IT Chic with Fashion Designers
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Spending millions upon millions of dollars, big-name fashion houses are upgrading their antiquated IT-powered logistic systems to help assure a steady flow of revenue from consumers as sales of luxury goods become threatened by the worldwide economic downturn. |
An article published in The Wall Street Journal reports that the likes of Valentino, Gucci and Burberry for years relied on outdated technology systems, causing them to regularly miss delivery deadlines to key customers such as Bergdorf Goodman in New York and Harvey Nichols in London. "The industry got away with that behavior when its sales were booming," the article says. "But now, with consumer demand withering, store owners have less time to sell items at full price and have become more impatient with delays."
The rise of technology is part of a tug of war crimping the clout of once omnipotent designers in the fashion world. In the past, creative directors, not consumers, dictated which items in a collection were the most important—and even which stores could sell them. But now, as high-fashion sales slow and pressure from mass-market retailers like Zara and H&M increases, luxury labels have little choice but to track and tweak their offerings based on consumer demand.
So, that means increased spending on IT, such as the investment Valentino Fashion Group made in an SAP enterprise resource planning systems to track store performance, manufacturing and shipping on a daily basis. As the paper reports, Valentino spent some 2.5 percent of the $805.6 million in sales of its Valentino and smaller brands last year on its new technology. Here's more from The Journal:
Burberry Group PLC has spent more than $100 million to overhaul the back end of its business over the past three years. It says a new IT system and better organization of its production saved it $40 million in costs last year. And Italian jeweler Bulgari SpA says recent revamping of its point-of-sale data collection helps it figure out faster how to restock jewelry cases as shoppers spend more cautiously.
