In recent years, due to the expansion of globalization, rapid technological development, changes in the international political environment, and the cumulative impact of trade wars, regional conflicts, and public health events, market trends have become more unpredictable than ever, and many companies are facing huge operational challenges. Our society and business environment are now in the VUCA era, where volatility surges, uncertainty proliferates, complexity amplifies, and ambiguity intensifies. How does a company achieve its business goals? How can it develop a scientific and executable company-level operational plan?
In the retail, fashion, and luxury industries, this uncertainty has a more profound impact on the demand and supply sides of businesses. The fluctuations in consumers’ confidence in the market directly affect the purchasing power and preferences on the demand side. Meanwhile, on the supply side, brand owners and retailers face significant challenges in managing their inventories and costs.
1. Intensified Competition in the Saturated Market
- The deceleration of the overall economy has led to a downshift in consumer spending, exacerbated by an oversupply of goods, which in turn has decelerated the growth of market demand. Increasing customer retention rates and maximizing the customer lifetime value (CLV) have become key strategic imperatives for brands. The market is evolving from a supply-driven growth market to a demand-driven saturated market.
2. Diversification in Consumer Purchase Behavior
- Demand Differentiation: The dynamic interplay of impulsive buying tendencies and the mercurial nature of consumer preferences has amplified the intricacies of market demand forecasting. Retailers must exhibit agility in responding to the evolving consumer mindset, with a keen focus on the nuanced product demands across segmented consumer demographics. It is imperative for brands to not only consistently reinforce their brand narrative, but also align with the personalized expression sought by Gen Z consumers.
- Omnichannel Shopping Experience Variability: In an era where brand-consumer touchpoints are multiplying, the consumer's purchase journey has moved beyond traditional channels. Brands must orchestrate a fully integrated and frictionless shopping experience that resonates with the discerning consumers who value the purchasing process. Omnichannel harmonization is pivotal for brands aiming to deliver a cohesive and immersive retail journey.
3. Supply Chain Model Complexity
- The globalization of supply chains and the shift to omnichannel require a variety of supply chain models as the core competency of fashion and apparel companies.
- Intensified order fluctuations across various nodes of the supply chain pose significant challenges to fashion suppliers. It is critical for companies to achieve real-time visibility and implement an end-to-end transparent supply chain management system. This enables the swift detection and mitigation of supply chain disruptions, ensuring the supply matches the demand seamlessly.
4. Insufficient Company-Level Operational Alignment
- The gap between strategic planning objectives and operational execution realities highlights the necessity for companies to augment their market intelligence gathering and analysis capabilities. This enhancement empowers organizations to set relevant planning benchmarks that align with market dynamics.
- Amidst the accelerated pace of market transformation, companies are challenged to cultivate agile organizational structures. This involves formalizing communication protocols, defining precise roles and responsibilities, and fostering an environment that supports quick decision-making. Such agility is crucial for navigating the volatile retail landscape effectively.
Simply diagnosing and optimizing certain operational modules is no longer sufficient to effectively respond to the rapid changes in today’s market. To enhance operational resilience, companies urgently need a more scientific and effective operating model. Connected planning can effectively synergize strategic objectives, financial planning, sales planning, and operational planning for execution. It also aligns with the perspective of business executives to maximize profitability and mitigate the risks associated with inventory and capital occupation. Companies should leverage connected planning in their operational management, with merchandise as the core, coordinating and executing the three major planning systems, while always linking KPI with profitability.
BearingPoint can provide a holistic connected planning transformation service offerings across three dimensions and six functions:
- High-level Assessment and Benchmarking
- Detailed Operating Model Design
- Organization and Talent Transformation
- IT Assessment and Selection
- System Design and Implementation
- Operations Coaching and Transformation Support
A leading luxury group, amidst its global business expansion, encountered challenges stemming from fragmented supply chain planning and scattered management practices. The surge in sales velocity and the increase of sales channels have amplified its supply chain intricacies. The brand is keen on bolstering the synergy among supply chain demand forecasting, category planning, inventory replenishment, and stock management, to reduce manual interventions and improve the efficiency and precision of planning processes.
BearingPoint carried out a comprehensive status quo and industry benchmark analysis for the group, assisting in the development of an omnichannel, end-to-end integrated business strategy. This encompassed merchandise planning, category assortment structuring, demand analytics, allocation and distribution strategies, sales replenishment, markdown optimization, and liquidation processes. Furthermore, BearingPoint delivered robust support for the deployment of advanced decision-making systems and change management initiatives.
BearingPoint's engagement successfully streamlined the client's operational workflows, notably enhancing cross-functional collaboration and automating supply chain processes through digital empowerment. This strategic intervention resulted in a significant decrease in inventory levels, aligning with the objectives of maximizing sales revenue, profit margins, and ROI.
BearingPoint's extensive experience in the retail, fashion, and luxury industries has cultivated a rich repository of industry-specific and operational expertise. Our firm has been instrumental in guiding luxury brands through operational transformation, optimizing their business performances and growth trajectories.
Our solution offerings in Consumer Goods and Retail:
BearingPoint offers specialized services tailored for consumer goods and retail industry, drawing from extensive industry experience and operational insights. The firm is engaging with client-centric solution that emphasize value delivery, to achieve measurable and sustainable success.
BearingPoint offers the following services for Consumer Goods and Retail industry clients:
Customer & Product & Channel
- Unified Commerce Transformation
- Omnichannel Digitalization Transformation
- Customer Journey Design
- Omni-Channel Operation
- Omni-Channel Inventory
- Customer Experience Optimization
- Department Store Operation and Training
- Product Life Cycle Management
- Product Operation Management
Supply Chain Management
- Digital Supply Chain Strategy Planning (SC Operating Strategic ISC Operating Innovation | Digital Planning)
- Connected Biz Planning Mgmt (Biz Plan/Merchandise
- Plan/Merchandise Operating)
- Integrated Supply Chain Transformation
- Logistic Network Optimization
- Supplier Risk Management
- Excellent Procurement Management
- Data Driven Supply Control Tower
- Al for Supply Chain Biz
Finance & Risk Management
- Digital Financial Transformation
- FSSC Planning/Design/Implementation
- Finance Process Optimization and Risk Controlling
- Financial Planning and Analysis
- Reporting Analysis and Decision
Contact us for more service introductions.