Looking in the Rearview Mirror

When learning to drive, we are taught to periodically check the rearview mirror as we move down the road. This is part of scanning our surroundings and is essential when we need to brake suddenly. Without it, we may miss important context, like a driver following too closely, and trigger unintended consequences.

We argue that merchant teams at retailers and brands can benefit from a rearview mirror of their own. Today, teams need a deeper understanding of how decisions made at the brand level ripple backward through the supply chain. Without that context, product and assortment choices can unknowingly create avoidable financial and operational costs.

Let us explain.

Merchants are trained to focus on “the buy.”

Of course, this is to be expected. The buy is the crux of the role and everything rolls up into it. Further, the assortment has to resonate with the customer. That means, customers are spending money on it, and preferably, not at a discount. While curating the assortment, merchants need to stay focused on both sales and margin goals.

There is a natural obsession over the downstream impact of product decisions: the shop floor, the customer, what happens next. And, since this is the fashion business, what is “in vogue” at the moment can become yesterday’s news rather quickly. Meaning, it won’t be too long before the focus shifts to the next buy or even making changes to the current one.

Consider that, for a merchant, a meeting with a retail buyer is simple. The buyer gets exactly what they are looking for and any possible product/assortment changes are kept to a minimum. In reality, it is very common to add or cancel styles or make promises to department stores for color tweaks, print changes, style adjustments and the like.

A merchant takes the list of changes and promises back to their global merchandising team and asks them to deliver. These seem to be straightforward requests and most of the time the changes are made.

And since the focus is strictly forward looking. There is no need to look backwards to think about what the possible impacts of any product or assortment changes will be.

We move on to what’s next.

But while the merchant’s focus is forward, the change requests set off a cascade of changes in the opposite direction that are essentially out of sight, out of mind.

For instance, consider a color change. If global merchandising approves it, a color swap triggers product development and sourcing to notify vendors, revise the BOM, and pause production.

Here is what follows:

Figure 1. The cycle of upstream impact resulting from product changes.

It is more complicated if an entire new style is added that didn’t previously exist, in a new color, with a new print and a new trim!

Impact on vendors

There is sufficient evidence demonstrating that last minute assortment moves propagate into suppliers as production volatility.

First, there are no guardrails on the number of developments, samples, or prototypes that the brand can request. In theory, the brand has free reign to make as many edits as it wishes and the vendor has to follow along. Next, as the vendor becomes inundated with requests and discarded developments, resources are spent on developments that never see the light of day. As such, vendors sit on mounds of sampling waste affiliated with dropped styles.

If the vendor is already at capacity with production orders and new work hits the floor, the vendor will outsource the work to meet the deadline. Textile mills are known to borrow capacity from subcontractor mills which may or may not be up to par when it comes to working conditions and operational performance. In an industry that needs visibility, these are the outcomes that run counter to that need.

Further, the assumption here is that the vendor foots the bill for all of this development work. Which is true. However, at the end of the season, they will charge the brand. The cost will be a line item hidden in chargebacks that the merchant who triggered the changes never sees.

Benefits of Better Decision Making

As stated in previous articles, we are strong proponents of process innovation. The siloed structure common in retail and brand organizations is the biggest hindrance towards such innovation. Different functions often lack visibility into how their decisions affect other teams internally. Unsurprisingly, this lack of alignment and visibility extends to external partners, as discussed above.

If we can better understand how product decisions affect stakeholders across the supply chain, we might choose better. Putting merchant actions into a greater context might be an important step forward in strengthening brand–vendor relationships. Further, this will help address the root causes of unnecessary physical sampling and overdevelopment, both chronically wasteful and persistent issues. As such, sustainability becomes a true and tangible outcome as opposed to a virtue to signal. Further, without delivery delays, we can extend the in-market selling window, which positively impacts full-price sales.

Best of all, this smashing of silos confers these benefits with minimal capital investment and without the added pressure of having to sell more.

Conclusion

The debate about the future of merchandising will continue, but one thing is clear: merchants need to understand the upstream impact of their choices. Assortment decisions don’t happen in isolation. Instead, they trigger a domino effect that ripples through suppliers with real consequences. Too often, those effects are overlooked and quietly generate hidden damage. As the apparel industry pushes ahead, it’s worth glancing in the rearview mirror. Paradoxically, the best way forward may start by looking back.

Liza Amlani and Raj Dhiman, PhD are Co-founders of Retail Strategy Group. They work with market-leading brands to achieve dramatic growth and increased profitability. Liza and Raj discuss process innovation in greater detail in their book The Material Life – Process Innovation for Retailers and Brands published by Routledge/Productivity Press which is available now. Learn more at www.retailstrategygroup.com.