“British fashion retailers ASOS and Boohoo are now able to conceive, design, produce, and have clothing ready for shoppers on the sales floor quicker than Zara and H&M,” reports QuartzMedia.com (April 6, 2017). ASOS expects sales to grow 30-35% this year. Boohoo predicts sales growth of around 50% for the year.
H&M is aware it’s falling behind, announcing plans recently to invest in and rethink its supply chain. Most of its manufacturing takes place in Asia in order to keep prices down, but it’s considering moving more production closer to Europe, to countries such as Turkey, which would let it get items to stores more quickly. That proximity is key to the speed of its faster rivals. Even Japanese retailer Uniqlo, which emphasizes that it isn’t driven by trends, has acknowledged that it needs to speed up.
Classroom discussion questions:
- How are supply chains at the heart of this issue?
- Why is speed of new product development so important in this industry?