The Future of Retail Operations

Retailing consists of all the activities associated with the selling of goods to the final consumer. In this article, we review the research on retail operations published in Manufacturing & Service Operations Research (M&SOM) since 1999. We then discuss the current retail landscape and the new research directions it offers, in which M&SOM can play a prominent role

Replenishment support decision model for a try­-before-you-­buy retail fashion e­commerce

A try before you buy business model is a type of sales strategy in which customers are allowed to test a product before making a purchase. As the try before you buy online business model is a topic on which there is limited public scholarly research, the purpose of this research is to provide an initial approach to the subject by presenting a tool to support the replenishment strategy of Curve Catch, a fashion e­commerce retailer. A simulation engine characterized by two main components has been built: replenishment and a demand generator. Model development is built on artificially generated data based on real data of Curve Catch. Based on the literature inherent to inventory management and through the use of simulation ­optimization, the model provides managerial guidance on how to manage r,Q policy in a system where most goods shipped to customers are returned. The tool highlights the need to optimize the use of reorder point and economic order quantity to achieve better business performance. This is because conventional formulas, if not adjusted to the specific setting, perform sub optimally. The model also provides insights into the levels of lost sales due to out stocking and the quality of service provided to customers. Studying the relationships among these three KPIs provides insight into what trade­offs are relevant in planning a continuous review replenishment strategy.Um modelo de negócio de "experimentar antes de comprar" é um tipo de estratégia de vendas onde os clientes têm a possibilidade de testar um produto antes de fazer a sua compra. Uma vez que este modelo de negócio online é um tópico sobre o qual não existe nenhuma pesquisa académica pública, o objetivo desta estudo é fornecer uma abordagem inicial ao assunto, fornecendo uma ferramenta para apoiar a estratégia de reposição da Curve Catch, um e ­ commerce de moda. Foi construído um motor de simulação caracterizado por dois componentes principais: reposição e gerador de procura. O desenvolvimento do modelo baseia ­se em dados gerados artificialmente com base em dados reais da Curve Catch. Com base na literatura inerente à gestão de stocks e através do uso de simulação­otimização, o modelo fornece orientação empresarial sobre como gerir a política r, Q em um sistema onde a maioria dos produtos enviados para os clientes é devolvido. A ferramenta destaca a necessidade de otimizar o uso do ponto de reordenação (reorder point) e da quantidade de encomenda económica (economic order quantity), para alcançar um melhor desempenho do negócio. Isso ocorre dado que as fórmulas convencionais, se não forem ajustadas para o ambiente específico, serão desempenhadas de maneira subaproveitada. Para além disso, o modelo fornece insights sobre os níveis de vendas perdidas devido ao esgotamento e a qualidade do aten dimento ao cliente. O estudo das relações entre essas três métricas­chave fornece insights sobre quais trade­offs são relevantes no planeamento de uma estratégia de reposição de revisão contínua.

オムニチャネル小売業におけるファッション商品の品切れに対する対応のモデル化分析

筑波大学 (University of Tsukuba)201

Zara and Benetton: Comparison of two business models

The project analizes and compares two very important and diferent business models in fast fashion industry: Zara y Benetton models. Their models are so diferent but have been a great success, due to their capacity to respond quickly to demand of the market, then due to their flexibility. In this regard, the project also demonstrates how information sharing have a big role to the success of a company. It improves the efficiency of a company and helps to achieve the customer satisfaction . To achieve a good sharing information, it' s important a good and strenght relationship between manufacturer and retailer

The US fashion industry: A supply chain review

Cataloged from PDF version of article.The fashion industry has short product life cycles, tremendous product variety, volatile and unpredictable demand, and long and inflexible supply processes. These characteristics, a complex supply chain and wide availability of data make the industry a suitable avenue for efficient supply chain management practices. The industry has also been in a transition over the last 20 years: significant consolidation in retail, majority of apparel manufacturing operations moving overseas and, more recently, increasing use of electronic commerce in retail and wholesale trade. This paper aims to review the current state of operations and recent trends across the fashion supply chain in the US. We use industry-wide data, articles from business journals, industry reviews and extensive interviews with an apparel manufacturer in California, and a major US department store chain to describe the current operational practices and how the industry is restructuring itself during the transition, focusing at the apparel manufacture and retail segments of the supply chain. 2008 Elsevier B.V. All rights reserved

Markdowns in Seasonal Conspicuous Goods

In common parlance, luxury and markdowns are, in many respects, contradictory concepts. Markdowns decrease product exclusivity and hence consumers’ willingness to pay (i.e., snob effect) since most consumers purchasing luxury desire uniqueness. Markdowns also encourage strategic (forward-looking) consumers to wait for lower prices (i.e., strategic effect). Yet, luxury retailers frequently adopt markdowns in practice to stimulate the demand for their seasonal products (i.e., sales effect). To study the impact of these three countervailing effects on a luxury retailer’s markdown policy and rationing strategy, this paper develops a game-theoretic model with strategic and exclusivity-seeking consumers who have heterogeneous (high and low) valuations. We characterize a luxury retailer’s equilibrium markdown and rationing strategies, and find that the retailer induces a buying frenzy (i.e., selling deliberately less than the demand) to increase consumers’ willingness to pay when they are sufficiently exclusivity-seeking. We show that the retailer’s markdown policy depends on consumers’ desire for exclusivity when the proportion of consumers with high valuation is not too high or too low. Interestingly, we find that, in such cases, consumers’ higher desire for exclusivity does not motivate the retailer to increase exclusivity and to adopt uniform pricing. To the contrary, it motivates the retailer to decrease the exclusivity and to adopt markdowns. By doing so, we identify exclusivity-seeking consumer behavior as another rationale behind markdown pricing. Lastly, we find that, when selling to exclusivity-seeking consumers, the negative impact of strategic consumer behavior is lower; however, ignoring it can be more costly

Supply Chain Risk Assessment for Perishable Products Applying System Dynamics Methodology - A Case of Fast Fashion Apparel Industry

With the fast progress of science and technology and with the continuously growing customer expectations, share of merchandise exhibiting characteristics of perishability is on the rise. Perishable products, through their own nature, are subject to decay, deterioration or obsolescence. As a result, their usefulness, value or functionality is gradually reduced or even lost in a short window of time and cannot be regained if it is not used or sold within a specific time window. When producing perishable products, all stages of the supply chain are exposed to much higher uncertainty than in the case of durable products, which directly means higher risk. The phases of inventory planning, lead time control, and demand forecasting for perishable products play a critical role in the overall effectiveness of the supply chain. For this reason, the system dynamics methodology, a simulation and modeling technique developed specifically to address the long term and dynamic management issues, is adopted in this study. The focus of the proposed model is on the interaction between physical processes, information flows and managerial policies of a three-level supply chain for perishable products, in general, and fast fashion apparel supply chain, in particular, so as to create the dynamics of the variables of interest. The values of supply chain key factors such as, for example, inventory, backlogs, stock-outs, forecast error, cost, and profit for each time period are some of the outputs of the proposed model. Moreover, the Conditional Value at Risk (CVaR) measure is applied to quantify and analyze the risks associated with the supply chain for this type of product and also to determine the expected value of the losses and their corresponding probabilities. With the focus on three prominent categories of risks including risks of delays, forecast, and inventory, multiple business situations for effective strategic planning and decision making are generated and analyzed