A focused supply chain strategy for luxury fashion management

Abstract

Purpose

Globalization and advanced manufacturing capabilities changed industrial dynamics. To this end, not only were new retail concepts developed to broaden the distribution toward larger consumer bases, but alternative ways were also sought to reorganize supply networks for a balance between local and global production. Yet, the choice of supply network configurations must be coherent with a fashion companies’ critical success factors. Hence, it is pivotal to understand how such large brand portfolios and global supply networks could be effectively managed in a united way. In this vein, the purpose of this paper is to explain how the triplet of product, brand, and retail channel could affect SC performance, and how the positioning of a luxury company could depend on managerial attitudes.

Design/methodology/approach

Subsequent to an extensive literature review, 30 most frequently quoted key performance indicators (KPIs) were derived. A Delphi study was then employed to reach a consensus and 17 key KPIs were derived considering the key SC performance areas and marketing dimensions. Survey technique was deployed to examine the impact of strategic combinations of product, brand, and retail channel on SC strategy. Survey results were analyzed through factor analysis where five principal components emerged to represent performance areas. ANOVA technique was then employed to explore the dependence between product-brand-retail channel and key performance areas.

Findings

Brand, retail channel, and product directly affect operational performance. The positioning of a fashion company would depend on its management attitude toward strategy segmentation and considered stage of the SC. The respondents’ profile analysis further showed a preference to segment the SC based on products. Interestingly, this finding is not aligned with earlier research (Brun and Castelli, 2008) suggesting that the brand was to become the most relevant driver for SC segmentation.

Originality/value

Academic development and empirical testing is rather rare in the luxury fashion context. Undeniably, SC strategies represent a very relevant issue for fashion companies, and the present study could be considered a first statistical step toward SC segmentation for luxury fashion companies.

Citation

Brun, A., Castelli, C. and Karaosman, H. (2017), "A focused supply chain strategy for luxury fashion management", Journal of Fashion Marketing and Management, Vol. 21 No. 4, pp. 544-563. https://doi.org/10.1108/JFMM-03-2017-0026