Unlocking opportunity - how to optimise your operations to create a platform for growth

Unpredictability is the new normal. For fashion brands and retailers to navigate the current trading climate in fashion, adaptability is key. Market forces – from US tariffs to global conflicts, to consumer confidence and the weather – are shifting on a weekly basis.

Just when retailers think they are settled into a trading pattern, further disruption presents itself. But that disruption can also be positive, such as a viral hit on social media, sending demand soaring, or a new market opportunity presenting itself.

To ride the challenges and capitalise on the opportunities, fashion brands and retailers need to forge the right partnerships with service providers who are prepared to advise, flex and support at the right moment. It also helps to talk to other retailers who are in the same boat, to share ideas and find solutions to common challenges.

This is why DHL Supply Chain partnered with the TheIndustry.fashion to stage an intimate breakfast with leading retailers at Nobu Hotel, London. Over breakfast at this leading hotel, based just a stone’s throw from Europe’s busiest shopping street Oxford Street, leaders from DHL Supply Chain, TheIndustry.fashion, Longchamp, Radley, Hush and Manors Golf shared their thoughts on the main challenges in the market and swapped advice on how to deal with them.

The insights shared will feed into the DHL Supply Chain business to help shape the services it offers, explains Natalie Frow, Managing Director Ecommerce and Retail of DHL Supply Chain UKI. “Our job in supply chain and logistics is to solve those problems for retailers, to help them be able to serve their customers better, and take the time to really listen to the retailer about the challenges that they’re facing. This helps us to design the best solutions that work for their business.”

“Fashion is a really challenging and complex industry,” adds DHL Supply Chain VP Ecommerce and Retail Tia Wallace: “What struck me is that there was a real openness to talk about that honestly around the table. But even more so, there was a real excitement to talk about the opportunities in the sector.”

There are indeed opportunities to be taken. International growth is a key opportunity for all the brands and retailers assembled. Despite the unpredictability of the tariff situation, the US is still seen as a key market for growth, with brands using various methods of market entry from pop-up stores to marketplaces to test American consumer appetite. Direct-to-consumer e-commerce is clearly still a great opportunity and led to a lively discussion by those present on how best to approach the market - for example, shipping directly into the US from the source of manufacturing so duties are only paid on cost price, and also how best to deal with returns (in market, being the consensus).

Returns overall remains a hot topic. But rather than seeing it as a problem that needs to be “solved”, the retailers present see it as an opportunity to drive efficiency and deepen customer relations and agree it can even be used as a marketing tool.

All present agreed that encouraging consumers to return unwanted items as quickly as possible was crucial to driving efficiency. There also seems to be a growing acceptance from retailers (and from consumers) that a form of returns charge is now desirable for the retailer and acceptable for the consumer.

The trade-off for the consumer is brands making the returns process as slick and quick as possible. Some brands are also offering incentives, such as free gifts for an exchange and bonuses on store credit to keep customers engaged and shopping. Understanding why something is returned and retaining a consumer is hugely valuable intelligence that can drive future product and customer experience strategies.

Feeding into the returns picture is of course part of a circular business model. It is becoming increasingly important for all brands and retailers, no matter the price point, to look at how returned products (that cannot be immediately resold) can be redeployed through a second life channel. Not only is this more sustainable but it drives deeper connections with consumers and can open your brand up to a whole new audience.

DHL Supply Chain warehouse staff are actively incentivised to send product to a repair and renewal route, where the brand has requested it, in order to maximise this opportunity.

Much ground was covered and all were agreed there was so much more that could be discussed and debated. But that will be for another day! For now, here is a summary of the hot topics and top tips gleaned from the market and some commentary from the brands present.

Hot topics:

• International expansion: how best to approach the US
• Being adaptable to fast moving market dynamics, such an unexpected peaks in demand
• Driving efficiency into the returns process (particularly across various channels, such as retail stores, partner stores, marketplaces etc)
• Encouraging speedy returns from customers and shifting more of them to exchange or store credit, rather than refund
• Introduction of circular models (often driven by returned product)

Top tips:

• Ship product directly from source of manufacture to the US (rather than shipping each individual e-commerce order) to minimise tariff impact
• For international sales, consider in-market returns
• Work with your 3PL closely on demand forecasting (e.g. let them know of any significant marketing or social media activity that might lead to a sudden surge in demand)
• It’s OK to be out of stock sometimes! Scarcity drives demand
• Encourage customers to return unwanted goods quickly - incentivise and exchange or offer store credit (this might be a free gift with exchange or a 10% bonus if store credit is selected)
• Consider branded, reusable packaging and encourage customers to use it again – it’s a sustainable and easy way to get your brand (literally) into circulation
• Work with your 3PL on how best to handle returned product. Can it be repaired or renewed and then sold on a second life channel? Incentivise warehouse staff to send product to the repair route
• Product personalisation - This can be offered in partnership with a 3PL and, remember, personalised products can’t be returned!

What the brands said:

Stéphanie Azan, Longchamp UK

“I very much enjoyed the format. It was very secluded and everyone had the opportunity to discuss their challenges and opportunities.”

Nitesh Shah, Manors Golf

“There are always going to be constant moving parts and leaning on people around this table will really help establish us in the market”

Steve Shinji, Hush

“We’ve all got the same mindset and the same challenges and opportunities so it’s good to take tips from them and take inspiration from them as well.”

Guy Meisl, Radley

“These functions are always inspirational. You hear from potential competitors, from similar brands in different spaces that always provide one or more nuggets of useful information”.

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