FashionUnlocked: concept for a sustainable VMI platform

In the vibrant fashion world, where margins are under increasing pressure and companies strive for innovation, a unique committee met several times in Amsterdam in 2023, for the first time at @Fashion For Good. The faces behind the brands - Arjan Maat of Simplicity Networks GmbH, Harry van der Zee representing Profuomo, Robbert Slaats from Just Brands, Thom Timmer of My Jewellery and others - converged for an event that could shape the future of the industry.

This assembly, known as the VMI-committee 2023, brought together minds from various corners of the fashion realm, including Patrick Draijer of YAYA, Jort Jeursen from State of Art, Jeroen Dijkema from King Louie, Jorrit Weekenborg from Fabienne Chapot, Rob Schalker from A Fish Named Fred, and Wendy Kok of No-Excess. As the discussions unfolded, a consensus emerged: the fusion of Artificial Intelligence (AI) and Vendor Managed Inventory (VMI) was the path forward, as concluded by the VMI think tank in the summer of 2023.

The committee recognized the impact of AI on fashion, acknowledging its complexity and elusiveness. WAIR, spearheading a concrete AI launching program, had already demonstrated practical success with retailers and brands like DAKA, OFM., Shoeby, Ter Stal, and vDAL. The timing of this collaboration proved crucial in a world grappling with post-corona challenges, inflation, cost hikes, and dwindling consumer confidence. Mismatches on the shop floors (supply versus demand) have to be minimized in order to avoid waste boost full price sell through.

In response to these challenges, the committee championed the integration of VMI, not as a replacement for pre-orders but as a complementary strategy. The agility of VMI, particularly its in-season replenishment capabilities, proved essential in times of uncertain consumer behavior and market fluctuations.

The transition from a traditional model to a VMI model, as revealed by the committee, promised substantial benefits: a potential uplift of 25%-75% in sales growth and a 20-25% increase in gross margin revenue after markdowns. Multi-brand fashion retailers were urged to focus on strategic elements like location, qualified personnel, and an optimal shopping experience, allowing brands to take control of goods and ensure timely availability.

As the summer of 2023 unfolded, the industry grappled with questions about the future. How would fashion transition into an era where VMI became the new standard? The Financieel Dagblad (FD) in August 2023 laid out a prerequisite for success for a sustainable fashion industry: multi-party collaboration through end-to-end digital, AI-driven process orchestration and visibility. Data and consumer first. 

Enter the concept of FashionUnlocked.com – a non-commercial, digital, AI-driven collaboration platform designed to rebalance the value chains of the fashion industry (a cooperative, 50% owned by the brands and 50% by the retailers). The platform aimed to connect brands, retailers, distributors, and solution providers, fostering radical collaboration. A unified, generative AI-driven data model (by WAIR.ai) and adherence to RGM principles (https://www.microsoft.com/en-us/industry/blog/consumer-goods/2023/08/14/generative-ai-will-revolutionize-revenue-growth-management/ , August 14th, 2023 by Microsoft Corporation) formed the core of FashionUnlocked.com.

The vision was clear – to democratize AI in fashion, addressing challenges like data speed, accuracy, and sustainability. The platform envisioned a seamless flow from producer to consumer, with brands taking control of merchandise and sustainability throughout the value chain. This would create a more sustainable fashion sector with better profitability for multi-brand retailers.

However, the journey toward this vision required more than technological innovation. The call for radical collaboration echoed through the presentation. ERP's, solution providers, distributors, agents, and sector organizations should be invited to join the platform, contributing to its growth while following established rules.

The value proposition for brands and retailers was compelling. For brands, FashionUnlocked.com offered co-ownership, full control of the merchandise throughout the supply chain and other collaboration tools to align for optimal VMI and to manage risks. Retailers, on the other hand, could benefit from streamlined processes, just in time deliveries, minimize overstocks and boost full price sell through ratios. Despite a lower start margin factor for the retailers, they will have higher end margins and more earnings per square meter. 

As the presentation concluded, the emphasis on sustainability and collaboration remained at the forefront. FashionUnlocked.com isn't just a platform; it’s a way of thinking toward a more sustainable, interconnected, and innovative future for the fashion industry.

The call is to embrace radical collaboration, leverage AI, and join hands for a brighter future. In other words: take action to unlock the potential of a more profitable and sustainable fashion sector. 

At the heart of the FashionUnlocked concept lies a revolutionary approach to fashion industry collaboration, seamlessly integrating data connectivity, generative AI, and supply chain principles. The core elements include a unified, generative AI-driven data model that ensures daily updates and alignment of product data. FashionUnlocked facilitates Retailer Growth Management (RGM) through digital VMI contracts, upfront merchandise planning, and daily accurate reporting based on POS transactions. The platform democratizes generative AI, offering tools for inventory management and product descriptions (WAIR.ai). 

FashionUnlocked extends its support to customers in various aspects, including Product Data Management (PDM), Supplier Relationship Management (SRM), Customer Relationship Management (CRM), and Supply Chain Management (CSM). Moreover, the platform seamlessly integrates Vendor Managed Inventory (VMI), offering end-to-end solutions for handling restock, meeting contractual obligations, and ensuring financial transparency. With an automatic payment system at delivery, FashionUnlocked emerges as a comprehensive, AI-driven collaboration platform, transforming the fashion industry into a dynamic, interconnected ecosystem.

Please note: it has not yet been decided whether and when this platform will actually be realized. Let this concept be an inspiration and discussion piece for more people. So feel free to leave your thoughts or comments here or follow #FashionUnlocked on LinkedIn.