The Effect of E-Commerence on Supply Chain Management and Marketing in the Fashion Industry
‘Electronic commerce and the Internet are fundamentally changing the nature of supply chains, and redefining how consumers learn about, select, purchase, and use products and services’ (Sreenivas, 2007)
According to Barnes and Lea-Greenwood (2006) and Berger (n.d), mass-communication has allowed consumers greater access to information and consequently the performance gap between companies can no longer be hidden. With the introduction of e-commerce, how consumers behave and what they demand has changed. Mintel (2011) reported that over 55% of all Internet users research products via the Web before making a purchase either in-store or online. With so much information at hand, consumers have become more demanding. Their willingness to
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With consumers gaining more power in the marketing channel there has been a shift from push to pull in the supply-chain (Porter, 1985; Fernie, McKinnon & Sparks, 2010). This has resulted in a shift away from traditional methods of SCM, which were considered to be lean and forecast-driven, towards more agile and demand-driven supply-chains. As previously mentioned, there has been increased non-price competition in the fashion retail sector. Retailers such as Zara, H&M and New Look, have shifted their focus of competitive advantage towards fast response to changing fashion trends and consumer demand (Barnes & Lea-Greenwood, 2006). As identified by Christopher and Towill (2000), a lean approach to SCM is most powerful when cost is the winning criterion, although when service and customer value are most important, an agile approach to SCM is crucial. Fernie & Sparks (2009) argue, however, that there is no reason why supply-chain systems may not contain both lean and agile elements, creating a ‘leagile’ approach to SCM, with the aim for retailers being to create value for the customer at an acceptable cost as illustrated in Table 2.
Table 2: Comparison of lean, agile and leagile supply-chains Distinguishing attributes | Lean supply-chain | Agile supply-chain | Leagile supply-chain | Market demand | Predictable | Volatile |