E-commerce is the future of shopping
Online shopping has risen steadily over the last decade, and the Covid-19 pandemic has given it an unprecedented push. According to Digital Commerce 360 estimates, consumers spent $861.12 billion online with U.S. merchants in 2020, which is a 44% increase year over year. The publication states this is “the highest annual U.S. e-commerce growth in at least two decades. It’s also nearly triple the 15.1% jump in 2019”. Worldwide, retail e-commerce sales grew by a staggering 27.6% last year. In 2021 there is a further projected 14.3% growth according to Prolific North. In 2020, COVID-19-related boosts in online shopping resulted in an additional $174.87 billion in e-commerce revenue. Statistica predicts that e-commerce revenue will surpass $638 billion in the U.S. by 2022.
While e-commerce popularity grows, brick-and-mortar shopping continues to decline. Department stores have been on the decline for a few years now, and the pandemic sped up the process. In 2019, retailers in the United States announced 9,302 store closings, a 59% jump from 2018. While the coronavirus pandemic had a negative impact on in-store shopping with retailers closing and states issuing stay-at-home orders, this opened up an opportunity for sales through another channel – online. During quarantine, consumers began shopping online at an unprecedented rate, purchasing food, puzzles, athleisure clothes and anything in between. While vaccinations have begun to roll out across the country, officials warn the virus may not be going anywhere anytime soon, and consumers are expected to use e-commerce as their first choice for shopping. According to a recent Prosper Insights & Analytics Survey, nearly 47% of adults have changed their shopping behavior because of public health concerns.
As consumers trade in retail stores for online, it is more important than ever for companies to have strong e-commerce platforms if they want to survive. Amazon, a digital retail giant, is projected to hold the top spot for web sales in 2021. While most companies don’t carry the same vast and diverse inventory as Amazon, there are other things that drive the e-commerce behemoth’s peerless success in the digital market. A few to focus on are: fast site speed, a simple checkout process, strong customer support technology, easy returns and reliable management software.
Strategies to ensure customers have an optimal shopping experience
For companies looking to transition from retail to e-commerce, the optimal shopping experience is essential. This includes speed, accessibility, and accuracy.
Optimize your site speed
For online consumers, speed is essential in the shopping process. Often, online purchases are driving more by impulse and/or convenience than careful planning and analysis, and companies can quickly lose a frustrated customer to a faster competitor’s site. According to Google’s mobile page speed study, a site’s bounce rate ticks up every second a visitor waits for a page to load. The future of fashion is digital, and optimizing site speed is critical. A study by Skilled found that:
- Of those studied, 79% of shoppers that were “dissatisfied” with a site’s performance were also less likely to buy from the retailer’s site Consumers have high expectations for their online buying experience as they still typically prefer the in-person shopping experience. While a bad site performance can steer shoppers away from a retailer, that does not mean they will avoid their brick-and-mortar store.
- 64% of smartphone users expected a website to load in four seconds or less.
- 47% of online shoppers expected web pages to load in two seconds or less
Another Skilled study found that web speed improvement of mere seconds could generate thousands of dollars daily for companies. Clearly, every second counts in e-commerce. Tips for retailers looking to optimize site speed include:
- Using a fast e-commerce platform
- Finding a reliable hosting provider, and
- Reducing pop ups on product pages
Shopify, a well-known e-commerce platform, offers many suggestions and solutions to improve performance. To manage e-commerce successfully, it’s also important to use a POS that can sync with a back end ERP system which consolidates information and ensures a good customer experience with ease of use and speed.
Make the checkout experience simple and secure
Checkout is another essential part of the shopping experience for the consumer. As mentioned above, it is important for customers to be able to check out easily and quickly online. To do this, companies need a good e-commerce platform that is intuitive for both customers and the employees who manage it. When a great e-commerce platform also integrates with an ERP that tracks inventory and production in real time, consumers are able to know when products will be available and can have accurate and realistic expectations on when to expect delivery. This level of integration eliminates frustration for customers and ultimately leads to a satisfied repeat customer.
Use technology for efficient customer support
Good technology is essential for companies transitioning to online. Not only does it help connect sellers and customer on mobile and web platforms, but also enables the effective management of customer orders, deliveries, returns and payments of purchased goods. Technology plays an essential role throughout the e-commerce value chain, and finding the right technology for your company is indispensable.
Having reliable management software
When shifting from primarily retail to e-commerce, companies must prioritize speed and customer experience. To do this, companies need a strong supply chain supported by modern technology. An inefficient supply chain or poor visibility into supply chain stages can make the difference between profitable growth or business failure, especially when transitioning to online sales. Only by leveraging technology to increase efficiency and visibility throughout the supply chain can companies remain competitive in this primarily digital era.
By combining leading innovation in PLM, Shop Floor Control, ERP, EDI, WMS, Third- Party Manufacturing, and Vendor Portals, Exenta has created the most sophisticated end-to-end, complete Supply Chain Management platform for the fashion and soft goods industry. Up and down the supply chain, Exenta’s Supply Chain solution suite improves digital communication and collaboration between fashion brands and supply chain partners including suppliers, 3PMs, warehouses, and retailers. Real-time visibility across the entire supply chain helps continuously optimize operational decisions, improve agility, and balance competing demands for cost, speed, and quality.
Keep your competitors guessing and have a high-performance e-commerce platform using Exenta’s state-of-the-art manufacturing and production software. Request a demo today!
The Covid-19 pandemic: The unanticipated transformation of an industry
Covid-19 has had an unforeseen and unprecedented impact on the fashion industry as a whole. Clothing sales dropped by nearly 34% in March of 2020 as the pandemic spread across the United States. Consumers cut their spending and began shifting their buying behavior to adhere to new lockdowns and restrictions. Like most major disruptions, this is pushing the limits of industry resilience. The clothing and fashion management software industry is subsequently having to prepare and evolve for the future. Technology has made a massive impact on the fashion industry, and the Covid-19 pandemic has only increased the importance of implementing new software throughout the design, manufacturing and distribution processes.
The rise of technology in fashion production and manufacturing
Labeled by Forbes as “a so-called ‘black swan,’ COVID-19 has exposed a fundamental weakness in the traditional fashion system: matching supply and demand.” With overproduction rates running at 30-40% a season, the fashion industry is quickly realizing the usual way of doing things is no longer going to cut it. While overproduction is costly, it is also damaging to the environment, and consumers are growing increasingly aware of the negative impact on the planet the fashion industry can have.
To cut costs and keep up while reducing their environmental impact, companies are looking to technology. One trend the industry is heading towards is the end of the traditional fashion season. Speed is critical to fashion brands, and this operating model can lead to companies being behind on trends and stuck with large amounts of inventory each season. Fast fashion giants such as Zara and ASOS have been operating with this model for years, and it is quickly becoming an industry norm. No longer do consumers want to be restricted to shopping based on seasonal production, and in order for companies to be successful operating without seasons, they need constant and accurate reporting using a trend forecasting software. Another trend is the industry going digital. As consumers continue to shop primarily online, it is becoming a necessity for companies to have strong e-commerce platforms.
In 2019, there were an estimated 1.92 billion digital buyers, and eCommerce sales accounted for 14.1% of retail purchases worldwide. In 2023, eCommerce retail purchases are estimated to increase from 14.1% to 22%. With the rise of the Covid-29 pandemic, that number is expected to keep going up.
However, a study by First Insight Report noticed that while e-commerce is on the rise, consumers still tend to spend more in-store than online. The study found that “71 percent of all shoppers surveyed spent $50 or more when shopping in-store. This compares to only 54 percent of respondents spending more than $50 when shopping online.” This means that while it is easier and more popular now than ever to shop online, consumers still gravitate to that in-person shopping experience. In order for companies to keep this unique experience while industry trends shift away from in-store shopping, they need technology.
Why the future favors software in the fashion industry
A Sourcing Journal article discussing the future of fashion manufacturing states that “apparel and soft goods factories are beginning to see technology and automation as a gateway to future survival.” As online shopping booms and the importance of a strong e-commerce platform grows, companies are replying on production and manufacturing advances such as 3D technology, Artificial Intelligence (AI), EDI, ERP and PLM software.
As we look to the future after Covid-19, we see a more digital in-person shopping experience. AI and 3D software will allow for virtual try-ons, less crowded stores, and even the option to attend a fashion show right from the store with Virtual Reality (VR) headsets. Connecting with the consumer is essential to a brands success, and in order to uphold this new digitally-focused shopping experience, companies need to use ERP and PLM software to get goods to market, as fast as possible. Soon, customers will press a few buttons on a tablet in a store, and companies need to be ready to produce and ship product at incredible speed.
So what is the right software for your company?
An ERP system provides a centralized source of truth that helps connect other business systems for analysis and planning. The right ERP helps fashion companies optimize financial management and reporting and plan for materials requirements. ERP automates tracking and reporting—leading to as much as a 20% reduction in administrative labor hours.
Exenta ERP delivers the most advanced technology in the apparel ERP space and carries no technological debt. Our underlying data structure is designed to meet the unique needs of apparel brands. The ability to customize for STYLE, COLOR, LABEL, PREPACK, and SIZE has a cascading effect on workflow, ensuring ease of use within every downstream process.
PLM simplifies and expedites the path from concept to customer for apparel and soft goods.
It helps designers create new products more easily from existing styles and quickly develop tech packs for manufacturers to follow. Product managers can model “what-if” scenarios to see how choosing different suppliers, materials, or production facilities will impact costs and delivery schedules. Overall, PLM compresses the time needed for design and product development by about 35%, while improving vendor communication, sourcing and costing, line management and sample tracking.
Exenta PLM REVO software for fashion industry has the power to turbocharge your product lifecycle. Taking the user experience to a whole new level, it eliminates much of the tedious data entry to keep designers creative and automates time-consuming processes to speed products to market and simplify global collaboration.
The future of the apparel and soft goods industries is already here. Request a demo today.
The future of fashion is digital
The fashion industry is constantly evolving, attempting to stay ahead of trends and changing consumer buying behavior. According to market and consumer data provider Statista, global retail sales of clothing and footwear is predicted to rise to above three trillion U.S. dollars by 2030 (2019 sales topped out at $1.9 trillion).
While the popularity of e-commerce has been growing for decades, the COVID-19 pandemic gave e-commerce an unprecedented push. Stuck at home, consumers began shopping primarily online, with retailers finding themselves under immense pressure to provide fast shipping, good return policies, and fast turnaround.
So what is e-commerce?
The fashion e-commerce market is comprised of sales of fashion goods online, with revenue generated by companies using several online platforms and tools for trading fashion products. In 2019, North America was the largest region in the e-commerce market and, in the next few years, it is predicted that Asia Pacific will become the fastest-growing region for e-commerce.
In the fashion e-commerce industry, technology is the ultimate driver. In 2021, the number of global smartphone users is projected to total 3.8 billion, marking nearly a 10 percent increase from 2020. The current global population of 7.7 billion people means the smartphone penetration rate is at 45.4 percent. With more people than ever having access to smart devices and wireless internet and the emersion of a global pandemic, e-commerce has grown exponentially.
Technological innovation is shaping the e-commerce industry. With companies facing increasing pressure for better e-commerce performance, many are turning to supply chain technology such as Electronic Data Interchange (EDI) to help manage and streamline information and communication.
What is EDI?
According to IBM, EDI is “the intercompany communication of business documents in a standard format. The simple definition of EDI is a standard electronic format that replaces paper-based documents such as purchase orders or invoices.” With EDI, transactions can move seamlessly from one digital application to another. By automating these previously paper-based transactions, companies are able to save time and cut costs.
Some of the world’s largest fashion retailers now require their manufacturers to use EDI. In a global industry such as fashion, companies need flexibility and adaptability. EDI allows products to hit the market (in store and online) as fast as possible to keep margins low. EDI also helps companies reduce their return rates by providing detailed product descriptions with accurate information to consumers as well as all partners involved in the manufacturing process. With EDI, access to information is seemingly limitless. EDI allows businesses to have more accurate inventory levels both in stores and in warehouse, and the software enables users to trace all documents at any point during the production and distribution processes. All of these benefits have one thing in common: they help save time and increase your productivity, therefore your profitability.
Technology in fashion allows for companies to cut costs and increase productivity without sacrificing quality.
Staying ahead in 2021
In these uncertain times, companies must look to what will put them ahead. In 2021, what was once a luxury has now become a necessity. Consumer behavior continues to shift, and the fashion marketplace is unpredictable. Due to the ongoing coronavirus pandemic and skyrocketing popularity of e-commerce, it is more important than ever to look to technology. Changing consumer demands require constant attention to inventory and end-to-end fashion supply chain visibility. With Exenta EDI, you can ensure customer satisfaction and optimize your overall business performance.
Exenta EDI enhances information exchange between apparel brands and their suppliers, wholesalers, retailers, third-party manufacturers (3PM) and third-party logistics providers (3PL), shining light into every corner of global supply chain operations for superior visibility. In addition to enhancing visibility while reducing costs, brands that leverage EDI position themselves to do business with the world’s largest retailers and e-commerce platforms, many of whom require EDI as their standard for information exchange. When asked about Exenta’s ERP and EDI performance, MindsInSync CEO Iain Scorgie said, “a big barrier to retailers opening a new account or a new line of business is ‘Are you EDI compliant? Can you handle our business? Can you handle our volume?’ In Exenta ERP, we have a system that can handle that.” Scorgie explained his staff used to spend 90% of their time processing day-to-day operational tasks and just 10% on product development. Once Exenta ERP was up and running, that ratio completely flipped.
Fashion moves quickly – don’t get left behind. Request a demo today.
2020 was a year of uncertainty as the world faced unprecedented and unpredictable challenges. Consumer spending shifted radically, and companies who could not adapt were quickly left behind. This trend is continuing into 2021, as e-commerce takes over the fashion industry and speed to market is more critical than ever before. As fashion moves faster and faster, brands have been making strategic investments in digital supply chain transformation.
In our new white paper, Fashion’s New Normal, we discuss the importance of having a digital supply chain in 2021. A digital supply chain is comprised of many different technological pieces, and PLM is a critical link in the chain. In this white paper, we examine how PLM drives supply chain improvements, such as gaining operational efficiency to contain costs, and overall how PLM improves each step of the product development process. We focus on Cloud-based software solutions such as PLM by reviewing key benefits such as better visibility and improved time to market. A cloud PLM centralizes all of the information about a product in one place, so the development team, partners and clients can all access the right information at the right time. With everyone working from the same information, decisions get made more quickly and the approval process is much shorter, resulting in better speed to market.
Brands that invest in the technology to support an end-to-end, digital supply chain can level up across the organization in terms of efficiency and productivity. Download our white paper, Fashion’s New Normal, to learn more about the future of fashion manufacturing and production and how you can stay ahead in 2021.
Click here to request a demo and see how cloud-based software can keep you ahead for the future.
It has now been more than 9 months since Covid-19 hit the US. It’s affected a wide range of things from the way we live to the way we do business. Nearly every industry has been impacted, and the fashion industry is no exception. 2020 is the year that has changed everything, and the fashion industry suffered its worst year on record. A report by McKinsey & Company and the publication Business of Fashion describes the Coronavirus pandemic as something that “has disrupted financial markets, upended supply chains, and crushed consumer demand across the global economy.”
COVID-19’s impact on fashion industry operations
The Coronavirus pandemic has brought to light how outdated fashion supply chains have become. Sourcing Journal referenced an article outlining the need for more resilient supply chains that states, “Unfortunately, many [companies] are facing a supply crisis that stems from weaknesses in their sourcing strategies that could have been corrected years ago”. This year, Asian apparel manufacturers lost billions of dollars’ worth of orders in cancellations by fashion retailers trying to curb their losses. Manufacturers around the world were hit with cancelled orders and retailers unable to pay their debts.
According to McKinsey Global Fashion Index analysis, fashion companies will sustain a 90 percent decline in economic profit in 2020, after a 4 percent rise in 2019. The BofF estimates that global fashion sales will decline by between 0 and 5 percent in 2021 compared to 2019. While this does not seem like good news, it is a hit the fashion industry can recover from.
With these massive losses in sales and wasted product being sent to landfills (at rates higher than ever), the fashion industry is feeling the pressure to implement more sustainable practices. Manny Chirico, Chairman and CEO of PVH Corp. stated, “The COVID-19 pandemic has severely affected every aspect of the apparel value chain. While our immediate focus is navigating the crisis and its human and business impacts, we must actively look for ways to capture opportunities that can accelerate our efforts to create a more sustainable future”.
Over the past year, consumer behavior has changed dramatically. People began working from home, sheltering from the virus, and their needs (and therefore spending habits) changed. Not only did their buying habits change, but also how they shopped. Digital consumption has continued its dominance and growth as brick and mortar stores continue to shutter. A company’s online presence has become key to surviving the effects of this pandemic, and companies must develop more engaging and social experiences to encourage consumers to connect with speed and sustainably in mind. As the Business of Fashion states, “the pandemic will accelerate trends that were in motion prior to the crisis, as shopping shifts to digital and consumers continue to champion fairness and social justice.” According to Cotton Incorporated’s 2020 Spring U.S. Coronavirus Response Survey, the majority of consumers (65 percent) have become more concerned about sustainability and environmental issues since the COVID-19 pandemic began.
So how can companies strengthen their supply chains while prioritizing sustainability and profit simultaneously?
How Exenta software can modernize your supply chain for a digitally focused year
Software technology implemented throughout the supply chain provides the perfect blend of technology and human labor by increasing productivity, decreasing waste, and therefore increasing profits.
Information gathered and recorded manually does not provide manufacturers with insights needed to make adjustments mid-shift or mid-production order. Shop Floor Control MES software tracks the progress of production throughout sewing operation, giving supervisors, managers and workers real-time information and notifications regarding WIP, including many aspects of workforce management such as employee productivity, labor costs, and pay rates. When Shop Floor Control MES is used, employees can scan barcodes on pieces or garments rather than writing everything down in a notebook or using gum sheets. This results in an immediate efficiency improvement, along with enhanced decision-making capabilities. Shop Floor Control MES enables sewing operations to experience productivity gains from 11% to more than 40%. Extra productivity translates easily into higher profitability. In a large corporation producing 100 million pieces per year, even the minimum 11% productivity gain would result in 11 million extra sewn products to sell each year—without any additional labor required. This increase in efficiency directly correlates to a decrease in material waste and environmental impact. A more efficient shopfloor results in reduced waste during the manufacturing and production process.
In today’s primarily digital marketplace, fashion brands need to be able to evolve with consumer demands. Exenta offers the only complete supply chain management (SCM) technology suite designed for the apparel and soft goods industry. Real-time visibility across your supply chain helps you continuously optimize operational decisions while balancing competing demands for cost, speed, and quality.
Technology is key to driving the visibility, speed and accuracy required to adapt to evolving customer demands and a changing competitive landscape. Better supply chain management helps get products to customers faster which boost profitability. Vendors taking advantage of a cohesive end-to-end Supply Chain Management technology platform will be able to bring a higher quality product to market faster than ever before, with less waste and fewer returns.
See how Exenta’s cutting edge technology can streamline your supply chain and prepare your company for 2021. For more information, request a demo here.