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Transcript of LATEST TRENDS IN APPAREL INDUSTRY & ITS … Fashion final 020811.pdf Wipro Retail LATEST TRENDS IN...
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Wipro Retail
LATEST TRENDS IN APPAREL INDUSTRY &ITS IMPACT ON FASHION RETAIL MARKET
Fashion retailers have always had certain unique business challenges.
Moreover, faced with an explosion of data, dynamic markets, changing
customer expectations, fashion retailing is becoming increasingly complex.
Any business or IT service provider to this industry needs to be aware of
these different challenges and have an in-depth understanding of the
fashion-retailing domain.
Wipro’s Fashion Retail practice was established with a view to fill in this
need. Wipro’s Fashion Retailing practice works with leaders across the
globe. The focus of the practice ranges from apparel, footwear and
jewelry and cuts across luxury, fast fashion, department stores and
discount retailers. Our 2,000+ strong team is focused on creating and
extending market leadership. Our comprehensive set of offerings across
fashion strategy consulting, business transformation, technology
transformation and process transformation coupled with our partnerships
across technology platforms such as Microsoft, IBM, Oracle, SAP, HP,
CISCO etc. offers significant value to our customers. Our investments in
analyzing markets trends and significant customer needs have resulted in
several IPs and solutions that enhance customer experience and achieve
retail operational excellence. Our practice has also invested in training and
certifying our consultants on fashion retailing and technology.
Wipro’s Fashion Retail Industry Update presents a view of the key trends
shaping the industry and the opportunities that face retailers.
INTRODUCTION
Business Trends
1. Retailers will continue overseas expansion amidst talks of economic recovery
Fashion retailers have been looking at overseas opportunities for more than a decade now. The recent economic
downturn coupled with rise in population with disposable incomes across various parts of the globe has
accelerated this trend. Now, despite improving economic conditions, companies will continue focusing on global
opportunities to fuel further growth.
03
In 2010, most apparel retailers in the developed world were able to
achieve impressive growth in profits. This growth however has been
either due to cost cutting steps that companies took during recession or
due to strong sales growth from a much weaker performance in 2009.
The apparel market in the developed world is estimated to have grown at
1less than 1.3% during this period as against 2.3% growth worldwide.
Hence going forward, it is difficult for these firms to repeat this
performance in 2011. Challenging retail environment and increasing input
costs will continue to squeeze profit margins, which makes the rapidly
growing emerging markets more attractive.
T h e N i e l s o n G l o b a l
Consumer Conf idence
survey (Q4 2010 - Jan-11)
indicated low consumer
confidence in most of the
developed world with almost
32% Americans and 19%
Europeans saying that they
have less or no discretionary
cash to spend and 22%
people saying that they
would continue with spending less on clothing. According to the survey, a
large section of consumers from the developed world will continue to
spend more cautiously for now. In US alone, the number of shopping trips
2of households with income less than $100k has reduced by 4%. High
rates of unemployment in developed economies, the low rate of increase
in wages, rising utility costs and lingering recessionary consumer attitudes
are expected to culminate into a difficult business environment for mass
market retailers, while increasing cost of Chinese imports, raw material
and international freight will further squeeze out profit margins. For now,
European fiscal policies seem to focus more on reducing deficits as rising
taxes and reduced government expenditure will further drain out
consumer spending in the region.
The undifferentiated, low cost retailers who have depended on low
pricing and deep discounting alone will bear most impact of these
conditions. Fashion retailers will have to turn to emerging markets to
ensure growth where markets are estimated to grow at a much higher
rate than those in developed countries. Nine of 14 countries that ended
the consumer confidence survey on a positive note are from the Asia-
2Pacific region. A survey of retail executives revealed that 80% of them are
looking forward to China, Russia, Brazil, India (the BRIC countries) for
3further growth. Japan’s Senshukai has already announced plans to expand
its presence in China this year. Mark and Spencer has plans to open up an
additional 10 stores in India and six in China over the next year while US
retailer GAP has already announced plans to enter into Serbia and
Ukraine by 2011.
36International expansion helps Inditex outperform H&M.
04
Consumers in emerging markets now have more disposable income on
their hands and are becoming more brand conscious. Studies have
predicted that China will become the world’s largest luxury market by
42015. Brazilians high spending on clothes and preference for the latest in
fashion makes Brazil a lucrative market for global fashion brands. Brazilians
reportedly spend 6 times more on clothing than the Chinese (per capita
5,6basis) and often make use of credit for apparel purchases. Japans luxury
market faces unprecedented pressures. Sales are down sharply and many
luxury companies have issued warnings that they will fall short of current
growth and earnings targets. In coming time, luxury retailers will surely find
their customer base shifting. The Arcadia Group is looking to tap China’s
retail market by 2011 while Italian brand La Perla will open 19 stores in
Asia. Designer shoe label Steven Madden is set to enter Indian retail market
in 2011.
The 2010 A. T. Kearney GRDI survey shows that Middle East and African
countries have become lucrative destinations for retail growth. Eight of the
top twenty most lucrative countries for retail growth are from this region.
These represent presence of small but isolated profitable pockets in this
region. Consumer spending from this region in 2010 on clothing and
footwear is estimated to be at around $82 billion, which is more than many
7,1individual developed markets like Germany, Italy & UK. Youthful
demographics will further dive this market’s growth in coming years. In
2010, Koton made investments to increase its floor space by 17%.
This trend of internationalization however is not restricted only to
developed world retailers going into emerging markets. There are already
a few examples of retailers from emerging markets venturing into foreign
markets. Chile’s Falabella is planning further expansion of its operations in
Colombia within this year. Li-Ning of China started testing US markets by
opening up in Portland Oregon 2010, although the company is reported
to wait for a few more years before making any large investments.
Shoemaker Liberty Shoes plans to launch 10 outlets overseas - in South
Africa, Middle East and Kuala Lumpur within the next one year.
While market in UK shrunk by almost 4.4 % in 2009, ‘fast fashion’ has
7emerged as a thriving business model. The rising popularity of Fast
fashion across Europe and other parts of the world has prompted
retailers to grow in developed markets as well. US based apparel retailer
Forever 21 entered UK in 2010. Zara is planning to expand its online
operations to US, South Korea and Canada in 2011 as well as open
outlets in Australia and South Africa. Uniqlo, which entered Taiwan in
2010, is expected to expand its presence in Singapore in 2011.
This ‘internationalization of apparel retailers’ will continue in the
foreseeable future as companies will continue to explore more profitable
markets abroad.
Harry Winston Inc. is looking to more than double its store count in37five years by tapping lucrative markets such as China, Russia and Dubai.
Mulberry expects overseas sales to overtake those in its home38market in two years.
39Gap jumps into Ukrainian market with a Kreshchatyk store.
40Forever 21 bursts boundaries with big stores, fast growth.
Gap and Nike are among the latest to launch on the 30,000-brand site, as41part of a push to reach consumers outside China's major cities.
The largest clothing retailer in the world, Inditex plans to add up to 500outlets in 2011 despite slower consumer spending in Europe and the U.S.The company plans to focus on Asia, where consumer spending is rising.Later this year, the company plans to launch online sales for brands
42beyond Zara.
05
2. Consumers will continue to be
spoilt for choice
Luxury sale have received a boost from sales to young, aspiring
consumers. The average consumers of luxury brands in the fast growing
developing markets are younger. As markets head towards recovery,
sales from the aspiring segments will increase. Many premium brands have
acknowledged this and have tried to allure younger, aspiring consumers
by introducing new ranges of products or brands, which are marked at
lower prices – but still maintain their premium appeal. The US handbag
and purse maker ‘Coach’ recently launched its new, more youthful
‘Poppy’ line of less-structured and brightly colored products, priced
around 20 percent less than their traditional products. This contributed to
the company’s recent strong growth in a weak retail environment. With
the lingering recessionary attitudes among consumers around the world,
more companies will follow this trend.
Fashion companies have come to realize that to become successful
overseas, they have to take local preferences and sensitivities into
consideration. Many companies who have made forays into emerging
markets are now coming up with brands specifically targeted to these
regions. The U.S. jeans maker, Levi Strauss & Co, Levis launched its
DENIZEN brand of jeans in 2010 in China and subsequently introduced it
in Singapore, Korea and India. DENIZEN products are designed keeping
in mind Asian physique and intend to compete on better fit. In September
2010, French fashion retailer launched its first boutique for ‘Shang Xia’, a
brand specifically targeted towards Chinese luxury market.
In course of recent recession, retailers pursued private label sales to earn
In recent years, changing consumer behavior and
shifting demographics (in terms of spending) have
prompted several companies to launch newer brands
or enter into related product categories. Fashion
Houses and retailers must use this opportunity to
help their brands carve their credentials and create a
loyal customer base.
more profits, which drained out margins across the industry. As prices of
imports and raw materials increase, retailers will find it difficult to compete
on low prices alone. To be able to compete effectively in the market place
these private labels will have to carve their own fashion credentials. Tesco
has already announced a partnership with ‘From Somewhere’ for its
private label F&F to launch an eco friendly line – ‘From Somewhere to F&F’.
It also launched a limited range called F&F Couture in an attempt to
portray itself as a fashion forward brand.
With increasing wages, raw material and international freight, Chinese
companies are increasingly finding it difficult to maintain their position as
low cost exporters. As the proportion of Chinese fashion imports reduces,
companies will face a capacity overhang. Chinese brands are becoming
better known in local markets. Homegrown Chinese brands like Li-Ning,
Ante, 3610 and Metersbonwe are already in competition with other global
brands for a share of China’s lucrative marketplace. PYE, JNBY,
Septwolves, Lilanz and Cabeen have too seen growing recognition over
time. Li-Ning which is second only to Nike in the Chinese market has
started testing international markets with stores in Singapore, Portland
Oregon and sponsoring sports teams from 14 countries across various
sporting events; lending the brand a more ‘international’ look. The twelfth
five-year plan seems to be very keen on stimulating domestic
consumption. Brand development efforts from government bodies like
SCBP and organizations like BCIU have been present for a quite some time
now. While there might still be a long way to go before we see a shift from
‘Made in China’ to ‘Designed in China’, we are sure to see Chinese brands
growing stronger in the coming years.
Last few years have seen newer brands emerging leaving the consumers
spoilt for choice. These brands will have to work hard to develop their
own credentials and create a loyal customer base. Analytics and customer
Insight will be critical competencies for brands to emerge from this
competition. Fashion retailers on the other hand will have to listen closely
to consumers to be able to grab the right opportunities.
LVMH PE fund aims to tap India’s growing lifestyle market. The $650 million43fund will invest in lifestyle firms catering to the aspiring segment.
44"Aspirational shoppers" to fuel'11 luxe rebound.
Kiki is the first diffusion range from Kirsty and is aimed at a different45market than the main line.
Balmain is to launch a diffusion range called Pierre Balmain, named46after the label's founder.
06
3. Fashion Retailers from all segments
are entering online markets
Recent studies indicate that apparel e-commerce will grow at much
higher than rate of growth of apparel market; indicating that e-commerce
will steal some share from other sales channels. In 2010, searches related
8to clothing generics increased by more than 19% in UK. During this
holiday season, online apparel sales in US were estimated to be around
18.9% of clothing sales during that period with 49% of people saying that
9they shopped less in stores because they could shop online.
12Annual growth rate of sales of all goods in US
Apparel ranked 5th in the list of products researched
on the internet and then bought in stores. Clearly, the
internet is generating a lot of cross channel sales.
However, e-commerce sales continue to grow at a
much faster rate than other channels. Growth in
smart phone, tablets and m-commerce will further
accelerate this growth. Fashion retailers across all
segments will flock to the online market to claim
their share. Fashion retailers across the globe are also
investing in creating international online presence to
fuel their growth.
Clothing/Footwear was chosen at second on a worldwide survey of list of
things to respondents would purchase online within the next six
10months. Cross channel purchasing is quite prevalent in this category.
Clothing ranked fifth in survey of products that were researched on the
11internet and bought in stores later. The fact that e-commerce websites
increase sales at brick and mortar stores through multi channel customers
and yet sales from online channels are growing at faster pace makes it
imperative for retailers to engage in online operations.
Growth in m-commerce will further boost online apparel purchases.
Mobile phones are ‘always-on’ devices that can help retailers engage
consumers on a one on one basis. Moreover, a recent survey found that
customers prefer using their smart phones for shopping. 56 % of smart
phone users believe that smart phones make the experience more
14enjoyable. Although some companies have made investments into
mobile optimized sites and apps, a large proportion of retailers are still to
come up with a mobile strategy. Tablets are providing retailers with a
platform where they can provide a better consumer experience.
GPS-enabled smart phones are allowing retailers to offer location
based services.
Brooks Brothers has launched a dedicated mobile site that allows users to 47browse and buy from the apparel retailer's complete catalog.
07
Adobe’s Mobile Experience survey conducted in 2010 shows that apparel
and footwear is the 2nd most purchased category by American mobile
users. In another survey conducted in 2010, 47% respondents said that they
were more likely to buy clothing and shoes from a mobile commerce site if
15the retailer has one enabled. Going forward retailers can focus on
personalization to make use of the one to one interaction provided by
smart phones.
Apparel e-commerce has been around for a long time now. Increasing
online sales, growth in multi-channel retailing and m-commerce has made it
more important for fashion retailers. H&M joined the ecommerce fray in
September 2010 with a transactional website in Sweden as well as other
European countries and is following that launch with a series of openings in
other key markets like the US. The Spanish apparel retailer Zara has
responded to consumer demand for multi-channel availability by
announcing that it will take its products online. Almost two thirds of
American apparel and footwear retailers who participated in a recent
survey said that they either were in very preliminary stages or had not yet
come up with a mobile strategy. Apps and websites compatible to mobile
devices represent a huge opportunity. Some apparel retailers have already
come up with specialized apps for iPad, iPhone and Android device.
Zappos.com has mobile app for Android as well as for &
allowing customers to shop its full catalog of handbags, shoes and clothes
via their mobile devices. Boutique.com introduced an app recently that
allows users to browse through its boutiques on the go. Many fashion
retailers like Dolce and Gabbana, Urban Outfitter, American Eagle
Outfitters, Brooks Brothers have launched mobile websites. Online
environment allows detailed monitoring of customer actions and can help
retailers build extensive insights into consumer’s tastes and preference as
well as test newer markets.
Traditionally, luxury retailers had held a view that ‘experience’ and
‘exclusivity’ being central to their brands, they should not sell online. In early
132008, only a third of luxury retailers worldwide had online operations.
However, things are gradually changing as luxury retailers realize the
opportunities the online market holds for them. A recent survey by
McKinsey indicates that multi-channel retailing is very prominent in the
iPad iPhone
iPad
16luxury market. Consumers increasingly are browsing the internet for
information before making in-store purchases. Tiffany & Co. and Loius
Vuitton already have very successful online business as well. Prada
launched its transactional website in 2008 and now expects that by 2015,
40% of its revenues in America will come from internet sales. In 2011,
luxury brand firm Brunello Cucinelli Inc. entered the online market with a
website available in English, Italian and Japanese languages and operations
in Europe, America and Japan. CRM opportunity on the internet is huge
and more relevant to luxury brands. Luxury fashion retailers are now able
to provide their customers a more personalized, exclusive shopping
experience online. In order to be successful in the online market, luxury
retailers will have to provide exclusivity and luxurious experience to its
potential customers who will generate revenue streams as well as nurture
the aspiring class who act as brand advocates.
E-commerce by no means is restricted to the developed markets of the
west. China’s e-commerce market is all set to exceed Japan to become
Asia’s largest online market. Clothing remains one of the most popular
product categories. Russian online footwear market is also buzzing with
activity with newer players having made an entry very recently. Korea,
Thailand and Malaysia also have shown strong growth in online sales.
However, there are still pockets in the Middle East, Asia and Africa where
online markets have not taken off in a big way.
Online giants also have caught on to this opportunity. Three of five
e-commerce companies acquired by Amazon in the year 2009-10, deal in
clothing or footwear. In May 2011, the company also announced the
launch of its new flash sale site – myhabits.com putting it in direct
competition with Gilt, Rue-La-La and eBay’s fashionvault service. Google’s
new site - boutiques.com that was launched in 2010, aims to make use of
advanced technologies like machine learning and computer vision and try
to understand consumers’ preferences and try to provide a very
personalized shopping experience.
Macy's is making significant investments in its e-commerce efforts, with plans to
hire about 3,500 full-time, part-time and seasonal workers to support online 48retail during the next two years.
HauteLook, a flash fashion seller, is branching out into shoes with the launch of 50SoleSociety.com, a members-only selling site focused on footwear.
Consumers in China spent $82 billion on online purchases last year, a 95% increase over 2009. While online sales represent just 10% of total retail sales in China, consumers in major markets are increasingly using brick-and-mortar
51malls as showrooms for the goods they'll buy later online.
Daily-deal website LivingSocial reportedly is aiming to raise an additional $500 million to fund an aggressive expansion aimed at keeping up with industry leader Groupon. Amazon invested $175 million in the smaller player three months ago, and since then LivingSocial has more than doubled its subscriber
52base, to 24 million, and expanded from 120 markets to 230.
08
Online consumers however remain highly price sensitive. In a recent survey
of cross channel shoppers in the US, around 41% respondents said that
they purchased from a different store than the one where they researched
11that product owing to lower price. In another survey of online shoppers,
73 % respondents said that low prices were very important to them when
17shopping online. Perhaps one of the best indicators of consumers’
insatiable hunger for discounts is the meteoric rise of the likes of Groupon.
The presence of a company in e-commerce helps retailers to tap into this
increasingly popular channel as well as get attract multi-channel consumers.
4. Social Websites might not lead to
direct sales, but remain indispensible
f o r I m a g e p r o m o t i o n a n d
customer engagement
Emergence of F-commerce is a highly debated topic these days. As recent
data has shown, social networks drive a very small proportion of online
sales. According to a survey, less than 5% orders placed on the internet
18originate from sales on social networking site . It is very unlikely that this
number will see any dramatic rise within a short time. Fashion retailers have
been struggling to know the exact ROI from their social investments.
Consequently, they have allocated very small proportions of their
marketing budgets towards social networks, blogs, etc. estimated to be
19around 2% only. In a recent survey, about 61% retailers said that they
were investing only to ensure that they are not left behind while half of
Data from the holiday shopping in US has clearly
shown that consumers are yet to get used to social
websites as a tool for shopping for apparel and
footwear. The direct sales generated from such social
websites (excluding ad-triggered sales) remains low.
However social networks, continue to provide a
platform where fashion retailers to leverage their
customers’ enthusiasm and reach out to more people
and increase their brand awareness. After all, an
increase in share of the consumer’s mind is most likely
to translate into an increased share of consumer’s
wallet – even if not through direct sales.
retailers in US - 52%, think of social networking as only a channel to
communicate with customers. Only 32% of retailers reported that they
have a specific set of metrics to measure the success of their brands on
19social media. Fashion retailers clearly need to examine their expectations
from social networks.
Consumers have become accustomed to deep discounts while shopping
online, thanks to Flash sale sites. Discounting can no longer be a strong
point of disparity. Online players will now have to look at other avenues to
differentiate themselves. Social networking has caught retailer’s fancy as
they look forward towards stronger consumer engagement. The way social
networking websites have grown, they can no longer be considered as the
exclusive preserve of tweens. Social networks have a very broad
distribution in terms of age. As shoppers with increasing purchasing power
start using social networking sites; it becomes more lucrative for retailers to
enter this channel.
While online sale through websites was traditionally thought of as more of
a one to one engagement with customers, everyone is soon realizing the
power of social media as the silent but effective persuader. A recent
Nielsen survey has proved that exposure to earned media resulted in
20thrice better (home-page ads) ad recall (social platforms only).
Facebook and its role in retail was a hot topic at NRF's Innovate 2011 conference this week, as presenters shared their thoughts on why
53F-commerce, or Facebook-commerce, may be retail's new frontier.
09
Trust across various online channels
In another recent survey, 90% customers claimed that they would trust
recommendations from someone they know as compared to 54% for
21emails and only 24% for mobile text ads. Social networks can help fashion
retailers leverage this high trust channel and transform ‘customers’ into
‘brand advocates’.
Social networks allow retailers to reach a large number of people who
would be interested in their products. Not only does they give retailers an
opportunity to strengthen their brand awareness, but also provide them
with first hand insights into consumer behavior, preferences and a channel
to listen to feedback. Furthermore, user generated content in the form of
reviews, comments, pictures or videos are seen as a low cost and more
effective way of creating buzz around the band that could lead to sales
through other channels.
There have been examples of apparel and footwear retailers who have
successfully tapped into the potential of social networks to their advantage.
Facebook apps like Swipely allow users to discuss their purchases with
others. Retailers like J.C. Penny and ASOS allow users browse through their
entire collection via Facebook and encourage users to share pictures of
items that they like or have purchased with their friends; encouraging
discussion about the retailers’ products. This ‘earned media’ reaches out
to other people, acts as a more trusted source of information and stays
around for a longer time. While people may not buy the clothes right
away, such earned media does help brands get a higher share of the
consumer’s mind.
Zappos.com boasts of having 442 employees on twitter; CEO Tony Hsieh
24was once ranked as the 42’nd most followed of all twitter users. Positive
comments from Zappos’ loyal consumer base helps the company portray
a very good brand image giving the company free earned media.
Wall-mart’s $300 Million acquisition of Kosmix is a sign that big retailers
are taking a serious look at social media. Sears has already launched its very
own social networking site called MySears, which has more than 20,000
23visitors every day.
However this opportunity comes with its own set of challenges. Privacy
concerns remain high as ever. The failure of Facebook Beacon as
compared to the success of Amazon’s Giver and Grapevine has shown
that social media users want to have complete control of their account.
Retailers must be sensitive to these concerns if they are to tap into the
power of social networking. Furthermore, managing consumer
expectations in a real time environment can be very challenging. A recent
survey by Nielsen showed that on an average, 40 percent people are
more likely to share any negative experiences online as compared to any
10positive experiences. Dynamic and responsive Social Reputation
management is becoming very critical for fashion brands.
Fashion and Apparel being a high involvement product, consumers do
share a high degree of enthusiasm about their purchases. The attention
enjoyed by the large number of videos ‘Haul videos’ on YouTube indicates
this. Many retailers like J. C. Penny and Marshalls have been known to
distribute gift cards to shoppers to create such videos. Other retailers such
as Forever21 and American Eagle Outfitters regularly use social media to
share their products’ haul videos. Social networks present a huge potential
to marketing managers who always find themselves wanting to do more
with the limited resources at hand. While social networks might not lead
to direct online sales, they help organizations develop deep customer
insights and provide opportunities to seed creation of a vast resource of
"Haul videos", homemade online videos in which women and young girls show off their bargain-hunting triumphs, or "hauls," have gone from being an internet sensation to a lucrative business. There are almost 300,000 haul videos
55currently on YouTube, with several getting millions of views.
A Facebook update now enables online retailers and other sites to easily add relevant Facebook comment boards to their product pages. Additionally, new comments posted on merchants' sites will also automatically post on Facebook
56when shoppers are signed on at the social site.
Tesco has acquired digital world-of-mouth agency BzzAgent in a deal said to be 54worth $60m (£37m).
10
earned media and to The success of their social investments will greatly
depend on their creative use of these opportunities.
5. Increasing input costs will force
fashion retailers to relook at
operations and pricing
US Bureau of Labor Statistics clearly show that prices
of apparel in urban America have been declining for
more than a decade now. This trend can be seen in
other geographies as well. However, Fashion retailers
will now find themselves in unfamiliar territory as rise
in costs of raw material, international freight and labor
exert huge upward pressures on their prices. Fashion
retailers will now have to further diversify sourcing,
increase prices and introduce more efficient
manufacturing practices.
When Uniqlo’s was relaunching it’s e-commerce portal in UK, it ran a
very successful campaign called ‘Lucky Counter’ on the site’s ‘Under
Construction’ page. According to the scheme, visitors had to tweet
about one of six Uniqlo’s products that they wished to receive at a
discount price when the portal was launched. The product that would
get maximum tweets would be sold at a discount price, the extent of
discount depending on the number of tweets received for that product.
The campaign was so successful that Uniqlo made it to twitter trends
during that month giving a boost to Uniqlo’s brand awareness.
Apparel retailer H&M has taken advantage of the location based
element of the game ‘MyTown’. H&M was one of the first brands to sign
on the games new feature called Product Check-In, which encourages
its players to check into real world stores and scan barcodes. Through
MyTown, H&M was not only able to reach out to its 2.8 million players 25but also increase footfall in its stores via Product Check-In.
The cost of raw materials has gone up significantly in the commodities
market. Consider cotton, which has increased by more than double in the
past two years. Industry expects this price rise to continue in the near
future as well. Earlier this year, US which is the world’s largest cotton
exporter is reported to have sold out all its cotton from the coming
harvest while the fourth largest exporter, while Australia which is the
fourth largest exporter has sold out up to 80% of its cotton from the
26coming harvest.
Spot Prices of cotton (cents per pound) as per the Cotlook ‘A Index’
Cotton is a major raw material in most apparel. It is estimated that a pair of
jeans on an average cotains almost 2.5 lbs of cotton. Change in cotton
prices will have a very significant impact on the cost of apparel production.
Below diagram shows impact of cotton prices on price of clothing.
Wool prices in Australia, the world's biggest producer and exporter, may extend gains from the highest level in at least 16 years before new supplies
57later in the year bring down costs.
Rising oil prices, cotton shortages and increased demand are driving unusual 58price increases in polyester.
11
Prices of other commodities have also risen sharply. Fashion retailers canot
simply ‘blend’ their way out of this problem. High prices of cotton and oil
have already caused a 20 to 25% increase in polyester prices. Wool prices
in Australia, the bigest producer and exporter of wool, have surged 39 %
this year, reaching a 16 year high.
Rising cost of labor is prompting apparel manufacturers to diversify
sourcing from China and look towards other low cost regions as well. In
the past 5 years, hourly wages in the apparel industry in China have
increased by more than 80%. This year, wage hikes will be even higher - at
28about 20%. Apparel making is a labor-intensive activity with labor costs
29estimated to account for almost 15 to 20 percent of the product cost.
Increasing international freight is further adding to these costs. As a result,
many companies like Ann Taylor, J.C. Penny and Coach are considering
shifting at least a part of their sourcing to lower cost countries like Vietnam,
Indonesia. Initial successes of these firms, will prompt other players to join
in too. Shipping figures for the last one year already show a shift of US
imports of apparel and footwear from China to South East and central
Asia. The graph below shows quarter wise reduction in the proportion of
US imports of menswear from China. Chinese manufacturers will now
have to embrace better manufacturing practices and improve their
productivity and maintain their competitiveness.
It is necessary to understand that although companies might not shift their
entire production out of China, a ‘China plus’ lower cost regions strategy is
likely to be adopted. Amidst all this, fashion retailers can be expected to
continue diversifying their sourcing.
US Bureau of Labor statistics clearly show that apparel prices have been on
the decline for more than a decade now. However, Apparel makers and
retailers will no longer be able to absorb these immediate increases in input
prices and will have to pass it on to their customers – deviating from a
12-year-old trend of declining (real) prices. Many retailers have already
announced at a 10% to 15% hike in prices because of increase in raw
31material, transport, labor and other input costs. Some of these include
Nike, Brooks Brothers, Levi Strauss & Co., Wrangler jeans maker VF Corp.,
J.C. Penney Co., Steve Madden.
6. The Cloud, SaaS and BPaaS
Cloud computing has for long been seen as the solution to optimizing costs
in the wake of scaling business needs and limited IT Budgets. The recent
Gartner CIO Survey (Jan-2011) identified ‘Cloud Computing’ as the top
technology priority for CIOs worldwide. The survey also claimed that about
43% of CIOs would see majority of their IT needs fulfilled via Cloud
Applications or SaaS within the next 5 years.
Retail has traditionally been a low margin business. This perhaps helps to
understand the high level of awareness about cloud computing in this sector
as uncovered by a recent Forrester research. Cloud computing offers a
As retailers continue to optimize their business
processes in domestic and global markets, they are
increasingly inspecting what is core and what is not. To
satisfy this trend, leading technology and solution
vendors are offering “pay as you use” based models for
various retail processes and technology needs.
Some of the retailers in US have already started collaborating to reduce
transport costs through an initiative called the ‘Empty Miles program’
through which they can share information about empty trucks on their 32return journey which then can be used by other members. Thus,
retailers who are members of this initiative will not have to pay for
round trips when they want to ship goods in one way only. Some of the
46 members are Macy’s, JC Penny and Wal-Mart.
As transportation cost continues to rise further, we may see more such
cases of industry wide collaboration.
12
33great opportunity to reduce IT opex by almost 30%. As retailers continue
to expand across national borders, cloud computing can help them in
starting their operations at significantly lower costs (capex).
With growing cross channel sales, increasing role of social media in
customer engagement and location based capabilities provided by mobile
solutions; customer relationship management faces new challenges.
Retailers now have on their hands a vast resource of information that they
could process to enhance customer experience. Up-scaling traditional
architectures to provide for these services will be very costly. Furthermore,
customer segment analysis done to identify distinct consumer segments
and efforts undertaken to market these segments deals with large amounts
of data and requires large computing power. Similarly, forecasting, ‘what if
analysis’ and other ‘on demand analytics’ carried out for determining
pricing, promotion & merchandising need large computing power,
although in lumps. Retailers need to be able to optimize their infrastructure
requirements taking into account traditional seasonal spikes as well. Cloud
computing provides retailers with high quality, scalable IT at lower costs,
“Eli Lilly & Co, the large pharmaceutical firm, recently completed data
analysis on a new drug using Amazon EC2. The total bill came to $89.
Had the company chosen to do the analysis in house, it would have to
spend on the 26 servers, software licenses, maintenance fees, data
center space as well as on power and labor. Choosing the cloud
computing route also helped the company speed up its product launch
by almost 3 months.”
Fashion retailers can too leverage the benefits of cloud for discretionary
analytics projects, which could provide them with better consumer
insights. Cloud computing can not only make way for such initiatives
that are held up because of prohibitive costs, but also speed up by
saving time which would otherwise have been spent on provisioning
and procurement.
enabling them to focus on their core business areas. It reduces the lead-
time for procuring and installing IT Infrastructure but also offers flexible
computing resources. Retailers can quickly ramp up or ramp down their
computing resources as needed. This makes clouds well suited for sporadic,
seasonal or temporary work, for finishing tasks at lightning speed and
processing vast amounts of data, thus helping retailers be more responsive
to changing market trends.
With growing e-commerce business, retailers will have to invest to upscale
their existing systems. Retailers are increasingly opting for cloud based
e-commerce solutions. An on-demand approach to IT reduces risks
involved in tapping new markets through e-commerce and makes
organizations more responsive. PoS have evolved from simple transaction
recording systems into complex solutions that have an impact on almost
every aspect of a fashion retailers business. As such, high availability PoS
systems that can process massive amounts of data are critical to business
success. Cloud based PoS solutions available in the market help retailers
overcome these challenges. A ‘pay as you go’ model further reduces risks
involved and helps match IT demand.
Other candidate areas for early cloud adoption as indicated by a recent
Gartner survey are SCM and procurement, enterprise payroll, HR.
eBay has bought a tiny PHP specialist (shopping engine specialist Magento) as a precursor to rolling out a massive cloud commerce platform-as-a-
59service for retailers, complete with an app-store fed by web developers.
Verizon's On-Demand Cloud Computing Solution Achieves PCI Compliance for 60Second Consecutive Year.
61Oracle Announces Cloud Infrastructure Stack.
13
Firms are still grappling with concerns before adopting cloud. Besides
security of data and service availability, the other problems are lack of
clarity on the amount of savings and assurance of consistent, responsive
support. Companies should consider various factors like business criticality,
security, process dependency, load stability, responsiveness, opex and
capex before deciding to move its applications to the cloud. Fashion
retailers can start by moving independent, non-mission critical applications
to cloud first to be able to better estimate the costs and savings involved in
transitioning to cloud and get an early view of potential problems areas
before moving their core systems to the cloud.
The benefits of cloud are huge and cannot be ignored. Many software
solution vendors have already started providing cloud-based service. The
shift to cloud remains inevitable.
7. Driving IT Optimization
Managing the organizations within the limited available
IT budgets has always been a tough balancing act for
most CIOs. With rapid cross border expansion,
consolidation – particularly in the luxury segment,
changing customer attitudes and rise of new CRM
opportunities, the fashion CIO’s budgets are further
stretched. In the Gartner CIO survey of 2010, many
CIOs said that they were digging into their opex to
accommodate cape requirements. Amidst all this,
opt im iz ing IT expend i ture becomes an
obvious choice.
Selling to today’s tech savvy customers makes IT investments imperative
for fashion retailers. Rapid cross border expansion is necessary to
capitalize on available growth opportunities. Growing online and
multichannel trend have already claimed a share of IT expenditure. With
newer growth opportunities like social CRM, mobility gaining prominence,
fashion retailers’ IT landscape is getting more complex. As ever-dynamic
markets force fashion retailers to focus on their core business processes, IT
outsourcing from fashion retailers is all set to increase in size and scope.
While traditionally, IT outsourcing only meant application support and
maintenance activities, nowadays it also includes areas like analytics and
business intelligence, testing and infrastructure management. With fashion
retail businesses spread across vast geographies, outsourcing of
infrastructure management can be attractive.
Fashion retailing faces uncertain times. Organizations would want to be
lean enough to be responsive to market forces. IT and back office need to
be flexible enough. Many IT service companies have started providing
outsourcing on a service based delivery model than a resource based one.
Such flex delivery model based non-linear outsourcing helps address the
pain points of traditional outsourcing models, reduces risks involved for
retailers and ensures that IT demand is exactly matched to supply. Flex
delivery model can help achieve predictable results and provide ‘on
Demand’ expertise.
Shared services have repeatedly proved profitable for saving costs as well
as being able to provide reliable and high quality service to business lines.
More than 80% of the Fortune 500 companies have deployed shared
services for some function or the other - the most common functions
being Finance, IT and HR. Even the mid size companies are now looking at
this model. Modularized ‘managed services’ offering by IT service
companies have made it possible for organizations to opt for outsourcing
some of the IT shared service processes. Shared services have shown
33significant success in cutting down costs in IT management – up to 35%.
Although cost reduction is the dominating perceived benefit of this model,
organizations are taking notice of other advantages as well. These include
62Nasscom sticks to its 16-18% growth forecast despite US economic woes.
The resource realities indicated in the 2011 CIO Agenda Survey raise the urgency and importance of adopting new infrastructure and operations
63technologies, such as Cloud services and mobile technologies.
14
pooling of expertise to allow flexible reallocation of human resources and
improvement in utilization levels, single point of service to ensure that best
practices are followed across the business and ability to streamline
organizations and introduce a higher capability for innovation and
absorption of rapid business changes. Besides these, establishing SSC has
allowed organizations to regulate discretionary spending at the business
unit level by introducing certain processes within the organization.
Deployment of IT and other advisory shared services is picking up recently
as can be seen from the below diagram.
Growth in IT shared services as compared to traditional services between
35the years 2007 and 2009
Businesses want to focus on core areas of their business and yet avail
consistently high quality of service across all its operating geographies.
With profit margins squeezing and fashion retailers trying to further
optimizing their IT.
Faced with challenges of an uncertain retail environment and
international expansion, fashion retailers will have to focus on further
optimizing their cost centers. Flex delivery model and shared services
outsourcing holds huge promise for fashion retailers.
8. Consolidation among software
vendors
A look at the top ERP solution providers (for fashion retailers) will show
an attempt to provide end-to-end, vertical specific solutions. This trend
Software vendors are now increasingly ‘verticalising’
their solutions. Leading vendors have resorted to
inorganic growth to fill in white spaces in their
portfolio. With recent acquisitions and mergers,
leaders are poised to provide “one stop shops” for
retail processes. Fashion retailers will need to pay a
close watch on which of these vendors is able to
provide integrated offerings of their portfolio. CIOs
will need to rethink their application portfolio
management strategies as acquisitions of “Best of
Breed” platforms and rise in BPaaS/SaaS solutions
continue unabated.
Top-tier data centre systems makers continue to roll out prepackaged hardware-and-software offerings as they look to grow their capabilities in the
65increasingly competitive converged infrastructure space.
(Outsourcing) Contract activity will "creep back throughout 2011,64as the recover stutters and buyers pull the trigger on sourcing activity.
15
has been achieved by significant mergers and acquisitions among software
vendors in retail domain in the past few years. 7 of the top 10 software
vendors (serving fashion retail) have pursued inorganic growth to
29transform their offerings into retail specific products . The two most
prominent motives are –
i. To f i l l i n g a p s i n t h e i r e x i s t i n g o f f e r i n g –
Today’s fashion retail business is a complex business requiring specialized
solutions for various aspects of the business. To be able to offer an end-to-
end solution that can compete with a system built with ‘Best-of-Breed’
approach needs specific skills that cannot be acquired overnight. Software
vendors have had to acquire other firms to be able to fill in ‘gaps’ or
strengthen their weaker offerings.
ii. To gain critical mass and make their solutions viable –
Software vendors had to ensure that a significant number of users make
use of their solutions. This helps pull in more partners who can then
provide system integration and support services. Quite a few acquisitions
have given software vendors access to markets where they would have
otherwise struggled.
As emphasis on SOA increases, it becomes easier to integrate these new
systems. Software vendors have benefitted from this and have been able to
integrate the newly acquired systems into their portfolio in a very
short time.
Consider the example of SAP. SAP’s acquisitions have helped it fill gaps and
improve its service offerings.
Acquisition of Sybase will give SAP full fleed data warehousing capabilities as well as access to mobile solutions.
Business Objects which was acquired in 2007, is provided aspart of analytics in SAP's retail solution.
SAP acquired Praxis in 2006 and got access to its web based CRM [Netpoint focus] and e-commerce [Netpoint commerce]
SAP acquired Triversity, which was a leading solution provide for POS, loss prevention and other solutions
SAP acquired Khimetrics in 2005 adding pricing andpositioning to its portfolio
Oracle
Micros-Retail
Snow Valley, eOne Group, Datavantage,CommercialWare Fry Inc., Redsky IT
IBMTriraga, Netezza, Outblaze (email service assets),Cognos, Sterling Commerce
Retek, Profitlogic, Seibel, Bharosa Inc, eServe Global, ATG, Advanced Visual Technology, 360Commerce, Demantra, Hyperion
These various acquisitions have allowed SAP develop its competencies
across different aspects. Many of these acquired competencies form a part
of SAP’s Business ONE and SAP end to end implementation for retailers.
SAP is not the only vendor to have followed this path. Other retail
software vendors seem to have followed a similar strategy. The diagram
below shows a few key acquisitions/partnerships that have helped
vendors strengthen their solutions for retailers.
The above list of acquisitions/partnerships is not exhaustive. Only a few of
the acquisitions after 2005 have been considered.
Adopting end-to-end solutions provides many benefits to fashion retailers.
It significantly reduces system integration efforts (capex), expenditure on
support and maintenance (opex), easier IT governance (single vendor
who owns end-to-end responsibility). Vertical specific solutions imply
reduced customization efforts and quick deployment. Furthermore,
vertical-specific solutions help businesses address problems that are
unique to them in a better way. E.g. Fashion retailers have unique
challenges with respect to merchandising, size profiling and the high impact
of product lifecycle on price. Vertical specific solutions help approach such
challenges better. As fashion-retail margins are comparatively low,
businesses are more inclined towards solutions that can be implemented
easily and get the work done. Although growth opportunities are available,
overall retail business environment remains challenging. Fashion retailers
will want to invest in IT solutions to gain an advantage over their peers in
such an environment. Most Fashion retailerss would rather prefer quick
returns on their investments than a long ERP planning and implementation
exercise that can stretch into years before giving out its promised benefits.
ERP vendors are being forced to pursuing inorganic growth after realizing
shifting customer preference for a quickly deployable, end-to-end
solution. Much of the inorganic growth has been achieved by acquisition of
‘Best of Breed’ solution vendors, who typically are smaller than ERP
solution providers. Fashion retailers are therefore advised to assess the
viability of a vendor before adding any ‘Best of Breed’ solution to
their portfolio.
MICROS-Fidelio UK has acquired UK-based Snow Valley, a provider of67e-commerce services and technology.
The combination of Sybase database and mobile technology has found a perfecthome at SAP, and SAP’s yearnings for a fast track to one billion users may
66have found its perfect home in Sybase.
16
Regional Overview
This section describes some prominent macro-factors
that will affect regional fashion markets.
North America
• As US unemployment continues to top 9% for 20 straight months now
– its longest streak ever - a stark polarization can be seen emerging in
the American market. A recent survey showed that the number of
shopping trips of families with income levels of more than $100,000
have gone up by 5%. While those with income lesser than $100,000
2have cut down on their shopping trips by 4%. The well off households
seem to be back to their spending habits while the other majority of
households are continuing with a cautious approach. The middle
segment retailers will thus face increasing price pressure from the
discounters and flash sale sites as discounting and promotions are
expected to continue at a feverish pace. They will have to differentiate
themselves by communicating their value for money and identify with a
particular market segment. High-end stores like Neiman Marcus will
return to better profits.
• The group aged 18 to 24, better known as the millennials will give a
boost to multi-channel and online shopping.
• Government Statistics estimate that more than a third of American
women to be obese and more than two third to be overweight.
However plus size clothing represents less than 17% of total revenue
sales (women’s clothing sales). This market continues to be
underdeveloped as most fashion labels shy away from producing ready
to wear clothes above size 14 due to concerns about image and
brand heritage. Consequently, the choices in this segment have been
very limited. Recently, there have been a few attempts to tap this
market by retailers like Forever 21 (Faith21), Target (Pure Energy) as
well as fashion labels like Marc Jacobs, Michael Kors. However, in
order to be successful in this segment, fashion labels will have to
develop specific skills. Tapping this market remains challenging.
South America
• Mexico and Brazil are two key markets in this region. With bulging
middle age population, a rapidly expanding middle class and
increasing disposable income, fashion markets will see strong growth
opportunities in this region.
• Brazil has traditionally been a strong market for apparel and footwear
with global retailers like C&A, H&M, and Zara having a active
presence in the region along with a few sophisticated homegrown
players as well. Besides being the fifth most populous state, Brazilians
also happen to spend the most among the emerging economies
5(in per capita terms) when it comes to fashion. Brazilian consumers
are considered to be very fashion conscious and more willing to shop
on credit for new clothes. Most apparel retailers have a joint venture
with Banks or have their own financial operations to support ‘store
credit cards’ which are estimated to support almost 70% of their total
transactions in certain cases.
• With Brazil set to be the host for 2014 Football World cup as well as
2016 Olympics, influence of sports on fashion trends will be strong.
17
Middle East
• Studies forecast Saudi Arabia to have highest growth in spending
power by 2015. The proportion of ‘under 15’ population is 39%, which
represent the rise of an internet savvy generation. Youthful
demographics are expected to drive sales in this region. Branded retail
continues to be strongly dominated by Western brands like River
Island Zara. Many new entrants like USA’s Foot Locker and UK’s New
Look are trying to expand their presence in the region. The retail mall
market in UAE alone is estimated to reach $26 billion by 2015 and the
7fashion industry is expected to grow at 15% this year.
• Growth in spending power amongst women in MEA region is
estimated to be to be the highest in the world. However, regional
religious beliefs could force companies to relook at
distribution strategies.
Europe
• The changing demographics of Western Europe will pose a challenge
to fashion retailers. In countries like Italy, Germany, Greece and Spain
the under 15 age band accounts for less than 15% of the population as
7 compared to 30% in other emerging markets. The age group 45 to 59
is looked up to as the next opportunity market. Although this age
group has higher purchasing power, they tend to be more
‘sophisticated’ consumers and typically spend a lesser proportion of
their earnings on clothing. The recent success of NYDJ (Not Your
Daughter’s Jeans) has shown that this segment can be targeted
profitably. Working women constitute for 43% of Europe’s working
7population and hence are likely to emerge as a key segment. The
Eastern Europe the age groups 17-29 will contract while age band of
30-44 will emerge as a highly attractive consumer base. Fashion brands
will have to realign their focus on this market as well.
• The Department for Environment, Food and Rural Affairs – a UK
government agency launched its ‘Sustainable Clothing Action Plan’ in
2009 encompassing various initiatives that address the impacts across
the lifecycle of our clothes, from take-back recycling schemes in stores
to carbon labels and use of organic materials. This plan has brought
together over three hundred UK fashion & textile organizations, from
high street retailers, to designers and textile manufacturers to battle
the environmental impacts of the fashion industry. Major retailers like
Mark and Spencer’s, Tesco, Sainsbury have already signed up on a
variety of actions to increase their ranges of Fair trade and
Organic Products.
Asia-Australia
• China’s working population will show negative growth for the first
time in by 2013. However, the proportion of people in the age groups
of 60 and above will be only about 13.3%. Rapid increases in wealth,
shifting attitudes towards luxury goods and rapid urbanization will
make China the world’s largest consumer of luxury goods by 2015
reaching 180 billion RMB (US $27 billion).
• Japan's luxury market has been among the hardest hit by the global
economic crisis. Post natural crisis, an increasing number of Japanese
consumers are avoiding conspicuous consumption. Almost a third of
the respondents in a recent survey claimed that they might not return
to their luxury spending habits even after the economic crisis
has passed.
• Growing costs of production, low availability of labor, in China will
force its apparel makers to look for methods to increase productivity.
Meanwhile, global fashion brands like Chico’s, Coach, J.C. Penny have
already started looking at diversifying their sourcing by shifting a part of
it to other lower cost regions for sourcing like Indonesia, Vietnam,
India and Bangladesh.
• Increased incomes, urbanization and growth in organized retail have
made India one of the fastest growing fashion markets in this region.
Increased fitness awareness have helped growth of ‘sports inspired
casual wear’ where sportswear brands like Reebok, Adidas, Nike have
taken up a major chunk of the casual wear market. Over the counter
fabric sales (ready to stitch clothing) still constitutes 23% of the market
and is expected to grow at 5% annually.
• Growth in Australian expenditure on clothing and footwear is
expected to remain sluggish to 2015, with the CAGR of less than 2%.
The region’s most rapidly expanding population segment is that of
‘over 65’ and the second most rapidly growing segment will be that of
‘under 15’. Value conscious consumption will be the overall trend in
this region.
18
Wipro Fashion Retail Services and Solutions
This section describes our services and solutions that
helps create and maintain market leaders.
0Wipro’s dedicated fashion retail team has been providing 360 IT services
to global fashion, apparel and footwear retailers. Our 2,000+ fashion
strong fashion consultants have helped create leaders in apparel retailing.
• Our team works with leaders in every part of the globe including US,
UK, Middle East, Asia and Pacific
• Dedicated team of 130+ domain experts - Fashion Advisory Services
• 80% of workforce is certified on both domain and
technology competencies.
• Wipro’s Strategic alliances with Oracle Retail (Tier 1 Partner), SAP,
IBM, Microsoft and best of breed vendors enables us to advise and
implement best in class IT solutions for our customers
• Wipro Fashion Lab of the Future that drives Innovation fueled by
technology advances
• A host of SaaS based solutions developed by Wipro that covers the
entire spectrum of fashion retail
Wipro’s fashion practice offers 4 services that cover the entire spectrum of
needs for our customers:
1. Business Transformational Services
2. Customer Experience Services
3. Operational Excellence Services
4. Technology Transformation Services
Business Transformational Services
Wipro’s Fashion Advisory Group, a team of 200+ consultants provides
strategy, process excellence and change management services. Coupled
with our 3,000+ strong global delivery teams, our teams have enabled true
business transformation enabling retail leaders. Wipro’s fashion advisory
services have enabled customers to expand globally, define and execute
seamless omni-channel strategies & achieve retail operational excellence.
Customer Experience Services
Wipro’s dedicated Fashion Customer Experience Practice helps fashion
retailers gain a better understanding of their customers across all touch
points and at various stages of the customer lifecycle. This team is backed
by professionals from the industry, fashion schools, consulting and
technology backgrounds focusing on stores, e-commerce, mobile, social
media and contact center. CXP service offerings include development of
customer experience roadmap (CXventure), e-Commerce experience
(i-perience), personalization (all4one), customer loyalty programs
(loyalight), workforce training (Coach), marketing solutions (marketmine),
cross-channel solutions (X-channel) and channel specific services (X-go
and X-touch). A decade of experience in implementing cross channel
e-commerce and store systems has enabled our Fashion practice to offer
unparalleled value to our customers. Wipro has invested in creating
ENCORE, a digital commerce eco-system, based on leading technologies
in the industry and enables fashion retailers to achieve significant ROI and
time to market. Wipro’s ‘ClickLoyalty’ platform drives a greater share of
the wallet and engages consumers in a long-term relationship. It covers
multi level rewards and promotions along with superior loyalty analytics.
Our teams have enabled retailers achieve greater understanding of their
target markets, micro-merchandizing and targeted promotions through
our customer centricity solutions.
Operational Excellence Ser vices
Fashion retailers have unique supply chain challenges due to the
seasonality, high external collaboration touch points and high impact of
product lifecycles on pricing. Wipro has a dedicated Fashion Operations
practice that leverages our expertise across merchandizing, supply chain
consulting, planning, execution and analytics to help retail companies
worldwide. Wipro has invested in creating ‘ProfitLock’, a solution that
provides retailers a 360-degree view of shrink lifecycle and enables to
proactively and reactively manage shrink. Wipro manages the supply chain
for some of the world’s largest fashion and footwear companies.
For fashion retailers, demand shaping is as important as demand
forecasting. Large number of SKUs, frequent use of OTB and unique ‘size
profiling and optimization’ challenges make merchandising and pricing
very complex. Wipro is a leader in implementing merchandizing platforms
such as Oracle Retail and SAP Retail. We are premier partners with
19
vendors that provide technologies and platforms for managing
Retail operations
Wipro’s Corporate Retail Practice offers solutions for HR, Finance and
Payroll. Our enterprise applications services team, a 20,000+ pool of
trained resources, implement leading technologies for our customers.
Coupled with our strong BPO teams, we offer a complete array of services
for managing your vendors, employees and partners.
Technology Transformation Services
Wipro’s Technology Infrastructure service provides Infrastructure
optimization service, Infrastructure management service and
‘Infrastructure set-up and provisioning’ on a pay per use basis. Wipro’s
investments in Managed Service Quantum Innovation (MSQI) have
helped it develop unique business and technical capabilities in remotely
manage domain and building infrastructure. This helps Wipro’s customers
achieve significant cost optimization, streamlined in-store operations, real
time visibility and control of assets and optimize in-store energy spending.
Fashion Lab of the Future
Wipro has invested in creating a Fashion Lab of the Future that researches,
pilots and harnesses technology innovations to create significant business
opportunities for our customers. Several of our innovations have become
part of our customer’s Store of the Future. We have partnered with our
customers in their innovation journey in creating tools that have endeared
consumers and created a lasting relationship. Some of our
innovations include:
• ‘Web presence Sentinel’ – a tool that allows fashion retailers to
monitor and track their online presence
• Cnergy, SRM (social reputation management), SEA (Search Engine
Analyzer) and SocialMojo help fashion retailers engage customers via
social tactics
• Shopping Yoda – a handheld platform, TINA – the next generation
store associate, Fashion Surface all enable a superior in-store
shopping experience
This industry update has been created by Wipro Fashion Retail Practice.
Principal authors include:
1. Gaurav Kawale – Associate, Fashion Retail
2. Devikala Gopalakrishnan – Manager, Fashion Retail
3. Puneet Yadav – Associate, Fashion Advisory Group
4. Garima Beniwal – Associate, Fashion Advisory Group
5. Sathiyanarayanan Vijayaraghavan – Practice Head, Fashion Retail
We would like to thank various member of Fashion Advisory Group,
Fashion Solutions Technology Group and other members that have
contributed to this effort.
20
References -
1. Datamonitor – various Apparel and Footwear Industry Reports
for 2010
2. Nielsen 2011 Outlook
3. A. T. Kearney: 2010 Global Retail Development Index
4. McKinsey Insights China: Understanding China’s love for luxury
5. McKinsey Quarterly: How half the world shops
6. A. T. Kearney: 2008 GRDI
7. Euromonitor: November 2010
8. Mintel: February 2011
9. Forrester and Bizrate: Dec 2010
10. Nielsen: Trends in online shopping 2010
11. Forrester Research Online Retail Forecast, 2009 To 2014 (US)
12. Forrester: Web’s impact on in store sales
13. Forrester: Luxury e Business Adoption
14. Accenture: Dec 2010
15. Brand Anywhere and Luth Research, 2010
16. McKinsey Research: Rebirth of Luxury, Sep 2010
17. Big Research, 2010
18. Forrester: Online Marketing Benchmarks
19. Forrester: State of online retail 2011
20. Forrester: Will Facebook drive e-commerce, Apr 2011
21. Nielsen: Online Consumer Behavior 2009
22. Macworld press release – Aug 2010
23. Hypestat.com
24. Inquisitor, 2008
25. RIS news: Feb 2011
26. Bloomberg: March 2011
27. Robert Antoshak, Olah Inc, Feb 2011
28. Accenture: Wage increase in China, 2011
29. WSJ – Jun, 2010
30. Reported from PRNewswire, source: Journal of Commerce / PIERS
31. CNBC - Feb 2011
32. RIS News top 10 software vendors for apparel retailers
33. Wipro Research
34. Deloitte Global Shared Service Survey – 2011
35. Deloitte Global Shared Service Survey – 2009
36. WSJ as on June 15, 2011
37. Reuters in May 2011
38. Reuters in Jun 2011
39. Kyiv Post in Jun 2011
40. The Tennessean in Jun 2011
41. Shop.org in Apr 2011
42. Shop.org in Mar 2011
43. Mint in Mar 2011
44. Reuters in Jan 2011
45. Liverpool Echo in Jun 2011
46. fashionunites.co.uk in May 2011
47. Shop.org in Apr 2011
48. Shop.org in Apr 2011
49. Shop.org reported in Apr 2011
50. Shop.org reported in Apr 2011
51. Shop.org reported in Mar 2011
52. Shop.org reported in Mar 2011
53. Shop.org reported in Apr 2011
54. in May 2011
55. ABC News in May 2011
56. Shop.org in Mar 2011
57. ET in Jun 2011
58. Specialty Fabrics Review magazine in Jun 2011
59. theregister.co.uk in Jun 2011
60. PRNewswire in Jun 2011
61. WSJ in Jun 2011
62. ET in Jun 2011
63. Gartner CIO survey 2011
64. cio.com on 2011 outsourcing trends
65. eWeek in Jun 2011
66. IW in May 2011
67. Press Release in Apr 2011
21
About Wipro Technologies
Wipro Technologies, the global IT business of Wipro Limited (NYSE:WIT) is a leading Information Technology, Consulting and Outsourcing company, that
delivers solutions to enable its clients do business better. Wipro Technologies delivers winning business outcomes through its deep industry experience and a
360 degree view of “Business through Technology”– helping clients create successful and adaptive businesses. A company recognized globally for its
comprehensive portfolio of services, a practitioner’s approach to delivering innovation and an organization wide commitment to sustainability,
Wipro Technologies has 120,000 employees and clients across 54 countries. For more information, please visit www.wipro.com
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