Transcript Substance of the Fashion Industry

Substance of
the Fashion
Industry
Fashion Marketing
Chapter 4
Channel of Distribution
 Def.:
the route that products take from
the original source, through the
production process, and sales to the
ultimate user.
 2 channels:


Soft Goods Chain
Four Groups Approach
 Fashion
merchandisers should understand
the processes, timing, and practices of
the individual segments or groups within
the overall fashion industry
The Soft Goods Chain
 Also,
called textile/apparel pipeline
 The channel of distribution for apparel
and home decorating textiles.
 3 main Segments:



Textile
Apparel
Retail
Textiles

Fibers: very thin strands that are the beginning
of textiles

Yarns: continuous strands of textile fibers that
are processed into fabrics

Fabrics: long pieces of cloth

Greige goods: fabrics in an unfinished state
Apparel
 Produces
finished garments and
accessories
 Steps in the Apparel Segment
1.
The apparel must be designed
 Designing
is the process of creating new
versions of garments, accessories, or other
items
 Design ideas move fashion forward by
creating change
Apparel
 Steps
2.
in the Apparel Segment
After apparel is designed it must be
manufactured
 Almost
all are mass-produced in factories
 They are cut out of fabrics in large numbers
and sewn along assembly lines
3.
Apparel sales involves selling the
manufactured garments in large
quantities to retail stores
Apparel
 Resellers
– wholesalers who serve to
distribute goods between producers and
retailers or users
Retail Segment
 Retailing
is the selling of merchandise
directly to customers



Retailers buy finished goods in large amounts
from the apparel segment that precedes
them in the pipeline
Retailers pay a wholesale price for this
quantity buying of finished products
Retailers put these items out “on the floor” of
their stores for sale at a retail prices, which is
higher than the wholesale purchase price
Retail Segment




Retailers pay a wholesale price for this
quantity buying of finished products
Retailers put these items out “on the floor”
of their stores for sale at a retail prices,
which is higher than the wholesale
purchase price
The markup covers cost of heat, lights,
taxes, sales help, and other expenses
Retailers do single item selling of garments,
accessories, and other goods to consumers
The Four Groups Approach

Separates the fashion industry into 4
main groups of business:
1.
2.
3.
4.
Primary group (raw materials: textiles,
leathers, furs)
Secondary group (manufacturing:
garments, accessories)
Retail group (final distribution; stores
catalogs, internet, TV sales)
Auxiliary group (fashion-related; trade
associations, publications, and consultants)
Vertical Integration
 The
combining of 2 or more steps of the
pipelines within one company and under
one management.
 Example:
Textile mills produces their own
yarn, fabrics and perform the finishing
process.
Commodity, Fashion, and
Seasonal Goods
 Two

main categories of merchandise
Commodity products
 Staple
goods…hardly ever change in design
and are in constant demand…sales are
predictable

Examples: cotton/polyester blend fabric, and
men’s white business shirts and dark socks
Commodity, Fashion, and
Seasonal Goods
 Two

main categories of merchandise
Fashion products
 Always
changing
 Last year’s model or style cannot be sold this
year because it is not in demand
 Difficult to predict what the demand will be
 Wrong decisions result in huge financial losses

Seasonal products
 Change
in popularity or demand with the
seasons of the year