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OM in the News: Forecasting for the Fashion Industry

September 13, 2013

fashionIn the fashion business, faux pas can be costly. In order to hem back the risk, writes The Wall Street Journal (Sept. 9, 2013), some retailers are increasingly turning to trend forecasting and analytics (the topic of Chapter 4). For an average annual fee of $7,000-$15,000, customers get access to forecasts of fashion trends and data offering ideas for colors, fabrics and cuts. Fashion companies use the data to plan their latest collection or show.

“Fashion forecasters have always been used but they’re more accessible now because of the technology,” says a Marks & Spencer exec. “They are important, not always to lead but to re-evaluate and help confirm you’re on the right track.”

Forecasters claim to save their clients travel expenses, the cost of freelancers paid to photograph trendy people, and time spent trawling the vast cache of fashion data on the Internet. “We can’t get rid of risk but we can mitigate risk,” says the CEO of the forecasting firm Stylesight.

“Forecasters take the information and package it in a way that speaks the language of the retailers and manufacturers. Then it’s our job to decide what makes sense for our business; we have to filter it again,” says Kohl’s VP.  “Fashion moves so quickly. Companies like Stylesight, which are updated every day, are really useful in order to make sure we have the right information. They offer us an industry eye on all of the information, broken down by print, color and classification like sweaters of woven tops.”

Retailers say the information forecasters provide has become an important part of how they tap consumers, who spend less, shop online more and demand the latest outfits in increasingly tight time frames.

Discussion questions:

1. Why do large retailers like Macy’s and Kohl’s need forecasts of fashion demands?

2. What forecasting techniques discussed in Chapter 4 can be applied to this problem?

2 Comments leave one →
  1. September 24, 2013 9:08 pm

    So, I wonder, how do they convert fashion descriptors into quantitative data for forecasting? Do they forecast measures like skirt length or sleeve length? How do you forecast a color?

  2. September 25, 2013 4:51 pm

    Excellent point, Professor Harrod. I believe the forecast helps determine several qualitative measures, such as colors, lengths, etc. But we could ask what benefit the data are to one firm if every company receives the same forecast report?

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