most businesses wish to move away from custom software development to standardization, which makes it easier to keep up with continuous upgrades. The ever-changing needs make it an inescapable need to upgrade the ERP platform continuously to optimally profit from the latest technology. There are also clear financial benefits in taking advantage of a tried and tested, standardised package. Customisation is expensive, takes time, and puts the risk of implementation with the business.

Move to cloud-based solutions

The on-going move to cloud-based ERP systems for fashion has come with many advantages for the industry and few drawbacks. In the cloud the ERP solution is fully scalable to fit business needs and can very easily be integrated with other solutions, using APIs (application program interface) to link systems even to ERP functionality in apps.

More customer centric approach using data analytics

It is astounding how much data we are collecting as a result of our technology solutions. There is no doubt that Big Data is changing how companies analyse market trends, redefine sales performance and create customer loyalty. The true value will be realised by using a system with data processing and AI capabilities built into the enterprise application.

ERP decisions are critical to the fashion industry

In fashion, each season new collections are produced with sometimes quarterly refreshes and even faster fashion lines, even though this trend is currently shifting because of the challenges raised by sustainability awareness around all consumers. The need to assess and reduce manufacturing costs, define technical details, handle styles with different colours, sizes and fits to be produced makes managing the end-to-end process in fashion incredibly complex. Being able to handle all this information as much as possible in one system or integrated into the fashion ERP means more efficient and accurate business decisions can be made. ERP software needs to be ready for new challenges in the fashion industry coming our way.

Flexible and scalable solutions

The ability to take full advantage of the power of an enhanced ERP system for the fashion industry is to choose a partner who can be as flexible and dynamic as your organisation. In embarking on the implementation, you must outline the growth objectives your company is aiming for, and ideally define a phased implementation approach. Choosing a partner that is in touch with technological trends is of the utmost importance. They also need to be able to guide your business by adopting the change. Managing on-going radical technological changes is very challenging, in whatever business model you operate.

Fit of the garment

Following on from this is the issue of fit, the key area that drives loyalty and reduces the number of returns in online stores. All the size data is held in the specification of the garment and therefore in the ERP system as well and can be made available for the end consumer. We are already seeing quite some initiatives into 3D body scanning, but also 3D designing and prototyping, to improve fit and reduce cost. This advanced size information can be matched with and communicated to the consumer.

Summary and conclusion

In a world that changes direction all the time, deciding on which ERP to choose is often a challenge. Businesses need to take the unknown future into account and the needs of a lot of different types of system users. Choosing the right partner with a good level of experience in the ERP fashion industry to advise you in this decision-making process can help any business.

As a Microsoft Dynamics 365 Gold Partner, Xpedition empowers organisations to thrive

Experts in digitally transforming fashion businesses, Xpedition works alongside your team to deliver innovative thinking and transformative technologies that will enable your long-term success.

Underpinned by Microsoft Dynamics 365 Business Central and K3|pebblestone – our all-in-one business management solution for Fashion has been developed specifically to help you make smarter decisions, faster and gain competitive advantage.

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