There are a number of ways to sense demand, and each new insight can speed reaction time and boost profits. The easiest way for companies to start sensing demand is to use the most granular historical data available. When sensing demand, it’s important to brainstorm all the possible, useful data sources that stand to improve the forecast. Demand sensing can and should also integrate demand-correlated variables to create a robust forecast capable of responding to a wide range of future events, from the known to the unknowable. These may include stock market fluctuations, competitors’ promotions, viral social media trends, new-product introductions, weather and other external factors. Companies that invest today in the tools, processes and skills to boost their demand sensing capabilities can truly be ready for whatever tomorrow might bring. Dr Anil Chinnabhandar, Senior VP- Retail Planning & Supply Chain, Landmark Group (India) – Max Retail elaborates Upamanyu Borah, about demand sensing and shaping approaches to improve service levels as well as grow revenue, only possible through seamless collaboration across the supply chain to match upstream and downstream requirements—a holistic view of all value stream channels.
With a stellar market share and strong brand presence, Max Fashion have been building upon aggressive growth plans and continually innovating towards market needs. How unique is the brand’s procurement, supply chain and channel operations supporting deeper market reach?
While off-line supply chain activities were curtailed, supply chain for online had to be scaled up dramatically. Large chunk of our customer base continued to relay on us for purchases with safety at their doors, which forced us to scale up infra, train staff and engage with delivery partners to service the online demand including partnering with marketplaces to increase the reach.
The pandemic has taught the larger community to be grounded and realistic in its approaches. We are also trying to remain closely associated with our supply partners—lending a helping hand to factory/warehouse staff by distributing ration kits during lockdowns and jointly working to ease cash-flow crunch and most importantly, honouring the buy commitments even amid market uncertainty when risks still persist.
The pandemic will go down in history as one of the most challenging for the fashion industry on record, marked by declining sales, shifting customer behaviour and disrupted supply chains. How are you able to predict demand and build up inventory in such an environment?
Predicting demand has become history now. Retailers have to improve their ‘demand-sensing’ capabilities using a wide variety of touch points—be it traditional marketing, digital engagements, social commerce, and or analytics-driven smart sensing of demands across markets. India being such an extensive and culturally diversified geography, agility and capabilities to quickly sense the demand and cater to it has become the key proposition for fashion companies. Amid the current scenarios, inventory building has become a myth, as the consumer behaviour has shifted away from fashion and trendy looks to more comfort and easy-to-wear merchandise. Speed-to-market has become the mantra.
How do you contribute to creating the vision and strategy for the textile retailer’s supply chain operations in India, establishing the footprint, organisation structure and team to deliver the same?
India’s fashion retail segment has become truly omnichannel. Today, consumers may want to access the web from anywhere and order any merchandise online through digital or social media platforms, or even from a brick and mortar outlet. The pandemic has taught tough lessons on accumulating inventory and forced supply chains to become leaner, meaner and much more productive. True collaboration amongst supply partners—suppliers, warehousing and logistics service providers, vendors, distributors, delivery partners—has to be a main part of the vision for companies involved in retail supply chain operations in India. Unless we fight the battle together in unison to achieve speed and agility, it’s not going to be profitable and sustainable.
Transparency through the value chain, along with reasonable gain sharing amongst the value chain partners, supported by comprehensive omnichannel retail capabilities has become the sure shot for success.
There is much uncertainty related to the rapid influx of technologies poised to disrupt manufacturing, and changing trade policies that will impact supply chain performance. Acting with agility is the new currency of business. Where does Max Fashion stand here?
Our end-to-end operations have become truly agile and highly responsive to the changing needs of the consumers. Max was already treading the omnichannel retail path for a few years now. The pandemic has literally given turbo charge to the speed of our agile journey. We are well-placed to handle the new normal.
Now that we are living with the virus and the global economic reality it has created, do you see any remaining hesitation on the part of luxury brands to embrace new digital innovations in the Indian ecosystem?
What we are clearly seeing from consumer behaviour and hearing from the luxury brands is that Indian consumers are hesitating on spending on certain luxury brands within fashion, apparel and accessories, etc. However the home furnishings, interior decor and other household items are getting upgraded or replaced with more vanity and comfort. Overseas consumers have embraced luxury brands with more vigour, which may be witnessed in India too, after the pandemic is gone.
Click-and-collect services and in-store appointments are no doubt more important since the pandemic, even if we’d already been hearing a lot about this omnichannel approach in recent years. Are there any other ways you plan to blend online and offline services for the next phase?
The pandemic has taught us a variety of innovative ways to engage with retail consumers by means of digital and social commerce. Interestingly, Max had started Click & Collect service a few years ago for consumers and which has been scaled up in the recent months. There are numerous such initiatives in line with leading marketplaces and retailers to build on omnichannel capabilities to deliver services to consumers across the country, whether at the retail outlets or customers doorsteps.
Some industry commentators say that this is an opportunity to reinvent retail. How do you see the industry evolving in the coming years?
Reinventing retail was already in progress well before the pandemic hit us last year. Max had started omnichannel retail journey few years ago. The pandemic has instead forced all of us to reengineer our entire value chain, remove the fat and become more agile in every part of the value chain. We had seen enterprise agility and consumer centricity mastered by the automobile industry many years ago. Ever since, just-in-time (JIT) philosophy became an integral part of the automotive ecosystem. Fashion retail too has to and surely will embrace similar agility and consumer centricity in the near future.
What have you learned and taken away thus far from this crisis? Where you tend to focus as you move forward?
The pandemic has highlighted the need to fundamentally rethink people, process, profitability and products. Consumer behaviour may change dramatically with little warning and your system need to remain prepared to respond quickly and adequately. Importance in people and partners beyond the scope of work also must be prioritised, considering that the second wave has come as a rude shock to so many families.
It’s very heartening to see that our business leaders have been generously sponsoring wellness and welfare measures including funding/paying for vaccinations and treatments of their staff. The focus has to be in a direction that it certainly encourages the supply chain community to think beyond profits, work towards achieving healthy and safe life and living for all.
