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NRF 2014: Fashion retailers update IT

NRF 2014: Fashion retailers update IT
Tuesday January 14 2014

Global fashion retailers are working to update their core systems in line with rapidly evolving business models and customer expectations, writes Miya Knights

As the lines between manufacturing, distribution and retail become increasingly blurred, fashion retailers are responding by developing more sophisticated and integrated enterprise resource planning (ERP) systems.

That's according to ERP giant SAP, which gathered some of its biggest fashion retail customers to discuss their IT development activities at the Retail Big Show 2014 held in New York this week by the US  National Retail Federation (NRF).

Historically fashion brand owners and manufacturers have needed to manage supply and demand for wholesale business. But, as their brands have grown globally, so their direct-to-consumer retail businesses have grown too, creating greater business complexity.

Managing channel complexity

Luxottica, for example, which is the world's largest eyewear company, controlling over 80% of the world's major eyewear brands, including Ray-Ban, maintains four instances of SAP according to Dario Scagliotti, Luxottica Group chief information officer (CIO).

"We have two regional instances of SAP for retail and two for wholesale," said Scagliotti. "Our key challenge is around the evolution of our business model and consumer behaviour. The fear is that our separate IT systems act as a roadblock rather than as an enabler of innovation."

Jan Brecht, Adidas Group CIO, said: "We outsourced production in the mid-90s, so we're not a manufacturer but a wholesaler. Since then, the growth of our fully owned stores has made us also a retailer."

Brecht explained how, as a result of its growth and like Luxottica, the footwear company uses both SAP Apparel and Footwear (SAP AFS) and SAP Retail to manage its business. "We are now working with SAP to develop a new integrated solution, so we have a single point of truth," he added.

Centralised data and analytics

The SAP customers all agreed that their work to co-develop an integrated ERP platform on top of the vendor's in-memory computing platform was key to helping them keep pace with 'omnichannel' business demands, for wholesale, franchise and retail management, analysis and decision making using one set of master data and powerful analytic capabilities.

Ludo Oninck, Tommy Hilfiger CIO, confirmed: "For us, when SAP said 'let's co-develop a new solution,' we said 'yes' because we saw the need to integrate our retail and wholesale businesses on a single backbone."

Each customer confirmed that they were already SAP HANA users and, while SAP is looking to bring the fruits of its co-development efforts to market later this year, some are already planning roll outs this year and into the next.

Michael Braine, retail and optical senior vice president and CIO for Luxottica, summed up: "We need systems hat provide a single source of data across channels to make the customer experience seamless. Returns management, pricing and so on can be enabled and optimised with such IT solutions moving forward."

Tagged as: Luxottica | Tommy Hilfiger | Adidas | fashion | wholesale | manufacturer | distribution | franchise | ERP | supply chain | SAP