Skip to main content
SpringerLink
Log in
Book cover

Analytical Modeling Research in Fashion Business pp 51–78Cite as

The Role of Quick Response in Accelerating Sales of Fashion Goods

Part of the Springer Series in Fashion Business book series (SSFB)

Abstract

Quick response has been proposed as an appropriate operational strategy to serve volatile markets. In fashion, postponing design, production, and distribution as much as possible may indeed reduce the uncertainty related to product success. In this paper, we provide an empirical study of the influence of lead time and sourcing origin on product success, based on data provided by a European fast fashion retailer. We provide a model of sales diffusion over time where product success is characterized by the speed of sales. We then evaluate how the speed of sales is influenced by the design time and the time-to-market of each particular product. We find that delaying the time of design is very beneficial, because it allows the firm to learn about fashion trends. The effect of time-to-market is more subtle. For a shorter time-to-market, speed of sales is considerably higher, but there is limited learning obtained by postponing design. In contrast, for longer time-to-market, speed of sales is lower, but the learning is higher, so for products designed late in the season, the speed of sales is similar to that of items with short time-to-market.

Keywords

  • Dynamic demand model
  • Demand estimation
  • Lead time management

This is a preview of subscription content, access via your institution.

Chapter
USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   84.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD   109.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD   109.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

References

  • Amihud Y, Medenelson H (1989) Inventory behaviour and market power: an empirical investigation. Int J Ind Organ 7(2):269–280

    CrossRef  Google Scholar 

  • Balakrishnan A, Pangburn M, Stavrulaki E (2004) “Stack them high, let’em fly”: lot-sizing policies when inventories stimulate demand. Manage Sci 50(5):630–644

    CrossRef  Google Scholar 

  • Baron O, Berman O, Perry D (2011) Shelf space management when demand depends on the inventory level. Prod Oper Manage 20(5):714–726

    CrossRef  Google Scholar 

  • Berfield S, Baigorri M (2013) Zara’s fast-fashion edge. Business week, Nov 14 (online)

    Google Scholar 

  • Bernstein F, Martínez-de-Albéniz V (2014) Dynamic product rotation in the presence of strategic customers. Manage Sci Forthcoming

    Google Scholar 

  • Butler S (2013) Inditex: Spain’s fashion powerhouse you’ve probably never heard of. The Guardian, Dec 15 (online)

    Google Scholar 

  • Cachon G, Swinney R (2011) The value of fast fashion: quick response, enhanced design, and strategic consumer behavior. Manage Sci 57(4):778–795

    CrossRef  Google Scholar 

  • Cachon GP, Terwiesch C (2009) Matching supply with demand: an introduction to operations management. McGraw-Hill/Irwin, New York, USA

    Google Scholar 

  • Caldentey C, Caro F (2010) Dynamic assortment planning. Working paper, UCLA

    Google Scholar 

  • Caro F (2011) ZARA: staying fast and fresh. Technical report, UCLA Anderson School of Management case 612-006-1

    Google Scholar 

  • Caro F, Gallien J (2007) Dynamic assortment with demand learning for seasonal consumer goods. Manage Sci 53(2):276–292

    CrossRef  Google Scholar 

  • Caro F, Gallien J (2010) Inventory management of a fast-fashion retail network. Oper Res 58(2):257–273

    CrossRef  Google Scholar 

  • Caro F, Gallien J, Daz M, Garca J, Corredoira J, Montes M, Ramos J, Correa J (2010) Zara uses operations research to reengineer its global distribution process. Interfaces 40(1):71–84

    CrossRef  Google Scholar 

  • Caro F, Martínez-de-Albéniz V (2013) Operations management in apparel retailing: processes, frameworks and optimization. BEIO, Boletn de Estadstica e Investigación Operativa 29(2):103–116

    Google Scholar 

  • Caro F, Martínez-de-Albéniz V (2015) Fast fashion: business model overview and research opportunities. In: Agrawal N, Smith SA (eds) Retail supply chain management: quantitative models and empirical studies, 2nd edn, ed. Springer, New York

    Google Scholar 

  • Caro F, Martínez-de Albéniz V, Rusmevichientong P (2014) The assortment packing problem: multiperiod assortment planning for short-lived products. Manage Sci 60(11):2701–2721

    CrossRef  Google Scholar 

  • Chen H, Frank M, Wu O (2005) What actually happened to the inventories of American companies between 1981 and 2000? Manage Sci 51(7):1015–1031

    Google Scholar 

  • Christopher M, Lowson R, Peck H (2004) Creating agile supply chains in the fashion industry. Int J Retail Distrib Manage 32(8):367–376

    CrossRef  Google Scholar 

  • Çnar E, Martínez-de-Albéniz V (2013) A closed-loop approach to dynamic assortment planning. Working paper, IESE Business School

    Google Scholar 

  • Corstjens M, Doyle P (1981) A model for optimizing retail space allocations. Manage Sci 27(7):822–833

    CrossRef  Google Scholar 

  • Curhan RC (1973) Shelf space allocation and profit maximization in mass retailing. J Mark 37(3):54–60

    CrossRef  Google Scholar 

  • El País (2008) Estrenar ropa dura segundos. El País, Jan 2 (online)

    Google Scholar 

  • El País (2011) Inditex escapa a la crisis. El País, Jan 16 (online)

    Google Scholar 

  • Eppen G, Iyer A (1997) Backup agreements in fashion buying—the value of upstream flexibility. Manage Sci 43(11):1469–1484

    CrossRef  Google Scholar 

  • Feitzinger E, Lee H (1997) Mass customization at Hewlett-Packard: the power of postponement. Harvard Bus Rev 117(1):116–121

    Google Scholar 

  • Ferdows K, Machuca JAD, Lewis M (2002) Zara. Technical report, ECCH case 603-002-1

    Google Scholar 

  • Fisher M (2009) OR FORUM–rocket science retailing: the 2006 Philip McCord Morse Lecture. Oper Res 57(3):527–540

    CrossRef  Google Scholar 

  • Fisher ML (1997) What is the right supply chain for your product? Harvard Bus Rev 75:105–117

    Google Scholar 

  • Fisher ML, Rajaram K, Raman A (2001) Optimizing inventory replenishment of retail fashion products. Manuf Serv Oper Manage 3(3):230–241

    Google Scholar 

  • Fisher ML, Raman A (1996) Reducing the cost of demand uncertainty through accurate response to early sales. Oper Res 44(1):87–99

    CrossRef  Google Scholar 

  • Foroohar R (2006) A new fashion frontier. Newsweek International, Mar 19 (online)

    Google Scholar 

  • Gaur V, Fisher M, Raman A (2005) An econometric analysis of inventory turnover performance in retail services. Manage Sci 51(2):181–194

    CrossRef  Google Scholar 

  • Gaur V, Honhon D (2006) Assortment planning and inventory decisions under a locational choice model. Manage Sci 52(10):1528–1543

    CrossRef  Google Scholar 

  • Ghemawat P, Nueno JL (2003) ZARA: fast fashion. Technical report, Harvard Business School Multimedia Case 9-703-416

    Google Scholar 

  • Hammond JH, Kelly MG (1990) Quick response in the apparel industry. Technical report, Harvard Business School Note 9-690-038

    Google Scholar 

  • Heath DC, Jackson PL (1994) Modeling the evolution of demand forecasts with application to safety stock analysis in production/distribution systems. IIE Trans 26(3):17–30

    CrossRef  Google Scholar 

  • H&M (2007) Annual report

    Google Scholar 

  • Iyer AV, Bergen ME (1997) Quick response in manufacturer-retailer channels. Manage Sci 43(4):559–570

    CrossRef  Google Scholar 

  • Keeley G, Clark A (2008) Zara overtakes gap to become world’s largest clothing retailer. The Guardian, Aug 11 (online)

    Google Scholar 

  • Kesavan S, Gaur V, Raman A (2010) Do inventory and gross margin data improve sales forecasts for U.S. public retailers? Manage Sci 56(9):1519–1533

    CrossRef  Google Scholar 

  • Lee H, Tang C (1997) Modelling the costs and benefits of delayed product differentiation. Manage Sci 43(1):40–53

    CrossRef  Google Scholar 

  • Martínez-de-Albéniz V, Roels G (2011) Competing for shelf space. Prod Oper Manage 20(1):32–46

    CrossRef  Google Scholar 

  • McAfee A, Dessain V, Sjöman A (2004) ZARA: IT for fast fashion. Technical report, Harvard Business School case 9-604-081

    Google Scholar 

  • Musalem A, Olivares M, Bradlow E, Terwiesch C, Corsten D (2010) Structural estimation of the effect of out-of-stocks. Manage Sci 56(7):1180–1197

    CrossRef  Google Scholar 

  • Olivares M, Cachon G (2009) Competing Retailers and Inventory: an empirical investigation of general motors’ dealerships in isolated U.S. markets. Manage Sci 55(9):1586–1604

    CrossRef  Google Scholar 

  • Rumyantsev S, Netessine S (2007) What can be learned from classical inventory models? A cross-industry exploratory investigation. Manuf Serv Oper Manage 9(4):409–429

    Google Scholar 

  • Smith S, Achabal D (1998) Clearance pricing and inventory policies for retail chains. Manage Sci 44(3):285–300

    CrossRef  Google Scholar 

  • Song J-S, Zipkin PH (2012) Newsvendor problems with sequentially revealed demand information. Naval Res Logistics 59(8):601–612

    CrossRef  Google Scholar 

  • Ton Z, Raman A (2010) The effect of product variety and inventory levels on retail store sales: a longitudinal study. Prod Oper Manage 19(5):546–560

    CrossRef  Google Scholar 

  • Wang Y, Gerchak Y (2001) Supply chain coordination when demand is shelf-space dependent. Manuf Serv Oper Manage 3(1):82–87

    Google Scholar 

Download references

Acknowledgements

V. Martínez-de-Albéniz’s research was supported in part by the European Research Council—ref. ERC-2011-StG 283300-REACTOPS and by the Spanish Ministry of Economics and Competitiveness (Ministerio de Economa y Competitividad)—refs. ECO2011-29536 and ECO2014-59998-P.

Author information

Authors and Affiliations

  1. IESE Business School, University of Navarra, Av. Pearson 21, 08034, Barcelona, Spain

    Alejandro Lago, Victor Martínez-de-Albéniz, Philip Moscoso & Andreu Vall

Authors
  1. Alejandro Lago
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Victor Martínez-de-Albéniz
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Philip Moscoso
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Andreu Vall
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Alejandro Lago .

Editor information

Editors and Affiliations

  1. Inst of Textiles & Clothing, Hong Kong Polytechnic Univ, Hung Hom, Hong Kong

    Tsan-Ming Choi

Rights and permissions

Reprints and Permissions

Copyright information

© 2016 Springer Science+Business Media Singapore

About this chapter

Cite this chapter

Lago, A., Martínez-de-Albéniz, V., Moscoso, P., Vall, A. (2016). The Role of Quick Response in Accelerating Sales of Fashion Goods. In: Choi, TM. (eds) Analytical Modeling Research in Fashion Business. Springer Series in Fashion Business. Springer, Singapore. https://doi.org/10.1007/978-981-10-1014-9_4

Download citation

search

Navigation