An expansive industry that includes many different product categories—from very basic options to luxury items—the apparel, footwear and accessories (AFA) market can be unpredictable. It’s also subject to design changes, shifts in consumer preferences, emerging style trends and changing retail strategies—all of which present both opportunities and challenges for the companies operating in the space.
“Running an apparel business isn’t easy. From managing processes such as sourcing of raw materials, manufacturing and quality control to controlling warehouses, distribution, accounting, and sales – there’s a number of operational complexities to deal with,” Business Matters points out. “[Enterprise resource planning] software can help apparel businesses to handle their operations efficiently by organizing different types of data onto a single, centralized platform.”
A Growing Industry
Despite the current global economic downturn, Statista says there’s been increased demand in some segments of the apparel market, specifically leisure and sportswear. The market for secondhand apparel is also expanding, it reports, as consumers become more conscious of their environmental footprints and focus on making more sustainable purchases.
In 2021, retail sales of apparel and footwear worldwide amounted to over $1.5 trillion (USD) worldwide. This figure is forecast to reach nearly $2 trillion by 2026. Within the sector, the global sportswear market was worth more than $350 billion in 2021. In the US, the total revenue of the apparel market reached almost $318 billion last year. China followed closely behind, with revenues of around $303 billion, followed by the UK at nearly $77 billion.
7 Ways NetSuite ERP Offers Key Wins for AFA
To compete effectively and profitably, companies operating in the AFA sector have to be able to meet changing consumer demands, stay on top of trends and shift quickly when needed. During the pandemic as more shoppers turned to the Internet to shop, for example, apparel and shoe manufacturers had to make the switch with them (or risk losing market share). Companies also need good inventory controls, access to reliable sources of supply (in many cases, overseas manufacturing firms), and environmentally-sustainable practices.
“Environmental sensitivity has become an emerging issue in the apparel industry,” Houston Chronicle reports. “The search for ways to incorporate more environmentally friendly methods throughout the apparel production cycle includes evaluating dyes, assembly, packaging and fiber production.”
One way AFA companies can tackle these and other challenges while also leveraging new opportunities is by replacing their legacy solutions, spreadsheets and manual processes with a unified, cloud-based enterprise resource planning (ERP) solution like NetSuite. Once in place, the ERP helps companies:
1. Gain real-time visibility
Make data-driven decisions by leveraging a real-time view of the business with role-based reports, dashboards and key performance indicators (KPIs).
2. Eliminate manual processes
Remove the need for multiple point solutions with a unified data model, enabling one instance of record for financials, inventory, orders and customers.
3. Adapt to quick market changes
Enter new geographies, open additional channels of sales or distribution and expand into new business models with a foundational platform to support your goals.
4. Simplify omni-channel sales and distribution
NetSuite is an end-to-end cloud software solution that supports omnichannel success for companies in the apparel, footwear and accessories industry.
5. Get more done with less
Increase staff productivity, close the financial books faster and leverage robust reporting tools that deliver real-time insight into financial performance.
6. Manage complex inventory requirements
NetSuite helps companies eliminate inventory silos across channels and achieve the perfect product assortment. Avoid stock-outs, free up cash flow and deliver on promises with a unified instance of inventory data across all channels.
7. Accelerate order-to-cash process
Decrease inventory holding costs and tie sales, finance and order fulfillment to pricing, sales order management and returns management.
All in One Place
NetSuite also helps apparel, footwear and accessories companies increase efficiencies, streamline operations and provide a better understanding of bottom-line costs while maintaining the right inventory mix across the business. With NetSuite Customer Relationship Management (CRM) and marketing capabilities, manufacturers and retailers can track campaign performance, manage sales incentive compensation and obtain a real-time view of customer interactions across all business channels.
A unified ERP also helps companies streamline their manufacturing processes, improve collaboration across partners, gain better visibility into their operations and deal with modern business challenges like the ongoing supply chain disruption. With a centralized business solution in place and one data source for all parties to work from—versus myriad spreadsheets and disparate systems—companies can also more effectively forecast sales, sense upcoming demand and make on-the-spot decisions that support their current and long-term goals.