The Organisation domain in the STOF model is about innovations in collaboration with other parties in the chain and organisation of the processes for delivering the service to the customer. An innovation that has been ongoing for somewhat longer in the chain is what is known as ‘fast fashion’. For many fashion retailers, the process commences from the supplier and designer who design a new collection a year beforehand. New collections are, for example, introduced twice per year into the store, after which the consumer buys the clothing. With ‘fast fashion’ the starting point is the buying pattern of the consumers, which is monitored closely: what’s popular, what’s the big seller, etcetera. The store manager then places orders with designers on the basis of this information. The logistics process is configured in such a way that the new collection is on display in the store within two weeks. This involves higher logistics and production costs, but, on the other hand, only products are sold for which there is a demand so they can be sold at full price, and little of the collection ends up in the sales. Examples of stores that use this process are Zara (Inditex), Peacocks and Forever21. This so-called chain reversal is seen as an important future strategy for physical stores (Molenaar, 2011).
Another innovation for which various examples can be given is online collaboration. For small, independent retailers it is difficult to compete online against the large platforms due to the costs and the knowhow required and also because it is difficult to attract sufficient consumers to a relatively unknown website or webshop. An increasing number of major players such as Amazon and Bol.com give small shops the possibility of using their platform. The benefit for such a platform is that their offering increases even further, and their position as a one-stop-shop is strengthened. For the small retailers, they not only benefit from all kinds of logistics processes of the webshop (order fulfilment, secure payments) but the reach of potential customers is increased many times compared to them having just their webshop. In the fashion industry, the Scandinavian firm Miinto is a good example of this. This platform provides independent fashion retailers with their online webshop that is part of the general catalogue of the platform. The fashion retailers can also ‘buy in’ other services from Miinto such as collection photography and transaction handling. Other examples are etsy.com, jeansonline.nl and topshoe.nl. The collaboration does not need to be exclusively based on product category (jeans, shoes) but can also, for example, be based on location – an example of which is the 9straatjes in Amsterdam (9straatjesonline.com).
However, the majority of the innovations encountered in the organisational domain concern logistics, for example, the smart integration of stock systems so that it is possible to see in the store or online whether and where a product is still available. There are also so-called stockless stores where customers can see the complete stock or collection in a physical store using iPads or large video walls, place their orders and have the products delivered to their homes. At the most, there are some demo products available in the store. An example of this is the Scottish retailer House of Fraser. The vast majority of the examples are however about delivery of products to customers. In fashion, delivery is one of the most important aspects of consumer satisfaction (Peters & Witte, 2013). Customer satisfaction is not only an important criterion for paying a lot of attention to delivery; the costs are also important. In 2012, a quarter of the 88 million online orders resulted in a return, for fashion this was as high as 60%, while for electronics it was only 5% (PWC, 2013). Returns and the logistics surrounding them cost a lot of money. As long as it remains difficult to implement suitable sizing online and to properly convey the colour and texture properties returns shall for the time being continue to be an important aspect of the service and the costs.
Although several criteria play a role in delivery, such as speed, convenience, costs and reliability, for the consumer it appears that the ability to remain in control is important. Research (PWC, 2013) shows that the ability to choose a fixed delivery time is the most important aspect (31%), followed by pick-up points from a local store (24%), next-day delivery (24%) and same-day delivery (8%). Schut et al. (2014) also find in a study that being able to determine the time of delivery is an important criterion for the customer (90%), this is only offered in 12% of the cases. Free returns are also a wish that emerged, with around 60% of consumers stating that to be important. In reality only just 15% of deliveries can be returned free of charge. A further important aspect of returns is: clear instructions about the return process and money credited back to the customer’s account quickly.
All kinds of innovative logistics solutions are now being used, from ordering online and in-store collection and/or returns (Click & Collect concepts), online reservation of an item of clothing in a particular store (Hunkemöller’s Check & Reserve), the delivery of ordered products to specific pick-up points and for which experiments are already being conducted with fitting rooms at pick-up points so that pick-up and returns can be combined (see www.deburen.nl). These can be staffed pick-up points (filling stations, schools, libraries, stores) or unstaffed pick-up points (safe-deposit boxes). In the Netherlands, there are already around 6000 pick-up points (Schut et al., 2014). The ideal solution is not easy to find, a customised solution sounds logical; however, there are many variables that have to be taken into account which, in any event, include the type of product (size, non-food/fresh/frozen, requirement for personal contact for signing or installation for example) and the type of customer. One customer will prefer speed, another convenience or price. Harmonisation between product, customer and process does not require only good operational implementations but also strategic choices about how to deal with deliveries (see Schut et al., 2014).
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Molenaar, C. 2011. Het einde van winkels? De strijd om de klant. Den Haag: SDU Uitgevers.
Peters, S. & E. Witte. 2013. De consument in 2020. Ede: GfK.
PWC. 2013. Ecology. What are Sustainability-Related Retail Future Trends in 2020 that Affect Environment, Dutch Society and Businesses? www.shopping2020.nl
Schut, G., Josten, L., Beek, A., Heinemans, L., Selimi, S. & B. Jansen. 2014. Consument organiseert in 2020 zijn eigen gemak. Postnl/Capgemini Consulting. Download van www.shopping2020.nl