What is Inventory Localization in fashion retail?

inventory localization

Blog Written By | K3 Technologies

Digital Versus Physical: Understanding Inventory Localization in Fashion Retail

Technology has made mind-reading seem commonplace by customizing our online lives. The content availed to us on various social media platforms is relevant, comfortable and familiar because of algorithms that ensure we see exactly what we prefer.

This concept is not lost on digital fashion retail platforms. They too have adopted these strategies to maintain the attention and interest of clients, and boost sales as a result. Products displayed online to customers are based upon answers to a few questions, as well as previous searches and purchases alike.

Physical stores are then placed at a disadvantage in this regard. With such personalization online, most consumers have little to no patience for the traditional style of shopping. Walking in and out of various stores while searching through racks of clothing, then fitting a  few before purchasing is tedious for the modern-day consumer. As a result, physical stores are facing extinction if they don’t adapt quickly.

The reality is that it is virtually impossible to customize physical stores in the same way as digital stores.

But Perhaps There Is A Way

Physical stores, particularly franchise stores, have always standardized everything, their products, customer service, right down to how clothes are organized in the store. This can no longer work in this digitized age; standardization is dying and localization is rising.

Localization involves using vast amounts of data collected through online platforms and from in-house staff on the ground to customize a customer’s entire experience in a physical store. This will certainly affect the strategy of inventory management retail stores employs due to inventory localization since the products carried by the stores will be informed by the unique picture painted by the data analysis.

Success Stories

Some brands have successfully implemented inventory localization for their brick-and-mortar stores. One such brand is H&M. After dealing with years of poor sales and losses due to bad market predictions, H&M employed the use of big data and analytics for nearly perfect product prediction which then helped in pricing and proper stocking of inventory. They analyzed data from product returns, loyalty cards, and receipts to better understand their clientele at each location and facilitate a suitable localization retail strategy.

Zara is another leading fashion brand that has found success in inventory localization. The brand invested in technology by attaching a microchip to each of their garments. This enables tracking all the way from their warehouse to the point-of-sale section at their stores. By analyzing this data, Zara is able to determine which designs are selling fast and need to be restocked, which ones are not and need to be pulled or re-deployed to another store. Therefore, Zara ensures that its customers in varying locations are getting exactly what they want when they want it; which is about as close you can get to the effectiveness of digital retail.

How Exactly Does This Work?

Localization requires data collection from various sources, primarily:

  • Online stores and platforms
  • In-house stock tracking
  • Sales management and staff reports
  • Receipts
  • Loyalty cards
  • Returns

Data collected from these sources is then analyzed to give a clear picture of each physical store and respond to its needs rapidly and effectively. In fact, data from online platforms can be used to provide a seamless online to an in-house experience for a customer. The customer can order an item online and come to an in-house store to fit and collect it before taking it home. Or a client can return a product ordered online to a physical store and collect their refund or replacement.

This convenience is quite appealing to the modern-day shopper and can greatly boost customer loyalty and increase revenue for the store. It is also within the reach of many apparel stores that may not have unlimited resources to collect data. By simply merging their online presence with their in-house stores (by adopting an omnichannel strategy), great improvement can be witnessed in a relatively short period of time.


Why is Change Management Key to ERP Implementation Success?

erp implementation

Blog Post Written By | K3 Business Technologies

It’s one of life’s contradictions: When you are making improvements, facing even the most positive change is hard, it can feel like a bad thing. In the retail industry, ERP implementation is a very good example. The advantages of ERP software for the fashion and apparel industry are proven, from increasing profits through improved forecasting to optimizing your organization’s operations to simply save time, but the journey of implementing and landing a new system is long and hazardous.

Once the most suitable ERP system has been picked, your entire organization will be staring down a huge shift. And while you’ll all know intellectually that the improvements are great, the new systems and new interactions are bound to involve discomfort, high emotions, and yes, bunches of stress. The key to overcoming the awkward elements of change so you can fully realize the benefits of ERP? That’s where a concept know as Organizational Change Management comes in.

Panorama Consulting Solutions puts it in perspective this way:

“These changes in business processes, which are inherent in any successful ERP implementation, create changes in corporate culture and climate. Though less obvious, perhaps, than changes in job functions, these subtle shifts will be very important to your staff and must be managed to avoid resentment, fear, and anxiety.”

A couple of key steps

Here’s a bird’s eye view of the key steps involved in applying OCM as you begin your ERP flight:

1. Take time to establish a project charter

The project charter is simply your retail EP team’s concise statement of core goals, objectives, and intent that can serve as a map for whatever comes next, according to ERP Focus. if you skip this step, you miss the chance to establish a vision for your project.

2. Present an overview and share knowledge with everyone affected (and that’s everyone)

Employees need more than training to understand the need for (and importance of) the new ERP system implementation in the company. At a minimum, you’d need to do your best to communicate why your company chose ERP, how the system will improve jobs and how their particular position will be affected. 

3. Do an ample amount of training

While the retail business is famous for its quick learners, you can’t underestimate the amount of training you’ll need to implement ERP for lasting business success. Remind yourself that literally the entire organization has experienced a disruption in its flow and duties, and plan education and training accordingly.

Start with ERP-related training to ensure that employees learn the software, sure, but also bear down on the kind of training that lets everyone learn the new business processes. Follow through with training that emphasizes the new corporate culture and any shifts in employee interactions. it will be tough and take a while, but the shift to an optimized and highly-profitable business model through ERP will be worth all the effort.

4. Be sure your support is evident from the top down

One of the best ways to manage the change that comes with ERP implementation is to make sure everyone knows the whole company is dedicated to its success. So present a unified front. Executives, in particular, should support the change fully and make sure employees company-wide know they’re behind the effort. If top management doesn’t engage with the process or implementation, employees will notice and their own commitment will flag.

K3 business technologies have a number of solutions for the retail industry, to find out more contact us on  info@allonline365.com or  +27 (21) 205 3650.


Leveraging ERP systems to embrace change in the fashion industry

erp systems

What is ERP?

We live in an amazing era of technology-driven change.  The way we buy fashion has been transformed: shopping has lost the shackles of the traditional storefront and is now at any time and every place.


“ERP is designed to enable a total view of what is going on in an organization at any instance and over time, so you can problem-solve on the ground and plan for improved efficiency in the future. Its main function is to pass accurate, timely information back and forth within a business, between people and technology in order to prevent miscommunication, speed things up and reveal possible inefficiencies.”

Consumers are able to choose any number of ways to interact with your brand from brick-and-mortar stores, mobile phones, the Internet, to social media. As such, the way fashion companies design, manage, sell, communicate, and market products have changed beyond recognition. Our need to keep up is ever more important as we aim to find balance in the key principles of low-cost goods, flexibility. quality, on-time delivery, and speed to market coupled with a loyal customer base. None of this is possible without leveraging the incomparable power of ERP software.

ERP software, if managed well, can be the catalyst that takes your business from good to great by eliminating expensive, time-consuming, and error-prone interfaces and replacing them with a new and efficient way of working. From the initial concept to the product in-store, ERP is changing the face of the clothing and fashion industry.

The importance of leveraging technology

Leveraging technology in ERP is the difference between flat sales and achieving exceptional growth. The most successful companies will be those that take advantage of web-based technology by implementing systems built on sound existing infrastructures and well-functioning ERP systems. Everything from apparel, and footwear, to accessories to name a selection, has been greatly influenced by developments and innovations in technology.

One of the biggest effects has been in production processes where automation and speed to market have reduced lead times allowing ‘fast fashion’ to happen. Gone are the days where design, production, order processing, and distribution are done by hand. Globalization has resulted in a need to forge tighter links up and down the supply chain to integrate business functions and allow data to be shared across many boundaries and divisions.

As companies grow it becomes increasingly important to engage with an effective ERP system, one that is geared to the fashion, apparel and textile industries and one that allows a fast analysis of trends and developments.

Trends in enhanced ERP systems

Current trends in ERP systems include the move toward standardization, to cloud-based solutions, and a move to more customer-centric approaches:

Move towards standardization

The current trend in ERP systems is moving away from customization to standardization. The benefit being that generic ERP provides everything retailers need without the lengthy processes involved in tailoring systems to individual nuances. More often than not, nuances identified by companies, in fact, do not exist. Retailers need to trust the expertise of existing ERP systems. There are also clear financial benefits in taking advantage of a tried and tested, standardized package. Customization costs money, takes longer to develop, and runs a greater risk of being unable to integrate with existing company systems such that by the time a package has been customized any benefits have been lost.

A great ERP specialist will use their knowledge of fashion and apparel to adapt and enhance an existing ERP package and pre-configure it to specific business models, processes, and tasks. Functionality such as being able to consolidate inventory in pre-packs with unpack/repack capabilities and to be able to automatically adjust customer specific prices will ensure flexibility and scalability to drive future growth and expansion.

Move to cloud-based solutions 

Cloud-based ERP systems have many advantages and few drawbacks. Cloud computing systems are cost-efficient and have been found to enhance worker morale and by extension, productivity. To gain the benefits of cloud-based systems, the ERP solution must be scalable to fit business needs and one of the following options should be adopted:

  • Private cloud – Best for use in conjunction with legacy systems that do not contain built-in cloud capabilities.
  • Hybrid solutions – Using only those elements of the cloud systems that are essential to their business needs.
  • Public cloud – Systems based entirely in the cloud. Whilst this solution might be the most costly in terms of time and money, there are long-term benefits to be gained.

Why ERP is critical in the fashion industry

Fashion retailers are involved in one of the most logistically complex industries. Clothing retail has much shorter product lifecycles in comparison to other sectors, and the pace of change in demand is significantly higher. Each season a whole new collection is produced and in recent years this has moved to quarterly refreshes and fast fashion lines. We are challenged by keeping track of merchandise (that ranges in style, size, fabric, and color-way), whilst anticipating demand, forecasting sales, reducing delivery times and minimizing unplanned markdowns.

The need to assess manufacturing costs, sorting and extracting styles to be produced makes managing end-to-end processes incredibly complex. Being able to handle all this information in one system means more efficient and accurate business decisions can be made thanks to ERP software.

Key benefits of an efficient and effective ERP system

ERP integrates all departments and functions into a single computer system able to serve each department’s needs. The following summary highlights the key benefits but relies on selecting and implementing the best ERP solution for your company.


All aspects of the business process from concept to consumer can be integrated. ERP aims to integrate all departments from design, manufacturing, financial, customer services, sales, and distribution. Productivity and work-flow are significantly improved.

Cost savings 

One of the key benefits of an advanced ERP system is the ability to focus on cost control. By inputting data in one place, with ‘one truth’ and managing the inventory from concept to solution, the cost savings can be significant. By centralizing all key product data, savings can be made on sourcing similar materials and forecasting more accurately. For example, where fabric is common to a number of different garments across different divisions, ERP helps to calculate the total fabric required and so better deals can be achieved. In addition, ERP helps to improve communication and flow within the company. For example, any changes to the fabric such as composition or washing instructions can be centralized which makes communication to relevant teams seamless and foolproof.

One truth 

Effective ERP systems enable managers to see comprehensive statistics on costing and revenue allowing adjustments to be made to production lines, sourcing of raw materials, and other contributing factors. Ultimately there is no chance of data manipulation, with the use of ERP, user input is monitored and each input logged so that it is easy to see which person is responsible at every stage. Having the right information in the right place at the right time anywhere in the world undoubtedly improves productivity.

Report production 

Reports can be compiled in a short time with pre-sets entered and run on a daily basis. Summaries for use in management meetings provide total operational overviews, in stark contrast to reports assembled by Excel, ERP allows concurrent dates to be entered, meaning time will be saved and management can have an accurate picture of what is happening across the business from production processes to planned dates for item availability in the warehouse. ERP means that optimum inventory can be maintained. Put simply, time and money investment can be allocated to areas that need attention quickly, efficiently, and accurately.

Reduction of duplicate work 

It is hard to imagine how much data is duplicated from concept to customer and how many times information is miscommunicated. Automating operational tasks and providing easy access to information means significant time savings can be achieved, and the risk of human error is greatly reduced.

Flexible and scalable solutions 

The ability to take full advantage of the power of an enhanced ERP solution is to choose a partner who is able to be as flexible and dynamic as your organization. In embarking on the implementation you must believe in the growth capabilities that your company can achieve. Therefore choosing a partner that has scalable solutions that are future proof is of utmost importance.

Customer centricity- Food for thought

As consumers integrate the latest technologies into their everyday lives they demand more from retailers. The modern consumer expects every interaction across every channel to be seamless and simple. Further, they expect to be able to shop at all times of the day (and night) and to have fast, flexible delivery options available to them at all times too.

Gaining competitive advantage 

To ensure that customer experience across all channels delights and excites means smarter systems and better processes are called for. As well as a new perspective on business process management, the key to success is to build a supply chain that services the full spectrum of customer needs using ERP software. Consumers enter a store or go online expecting to be able to locate the item they want when they want it.

Stock availability is critical to match each individual customer with the particular item they want. By utilizing the power of an enhanced ERP system, retailers are able to have the inventory levels of their worldwide stock at their fingertips. It makes the difference between losing a sale and gaining a customer.

The fit of the garment 

Brick-and-mortar retailers are beginning to see the effect of poorly fitting clothes and footwear in high return rates via online shopping. Customer reviews hold vital information to assist other purchasers to understand how the garment will fit as well as allow buying and merchandising teams to make simple amendments for the future. Simply put, yet more valuable and actionable data that can be trawled using ERP software. However, what if the description of that garment is able to contain far more fit information about the garment than we see currently? All the size data is held in the specification of the garment and therefore in the ERP system as well. In the future, we will see a marrying up of the size information and the communication to the consumer. The only way to enable this seamlessly is via an ERP system designed for the clothing industry.

Understand your customer’s size and shape

To improve the fit of clothing retailers need to go back to the start of the process and become truly customer-centric. However, it is hard to know what the shape of your customer is. This is where research needs to be combined with big data to ensure both attitudinal, factual, and behavioral indications are taken into account. This is perhaps where the future of retailer/ERP integration is leading us.

Marrying data analytics and qualitative research

In utilizing an effective ERP system, companies are able to manage and find actionable insights behind customer behavior to predict future activity. However, by incorporating smaller data sets to understand the psychology of the audience such as interviews, focus groups, and other research methods, businesses can start to access the ‘why’ behind market trends. Techniques such as immersion sessions work well to bring consumer sentiment to the front of the minds of decision-makers. ERP software then really is at the foreground of a customer-centric approach.

To find out more about how an ERP solution can transform your business, contact allonline365 on  info@allonline365.com or +27 (21) 205 3650.


Resource Credit | K3 Technologies 

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