After spending twenty years in FMCG, entering the fashion sector seemed to walk in a completely new world. In the FMCG sector, the council rooms were dominated by discussions around Efficiency, efficiency, efficiency—How to reduce costs efficiently; efficiently simplify production; optimize advertising efficiently; —Basically, how to squeeze every last drop of cost from the system. The innovation of the product rarely was at the center of the scene, as it was still produced in series on a daily basis. The only time the product discussion emerged was when a relaunch was planned with a formulation change or a rare complaint of consumers.
But in fashion? Suddenly, you are in a meeting room where *Product, Product, Product* It is the center of the universe and we think: “Wow, in reality we will talk about something different from efficient Optimization of the warehouse! “Given the frenetic nature of fashion, it is not surprising that the product is at the center of the scene, after all, it reinvents itself constantly with every season. Add to this the mountain of Skus and the constant scramble to face the invented inventory last season and you have a real act of juggling on your hands.
To remain relevant, both FMCG and fashion brands must be subjected to a fundamental change in the strategy.
The FMCG mega brands were built on the back of the domain of their parent company in distribution and advertising, taking advantage of a huge staircase to crush the competition. Many smaller FMCG launches over the years have simply failed to break through these two advantages.E-commerce and social media have leveled the playing field, stripping the traditional strongholds of distribution and mass advertising. And this is only the beginning: the Indian conglomerates with deep pockets are moving in FMCG. What is their game plan? Will they launch “me too” products or will they invest in R&D to launch offers that change the game? Time will say it.
For the FMCG giants, now the conversations of the Council room must change. It is no longer just efficiency: these are the superiority of the product, innovation of the niche product and exploit technology to simplify the supply chains and connect with consumers to a deeper level. The real competitive advantage will come from agility and excellence, not only from efficiency.
To keep up, they will have to master e-commerce and social media, while they launch targeted products to draw on the micro-signs carved by the D2C brands. And with the Indian conglomerates that bring heat, product The discussions soon dominate the halls of the FMCG Board of Directors. The message is clear: if the mega brands want to remain mega, the excellence of the product is not negotiable.
Let’s see how the conversation will launch in the halls of the council of fashion companies. The fashion brands in the first place have never had the advantage of the distribution power or scale to be advertised. So all attention was focused on the product: it was the only weapon in Arsenal to lead sales.
The emergence of Ecom and Social Media has freed the fashion brands, allowing them to reach new markets. With the scope of the expanding market, while establishing the connection of consumers through social media, some major brands have expired in recent years. So why does the conversation have to turn the fashion rooms upside down?
It is the quiet entry of a multitude of D2C brands that broke out on the scene, satisfying the niche needs of consumers with punctual precision. The secret behind these new age brands? Their power lies in exploiting technology to drastically cut the go-to-market times, overcoming the competition and redefining the game.
The advantage is an increase in the inventory curves and the reduction of the unsold inventory, which is the main scourge of the sector.
Technology allows these brands to keep track of consumers trends efficiently in real time, adapt their goods accordingly and communicate with customers in a personalized way, increasing even more the charm of their products.
It is obvious that the conversation in the halls of the council of fashion companies will launch; While product It will still be the fulcrum, the discussions also pass to the digital transformation necessary to compete in the new world.
The ability to respond faster to market demands will define success. Digital transformation is no longer optional: it is a requirement. How can we get shorter market times? How to reimhaginate the design of the product based on consumer purchase trends? How to communicate? How to manage production for high inventory shifts? In short, it is a question of transforming the chain of fashion value to become agile and responding efficiently to the needs of consumers, exploiting digital tools on a scale while remaining agile.
The conversation turn will be immensely benefited both to be the FMCG brands and the fashion brands. For FMCG brands he will force them to build competitive advantages beyond distribution and advertising. The superiority of the product, the targeted development of the product, the transformation of the business model that exploit the technology, the optimization of the supply chain, the maximization of the potential in the new distribution channels such as E Com and Q Com and the upper consumption connection, will be the distinctive sign of the discussions on the Council Hall.
For fashion brands, the advantage will be even larger with Ecom and social media that open the possibility of reaching consumers in depth and wide. In fact, there are now unlimited opportunities to create truly mega brands. New technologies will allow fashion companies to better manage their inventory with short -lived cycles of shorter products, with consequent minimization of the goods sold with high discounts.
For FMCG, it is about remaining “mega” in a world where the weight of the distribution no longer cuts it! For fashion, it is the possibility of finally passing from the appeal focused on the catwalk to the construction of brands of billions of dollars!
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