How to Survive and Thrive in Retail Today: Digitizing the Supply Chain

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COVID-19 has created significant market and supply chain disruptions due to unprecedented shifts in both supply and demand. With retailers and brands cutting inventory and limited product availability, it is more important than ever for retailers and brands to make fast, accurate product design, selection, and pricing decisions to lock in their share of scarce supply. The consumer has changed forever and with both supply and store traffic down, picking winning products that customers will love and pricing them correctly leaves little to no room for error.

The old way of working no longer works. Retailers and brands no longer have the luxury of a 20–30 week product development cycle before bringing products to market to see if consumers even like it. Consumers know what they want now, and if retailers can’t give it to them quickly, they won’t be around for much longer. The supply chain needs to be re-imagined, starting with digitalization.

According to our customer and partner, Li & Fung, digitalization is a key strategic point to help customers reinvent the whole retail environment to make it more exciting for customers to shop. As consumers continue to change, it’s more important than ever to connect and listen to them. The end-to-end product development process is being redefined and retooled to discover, create, make and sell products in a new way.

3D design and development software solutions have been around for a while, but COVID-19 has accelerated the use of this technology due to its ability to reduce sampling cycles and cost while increasing speed to market and reducing waste. In the old way, which is still considered today’s “normal”, you come up with an idea, and then work on creating that idea physically with CADs and samples. Then as designers review the samples to decide if it is what they imagined, whether they like it, or whether they want to change it, it goes back into the cycle. The traditional wholesale calendar is typically about 40 weeks, and production and logistics usually take about 10 weeks. Retailers and brands waste somewhere around 30 weeks from the start of the development cycle before even bringing it to market to test consumer feedback to decide if they’re even planning on placing the buy. Digitizing the supply chain cuts that time in half to about 20 weeks.


With 3D design technology software solutions like Optitex, Clo, and Browzwear, design teams can visualize the product much faster, and create true-to-life digital assets to show how it will look. This allows brands to make and review design iterations without investing in creating physical samples. This, combined with digital product testing, enables retailers and brands to make customer-informed product, pricing and selection decisions fast while improving sustainability. The process can cut months off the typical supply chain and product development cycle, as it allows data and information to flow seamlessly from end-to-end.

Product development investments can be estimated to cost anywhere between two-to-three percent of retail sales, which seems small until you consider the cost of choosing the wrong product, plus markdowns. Companies should consider reducing product sampling and leveraging digital product testing with consumer-driven data analytics which offers brands the ability to significantly increase margins. Li & Fung has seen cost reduction in sampling by about 68 percent.

The industry has made huge progress on AI and big data. 3D designs can be created merely hours after a designer has an idea, which can then be tested through the First Insight voice of customer analytics platform to collect consumer feedback. Within 48 hours the brand has data and insight on whether consumers like the product or not. In 72 hours, the brand can go from a raw idea to knowing if it’s a winning product that consumers want to buy and how much they would pay. This allows the brand to make smarter decisions. This entire process would have taken 20 weeks in the old analog way with no guarantee on product performance. Why work in the old way, when this new way is available?

Incorporating the digital supply chain of the future can impact the success of new products and overall margins. New products in the fashion industry fail at a relatively high rate. Many sources have quoted failure rates of 50-80 percent. And that’s really baked into the markdown budgets that are extremely bloated in the retail industry. 

Sustainability has been a buzzword in the retail industry for years but digitizing the product development process actually eliminates the need for physical samples and allows companies to gauge consumer appetite before manufacturing at scale, which significantly cuts down on physical waste and resource usage while successfully increasing speed time to market. Digitizing the supply chain can also completely eliminate the need for small sample runs for sell-in or in-store testing.

COVID-19 brought many challenges to the retail industry, but with every challenge comes opportunity. Leveraging technology to create a digital end-to-end product development process is a winning solution for retailers and brands to outsmart future environmental and market disruptions. Incorporating data and feedback through Voice-of-the-Customer Analytics can help retailers and brands make better informed decisions to innovate and not only survive but thrive.

But as we look towards the future, we’ve found it’s not just about digitizing the supply chain. There’s a whole new demand chain that needs technology tools to be effective and efficient as well. Learn more about the future of retail and join us for an exclusive webinar with Sean Coxall, CEO at 707 Limited, on April 14, 2021 to learn “How to Win with the New Demand Chain.”

pricing  retail  retail pricing  consumer preferences  design  Product Selection  supply chain  Voice of Customer Analytics  COVID-19  Consumer Purchase Behavior  Digital Supply Chain of the Future  Supply Chain of the Future  Digitalization