Article 3

4.3.1. Purpose and overview

Factory Boutique Shima has much in common with the retail concept Knit-on-Demand.

The aim of Article 3 was to examine the way complete garment knitting technology has been used for MC of knitted products in Factory Boutique Shimas’s design and production concept. Customisation rests on collaboration between a customer and a sales assistant. Several options are presented in the choice of style, material, size, trimmings, and colour. Swatches of fabric, fashion magazines, and yarn colour charts are available in the store to inspire customers to design a product. A selection of garments of various types and sizes is also on hand to support the client during the customisation process. The configuration or co-design phase is a process in which the customer navigates a series of options. The shop assistant writes or draws information on a customisation form that later becomes the basis for manufacturing the garment. When structures, patterns, colours, and all other options have been selected, a Computer-Assisted Design (CAD) system simulates the appearance of the completed garment. The manufacturing itself takes place

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after the client has purchased and paid for the product. Thus, nothing is produced until it has been ordered and paid for, and so the percentage of garments sold at full price (sell-through) is much higher than for a business model where garments are produced in advance of being sold (Mattila, 1999).

The investigation followed an inductive case study approach based on company visits and interviews with shop personnel. Quantitative data were collected and a Strengths–

Weaknesses–Opportunities–Threats (SWOT) analysis performed using qualitative data to identify critical success factors in fashion retailing.

4.3.2 Principal findings

The SWOT analysis shown in Table 4.3 indicates some strengths, such as a high sell-through factor, no stockpiled inventory of ready-made garments, and a positive shopping experience for the customer. The Factory Boutique Shima concept suggests how their WholeGarment technology, as the process is called by that company, can be used for MC in the future. There are also business advantages in having a customer pay for a product before it is manufactured, and this may become one way for fashion retailing companies to compete for market share in the future. It is also very expensive to carry an inventory that may have gone out of fashion by the time it reaches the shop. The current system, in which one or two staff members devote their full attention to a customer during the co-design process, pleases customers. However, attending to one customer at a time is costly for the company, and so Factory Boutique Shima seeks to develop its co-design system to the point where customers do more of the customisation themselves.

Table 4.3. Strengths-Weaknesses-Opportunities-Threats (SWOT) analysis.

Strengths Weaknesses

Many years of knitting technology

experience Customers cannot take home the product with them No inventory of ready-made garments Risk of long queue of customer in the shop No seasonal sales Limited retailing experience

Positive shopping experience Time consuming co-design process High sell-through factor Little reuse of customer information

Opportunities Threats

To develop the co-design process Limited design options available in WholeGarment Large potential markets Customers may be dissatisfied after delivery Sell know-how to other retailers Customers must wait to receive garment purchased

Internet sales Time consuming co-design process

Limited interest among consumers

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The SWOT analysis suggests that Internet sales may present an opportunity for the future. With an efficient co-design system on a company’s web page, a vast number of customers could be served at one time. Obtaining accurate customer measurements remains a challenge. One solution is to let customers take and enter their own measurements into the co-design system, as many companies already do. The analysis showed two main areas in which Factory Boutique Shima may improve their business concept: 1) adapting MC to products that can be manufactured with complete garment technology, and 2) developing the customisation concept.

The quantitative data in Table 4.4 indicates that the important fashion logistics factors for success (sell-through, control of lost sales, and stock turn) may be more positive for Factory Boutique Shima than they are for traditional fashion retailing companies. The data presented shows that the sell-through factor is from 90% to 100%, compared to an average sell-through of 65% to 70% in ordinary fashion retailing (Mattila, King and Ojala, 2002).

Table 4.4. Critical fashion logistics factors of success.

The high sell-through percentage is due to the fact that nothing is produced that is not sold. Only customers dissatisfied with their garments will lower this percentage. Lost sales will be minimised because garments are generally customised, thereby increasing a client’s likelihood of satisfaction.

A traditional retailing company that turns around its stock four times per year has a great deal of money tied up in inventory, thus negatively affecting its profitability. The stock turnaround for Factory Boutique Shima is much greater because only such raw materials as yarn and trim, but no ready-made garments, are kept in inventory. Complete garment technology also makes it possible to produce a garment faster than by conventional methods. It therefore lends itself to the future development of MC concepts of flat-knitted fashion products. Nevertheless, our analysis also showed limited interest in the market for the customisation of coarse-knitted garments. This may be due to the time-consuming, personnel-intensive co-design process, which, if improved, might encourage the spread of the MC concept.

Success factors Ordinary fashion retailing Factory Boutique Shima

Sell-through 65% to 70% 90% to 100%

Lost sales 20% Very few lost sales

Stock turn 4 times per year Very high

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