September 14, 2018 Opinion piece
Gary Lynch, CEO at GS1 UK, looks at our recent research into the apparel sector, which asks some challenging questions for retailers and brands about decreasing margins
We recently published a new white paper, ‘Where did your profitability go? Managing the apparel omnichannel cost-to-serve’, to great interest from the sector. We joined forces with LCP Consulting and Cranfield School of Management and together we held a compelling launch event – with over 30 leading figures from the apparel sector attending and participating in what turned out to be a lively debate.
The paper digs deep beneath the surface of the omnichannel supply chain, and forces retailers and brands to ask themselves some key questions that will really help them understand where and how profit is made – or lost:
- What happens if I can’t identify the main drivers of cost across my business?
- How do I balance my customer proposition versus the need to maintain margin?
Understanding the customer is of course critical to commercial success. But understanding how much it costs to serve these customers, with every product and every channel, is equally important. It’s the companies who do this really well who will truly reap the benefits of the growing online market – and who will achieve sustainable growth. But it’s incredible to learn just how few companies can really identify their cost-to-serve – and if you can’t understand it, well, it’s a bit like flying in the dark.
Two expert practitioners joined our panel at the launch event; Simon Ratcliffe, Sourcing & Supply Chain Director at Fat Face Limited (above left) and Terry Murphy, Director, National Distribution Centre Operations at John Lewis (above right). Together they added even more valuable insight to the debate.