Why is customer centricity so important today?
The fashion industry operated on a product-centric push model, where retailers and fashion brands—with the help of trend forecasters— determined the styles and trends to produce months in advance and then pushed them to consumers. The new connected consumer no longer looks to magazine editors and fashion professionals for style cues. People now take their fashion inspiration from Instagram influencers, internet reviews and their peers. And these “trends” can change as quickly as it takes to refresh a social media feed.
In this landscape of consumer unpredictability, customer centricity has become a critical success factor. Customer centricity means putting the customer at the center of everything. It requires redirecting focus from the product and the brand to the customer. The goal is to create trust and loyalty amongst customers. This is no easy feat in an age where customers’ brand loyalty only stretches back to their last purchase, customer centric companies benefit from greater trust and loyalty from their customers. In sum, customer centricity isn’t just the buzzword du jour, it’s a real survival mechanism.
The rewards of a customer-centric strategy
Industry leaders are transforming their operations to get closer to their customers, physically and digitally. Using data analytics and the latest in automation technology for insights into what their customers want and implement smart manufacturing processes that enable them to give the customers want when they want it. Customer centric companies gain a deeper understanding of customers that allows them to align processes, transactions, interactions and communication to their customers’ preferences and habits. These companies can then produce what the customer wants, at the price she is willing to pay and deliver it in the timeframe she desires. It also requires a certain level of collaboration with customers.
Are companies working with a traditional push supply chain strategy capable of achieving this level of customer intimacy and knowledge? Not likely. Thanks to the transformative power of the internet, countless brands have sprung up, willing and able to use new technology to better serve and understand their customers. Any companies that refuse to do the same risk irrelevance.
This irrelevance will be felt on the company’s bottom line. The examples of H&M and Zara illustrate the importance of a customer centricity in the fast-moving fashion world. Zara, In 2018, H&M was forced to close 160 stores after accumulating more than $4 billion in unsold inventory, forcing significant discounting to clear out the goods. The effect of this resulted in unexpected reductions in profits for the sixth straight quarter.
Read our latest e-guide ‘Demand-based production: strategies for survival in a changing fashion world’
If you want to know more, click to read our latest e-guide ‘Demand-based production: strategies for survival in a changing fashion world’.