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ΕλληνικάOn demand and pre-production
The pandemic has brought attention to one of the problems that have long plagued the fashion world: the disproportion between supply and demand and the resulting problem of overstocking. According to McKinsey’s report “The state of fashion 2021”, even before Covid-19, overstocking and widespread markdowns proliferated in the fashion industry to the point where only 60% of garments were sold at full price, creating billions of dollars in lost revenue and margins. During the pandemic, the situation worsened: in the face of a massive drop in orders, stock levels increased significantly, despite the efforts of brands and retailers to limit the damage.
On-demand production is among the three priorities to strategically address the problem of overproduction, alongside the reduction of assortment complexity and a new balance between price and value of products. The higher the percentage of on-demand production, the lower the overproduction.
In recent years, many brands have adopted the drop system: scheduled collection launches (weekly or monthly, usually) across a limited number of products rather than all at once, thus limiting waste and at the same time creating customer involvement and a sense of expectation with regard to these events, forcing them to stay up to date.
Gaia Segattini Knotwear, an Italian knitwear brand, for example, uses this system and releases its limited editions monthly: drops of single-product collections, functional garments adaptable to different body types, continuous in patternmaking and always new in terms of colours and patterns, made from remnants of fine yarns from companies in the Marche region.
If the model of on-demand production has so far been the prerogative of smaller brands, it is now being increasingly experimented by larger ones, for example Reebok, which has tested its models with consumer votes, making production conditional on exceeding a minimum demand threshold, or Telfar, which thanks to pre-order has tested a just-in-time production model, in which consumers buy items before they are produced and receive them several weeks or even months later.
A strategy that goes hand in hand with on-demand production is understanding consumer preferences, in order to direct production to meet demand, and technology is a very helpful tool to evaluate and analyse data.
Ultimately, pre-order or “made-to-order” models prevent overproduction, limit waste, and encourage conscious consumption. It is also a way to stand against the culture of encouraging customers to want more and more newness at rapid speed, educating customers to wait and desire, while creating a sense of involvement and exclusivity around the new items.