Every week, The Interline analyses one or more vital talking points from across the landscape of fashion technology news. This analysis is also delivered to Interline Insiders by email.
A public battle for the future of fulfilment papers over the ongoing fight for fairness in purchasing practices.
On both sides of the Atlantic, the war is on for fulfilment capacity. With the holiday season looming, and little sign of the global logistics crisis abating, retailers are turning to extreme measures in service of “saving Christmas”.
While that sounds trite, the cheery outward marketing belies a very difficult reality where the act of getting finished products to customers has become costly and unpredictable enough that direct chartering has become a viable option.
This is also just the side of fulfilment that the customer never sees. A pitched battle is also heating up in in-country logistics and last mile delivery, with huge investments in autonomous trucking and other methods of smart distribution.
While chartering your own freight or building out a self-driving haulage network is beyond the means of all but the largest brands and retailers, significant investment is being made in bridging the gaps between producer, retailer, and consumer.
This week saw the announcement of a new partnership between FedEx and Salesforce that aims to deliver: “next-generation intelligent supply chain and fulfillment capabilities”. And in typically quiet style, Amazon has seized the pandemic opportunity to become a larger parcel carrier than FedEx itself – growing from 20 million deliveries in 2014, to 4.2 billion in 2020.
Getting products to consumers as expeditiously as possible is, to put it bluntly, big business. So big in fact that Zara’s wider selection of fulfilment options – which include in-store pickup as well as courier delivery – was cited this week as being instrumental in the fast fashion retailer’s climb back to the top, as it became the world’s biggest clothing retailer again:
“Zara’s ability to offer in-store pickup has allowed it to recoup sales quicker than its fast-fashion peers, such as H&M, which offer more limited in their fulfilment options,” wrote Modern Retail.
Just as everyone has a pandemic-related story of not being able to order something they wanted or needed, most of us have tales of deliveries coming through in decidedly “clutch” fashion – at midnight, or rattling around in an Uber driver’s back seat – which, aside from demonstrating the sheer resilience of the retail and hospitality industries, speaks to the sheer strain that has been placed on both extremes of the fufilment network – overseas and closer to home.
This is strain that technology is striving to alleviate, whether it’s through autonomous robot deliveries, or repurposing self-driving cars.
But like a lot of the fashion industry’s deep-seated problems, this concentration on the hurdles that stand between producer, retailer, and customer is, in many respects, covering up for deeply ingrained sourcing and purchasing policies that make the requirement for rushed shipping and distribution necessary in the first place.
And this is before we consider how the fight for the future of fulfilment can stand alongside brands’ and retailers’ sustainability commitments. This week saw ASOS and Primark announce that they would be – among other improvements – reducing the carbon emissions from their clothing production and delivery processes, but it will be difficult for those retailers to reckon with a market that wants new product and a supply chain and distribution network that is struggling to bring it to them.
According to an open letter to US President Biden written by the National Retail Federation – on behalf of its members – this summer, the majority of retailers have had to add an extra 2-3 weeks to their supply chain timelines, and this was in June, before COVID-related and COVID-adjacent challenges compounded those calendar issues even further.
Last month, at least one major fashion retailer sidestepped the sea freight issue entirely – at least from one destination, for a period – by switching to air freight as a way to keep product flowing. Needless to say this will have a serious impact on the brand’s carbon footprint, but while it will achieve the immediate aim of bringing inventory into domestic markets quickly, this will do little to address one of the most significant contributors to supply chain disruption: compressed production timelines and overall imbalanced purchasing practices.
It’s no coincidence that the Sustainable Terms of Trade Initiative chose this week to release its whitepaper on what it calls “commercial compliance”. That may not be the snappiest name, but the paper contains an urgent plea for brands and retailers to overhaul the way they deal with manufacturers and other supply chain partners, so that the solution to getting products to people faster doesn’t become solely focused on smarter methods of delivery.
The paper is not overly long, and The Interline considers it recommended reading for anyone interested in understanding how the pressure of fashion’s post-pandemic recovery is being unevenly distributed – a theme that’s captured neatly in this extract:
“The line between flexibility and predictability has been blurred. Buyers should have a responsibility to create the best possible predictability of orders so that manufacturers and the workers they employ are not left with unnecessary, avoidable risks or costs. Now too often buyers achieve flexibility by fully sacrificing predictability for the manufacturer.“
Fortunately investment is still also being made at the systemic level, with a story from this week revealing that Sourceful has finished a new funding round to assist in its objective of improving supply chain sustainability credentials through better decision-making.
Whether platforms like this will be able to adequately address one of the biggest root causes of the delay in getting products to people’s doors remains to be seen, but as fashion moves towards a holiday season where store shelves are likely to full because of sheer brute force, The Interline would argue that the time has come to look beyond the last mile for a permanent solution.