How Fashion Brands Can Count on Demand Sensing in the TikTok Era
Apparel organizations that fail to plan might as well plan for failure, especially in the age of TikTok and Instagram.
The power of social media has never been more evident for fashion brands who, because of influencers, sell highly sought-after items faster than they can manufacture them, inadvertently sending shoppers elsewhere.
For example, after going viral on TikTok in 2021Gap’s dark brown logo hoodie (#gaphoodie), Aeropostale’s crop tops (#tinytops) and lululemon’s mid-rise skort (#lululemon) quickly became sold out when enthusiasts Gen Z-Y2K fashion designers quickly snapped up these coveted items.
In the age of #fashionTikTok and influencer-driven viral shopping, apparel brands must have the ability to correctly forecast and agility adjust their supply chains in the face of sharp market swings. make it through demand detectionmethodology and technology to improve near-term forecasting using detailed near-term demand data, will help them meet both service goals and customer expectations, or deal with the anger of Generation Z to buy similar items elsewhere.
Below are reasons why demand sensing is critical to success as styles hit the catwalk of 2022 — or rather, the “for you” TikTok page.
Why Conventional Supply Chains Can’t Keep Up
Consider how typical organizations with a traditional supply chain react to spikes in demand: an influencer posts a video wearing a skirt on TikTok, creating near-instantaneous excitement and the “need” of young girls and teens for that product.
- The brand’s demand forecast looks back on the sales history.
- When sales reports show the clothes have sold out unexpectedly, the company goes into firefighting mode.
- After adjusting its forecast to reflect new demand, the brand discovers that it lacks the materials and/or production capacity to create more of this coveted skirt.
- The company orders new materials and pays for expensive expedited shipping, but the customer doesn’t wait and buys from a competing apparel brand.
- The brand ends up with a surplus and a monetary loss when the virality of an article dies out.
In this situation, which often occurs in today’s social media landscape, apparel brands simply cannot adequately anticipate demand. As a result, they cannot successfully plan demand – that is, forecast demand by analyzing historical data points to anticipate what is likely to happen in the future – and sales opportunities are lost.
However, to better adapt to highly fluctuating consumer behavior, respond to spontaneous product demand and identify new opportunities, companies would be wise to modernize their supply chain, especially with solutions that enable agile demand sensing in addition to planning strategies.
A future-oriented digital solution that adapts to market fluctuations
Savvy fashion brands often adopt a stance of haste and wait. They reserve materials and factory capacity to produce their garments, then wait until the last minute to figure out what to do based on the latest demand sensing. They ask, “What should I do? Where is the demand? and “Where should the products go?”
For example, suppose a brand’s demand forecast predicts that it will need 500,000 units of a particular style and color of t-shirt in the United States. During production, however, its supply chain monitoring solution shows that demand is growing more in the UK and Germany – and not so much in the US.
In such a scenario, the company might wait until the last minute to determine distribution – and might also find it more profitable to ship directly to the consumer through their e-commerce channel.
Traditional retailers can take a cue from their fast fashion counterparts. Instead of churning out many units of a single thing based primarily on past sales, fast fashion leaders often deliberately run limited production runs so that once an item is sold out, it is gone, allowing them to sell most items at full price. After detecting what is hot, they can then create new designs (sometimes very similar) and put them back in store in one week to two weeks against up to six months. Demand sensing allows them to stay more nimble and in tune with what consumers are looking for.
A clothing brand should require a plan to define its initial production parameters. Using this read-and-react ability of demand sensing helps refine the plan.
Proactive detection capability is crucial for success
Ultimately, especially with today’s Gen-Z shoppers who love TikTok and Instagram, just looking at historical data doesn’t always work in the fashion industry. With the rise and fall of viral trends, brands must not only plan for demand, but also stay nimble with demand sensing strategies.
A modern, digital supply chain demand sensing solution enables apparel companies to quickly pivot production and distribution to overcome business challenges and position themselves for maximum sale.
Without a doubt, influencers have a big influence on the buying decisions of today’s fashion-conscious consumers. Therefore, to meet demand, the most successful apparel brands rely on their updated digital supply chain solution, as it can be the deciding factor between failure and success in detecting Requirement.
To get the same, follow and share of Gen Z, consider adding viral protection strategies to your supply chain mix this year.
Mark Burstein is the Executive Vice Presidentindustry director at Logilitya provider of AI-powered supply chain planning solutions.