‘Fashion industry is characterised by short product life cycles, volatile and unpredictable demand, tremendous product variety, long and inflexible supply processes and a complex supply chain.’
(Sen, 2007, pp. 1)
Due to the nature of the fashion industry, the demand in supply chain changes rapidly. Time is a crucial factor for fashion and therefore supply chain management should be sensitive according to the change in demand (Sull et al., 2008).
This report is going to compare two supply chains in the fashion industry – ASOS and Topshop. The aim is to evaluate different logistic systems across brands and address related issues.
2.0 Overview and Demographics
2.1 ASOS
The fashion industry has been known as the third largest online market with sales of £1.7 billion in 2006 (Meadows, 2007).
ASOS launched its market position in June 2000 and became one of the biggest and fastest growing online fashion retailers in UK (Bland, 2011).
Its scale is enormous for an online-based company which owned more than 400 brands and covers 167 countries (ASOS, 2013).
It is approximated that over 1300 new product lines are introduced by ASOS every week, which show the importance of supply chain management (Meadows, 2007) Moreover, with an increase in profit by 137% in 2007, it obviously showed that ASOS owned a sound stock managing system.
The Essay on Supply Map Chain
Abstract The supply map and the supply chain management consist of manufacturers, distributors and retailers. The marketing mix determines the product mix and the product mix helps the fashion designer to control the target market. The distributor of the finished garment later determines how the product would distribute throughout the department and discount stores. The target market will help the ...
2.2 Topshop
By launching its brand since 1964, Topshop has a really long history in the fashion industry. With more than 100 retail stores, Topshop is noticeably a well-known brand across the UK. Although it provides shipping to over 100 countries, it mainly emphasises on British style and targeting the UK market (Topshop, 2013).
Also, with a slightly different target demographic, Topshop seems to be aiming at high fashion industry as it engages in London Fashion Week (Jon, 2011).
Different from ASOS, Topshop is a really well known retailer with the flagship store located in London Oxford Circuit since 1994. It showed that Topshop is a well-lunched company which its profit can be up to £2.78 billion a year (Jon, 2011).
Table 1. Comparing background of ASOS and Topshop.
3.0 Supply Chain
Both ASOS and Topshop are competitive fashion retailers, however, they illustrate 2 different supply chains for the same industry. ASOS is a special case as it consists of both lean and agile supply chain; with its own production line together with partnerships with other brands, it benefits in economies of scale and low production cost as its partners are mainly companies with massive production lines. At the same time, it launched its own brand to keep the awareness of consumers. The risk of large investment is then outsourced and bared by other partners. Topshop uses agile supply chain due to its history, but it is also enjoying a greater involvement throughout the supply chain as it vertically integrated the supply chain. The advantage of fast response to market sensitivity is then archived as it controls the production.
3.1Supply Chain & Logistic management of ASOS
Table 2. Supply Chain model of e-commerce (ASOS).
Source: Foresight Retail Logistics Task Force, 2000, p 15
Compared to Topshop, ASOS does not own any actual retail stores apart from its website (ASOS, 2013).
The rise of e-commerce has been seen as a major threat to retailers (Burt and Sparks, 2003).
In the case of ASOS, apart from being a retailer, its main core part of the supply chain is the order-picking centre (Fernie, 2009) (see Table 2).
The role of ASOS was blurry as it tried to backward integrate the function of wholesalers. However, due to a serious fire in 2005, the company had changed to a logistic service company alongside well-established delivery services (Meadows, 2007).
The Research paper on Emerging Logistics Strategy
The purpose of this paper is to identify and describe the emerging business logistics strategies which have emerged in the market place over the last few decades and will remain dominant well into the better half of twenty first century. Analysis through this work will argue that the two strategic concepts, namely supply chain integration and cycle time compression, represent distinctly different ...
The advantage of it is to save investment costs by outsourcing production cost to partnered brands (Fernie, 2009).
The initial benefit of it is a 32% reduction of cost in 2006 (Meadows, 2007).
Table 3. Product life cycle of ASOS Source: The Times 100, NA
Moreover, as product life cycle of fashion industry is tremendously short, a well-established supply chain is essential for ASOS. For a normal ASOS-branded dress, it goes through 4 stages: introduction, growth, maturity and decline (Kevsic, 2008).
These stages passed in a surprisingly short period, and therefore ASOS keeps on launching new designs and products (The Times 100, NA).
The process of ASOS supply chain can be divided by ASOS own-branded and partnerships with other fashion brands.
For a dress of ASOS own-branded, design and material will be decided by ASOS in-house designer and then send back to suppliers for production. After the dress is made, producers will send the final dress back to ASOS logistic centre for stocking while the dress will be available for customers to order on www.ASOS.com (ASOS, 2013).
For partners of ASOS, they generally go through the same production process as ASOS own-branded dress. However, they receive the order from ASOS and its merchandisers instead of consumers. It is an important process for ASOS as understanding the product lifecycle and stock level, they can plan the introduction and withdrawal of product. Also price can be adjusted accordingly with which sales are introduced during the decline period (The Times 100, NA).
However, this supply chain requires a high collaboration of functions across supply chain (Fernie, 2009).
The reason why ASOS can eliminate the traditional functions of a retail store is due to its well-managed supply chain, effective stock keeping system and fast-going logistic system (Meadows, 2007).
3.2 Supply Chain of Topshop
Table 4. Logistic model of store-based retailers (Topshop).
Source: Foresight Retail Logistics Task Force, 2000, p 14
Table 5. Monthly Market Share of UK retail market Source: The Times 100, NA
The Essay on Walmart’s Retail Link Supply Chain
1. Where does Walmart’s supply chain start? What triggers Walmart’s Retail Link system to ship goods to local Walmart Stores? Walmart’s Retail Link is triggered by consumer purchases in local stores by point-of-purchase cash register data. This is in contrast to more traditional supply chains which often start with a manufacturer or distributor shipping goods to local stores based on forecast ...
It shows that between 2004 and 2007, total retail growth was only 4.6% while online retail was increased by 130% (The Times 100, NA) (Table 5).
With no doubt, it seems more difficult for retail shops to survive, but Lindquist (2002) stated that shoppers prefer to integrate internet shopping with other forms of shopping (Lindquist et al., 2002).
The supply chain of Topshop and its changes can help us to understand how retail shops nowadays adjust its position in the market.
Unsurprisingly, Topshop showed a vertical integrated supply chain in which Topshop involves in all different stages throughout the supply chain. With designs from in-house designers, they go through production stage by suppliers. Ready-garments will be sent directly to the Topshop warehouse and then distributed to different retail shops. Consumers can buy products directly from the shops, which showed a direct business-to-customer (B2C) supply chain (Topshop, 2012).
However, in order to compete with online retailing, Topshop launched its online retailing website in 2000 that provides direct delivery services. It provides convenience to consumers. So as to move forward, Topshop introduced self-pick up services in 2012 where consumers can order online and pick up the products in-store (Topshop, 2013) (Table 6).
With no doubt, it is definitely an advantage.
Table 6. Topshop self picking-up service. Source: Topshop, 2013
Moreover, as Topshop is a fast fashion brand, in order to minimise its stock level, a Kanban system was used to keep track of sales of products. So that they can produce more popular products accordingly, it is a useful stock management system based on consumers’ response to the products. They can then foresee the upcoming trend and consumers’ expectations.
4.0 Conclusion
Both brands have their strengths and weaknesses. According to diversity, ASOS seems to have a better performance. It incorporates different brands at diverse price ranges and styles; consumers can enjoy one-stop shopping by just visiting ASOS. Also, as an e-commerce, the coverage of ASOS is worldwide while Topshop is mainly targets the UK market.
The Essay on Resource Prices Product Price Supply
Most people that are common shoppers have encountered a situation where the product that they were seeking to buy was not available. It is very easy to see that certain products do have an ample supply due to many reasons. Other than the price of that product, there are six major non-determinate factors of supply. These factors are: Number of Sellers, Technology, Resource Prices, Taxes and ...
However, Topshop is targeting a higher fashion market. According to brand building, Topshop seems to be more successful. By engaging in fashion week, it obviously shows that Topshop is aiming at a different demographic compared to ASOS. Moreover, with a physical retail shop, consumers could enjoy better personal services. It makes Topshop more reliable for consumers.
