What Retailers Can Learn From H&M’s $4B Worth of Unsold Inventory

“In the world of fashion retailing, where shopping is fast moving online and stores try to keep inventories closely matched to sales, even a small stack of unsold clothes can be a bad sign.”  The New York Times 

The news circulating about H&M’s colossal pile of unsold merchandise simply reminds us of the risks fast-fashion retailers face to deliver trends at quicker-than-lightning speed consumers demand.

Although at the unfortunate expense of H&M’s affected profits, here are three invaluable lessons retailers can take away from the big, pile of unsold inventory getting so much press lately:

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Topics: inventory optimization, data, convenience, fast fashion, advanced analytics, speed, accuracy

The Need for Retail Speed and Accuracy in an Ultrafast Fashion World

“Consumers are rabbits in today’s supply chain, and brands, retailers and manufacturers are the too-slow turtles that can’t keep up—despite knowing they need to.” – Spencer Fung, CEO of Li & Fung 

Speed is the name of the game. 

The see-now-want-now mentality isn’t going away anytime soon. While convenience and access continue to drive the consumer desire for immediacy, the gap between customers and retailers expands even more steadily.                       

The number one problem on every top retailer’s mind is this: What can we do to shrink this gap?

“What’s been made very clear in recent years is that the entire supply chain is being disrupted because of consumers’ see-now, want now mentality, because of e-commerce and the convenience it offers, and because of new business models coming from startups that aren’t bogged down by remnants of the old days and ways.” – Sourcing Journal

At the end of the day, leads times cost. The old days of showcasing designs months in advance before delivering to stores are long gone. The speed to market issue is where the problem lies – and slight improvements year over year are not enough at the rate consumers are going today. 

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Topics: inventory optimization, data, convenience, fast fashion, advanced analytics

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