Postponement in Fashion Retailing : A Case Study of H&M

Abstract In fashion industry, customer demand is constantly changing. One of the main reasons is due to the time of delicate fashion awareness among the consumers, which has come into larger variety and frequent assortment changes. The changing trends in fashion industry allow researchers to get into the postponement strategy as a customized operation in order to focus on quality and flexibility. In today’s fashion market the key for success is to keep an eye on and react to the customer demand. H&M is Europe’s second largest fashion retailer in terms of sales and our work will reflect on H&M supply chain particularly. We try to figure out business strategies such as mass customization and standardization, which H&M is using in their entire supplier chain and in his different processes. Keeping this view in mind, we design our research question, which is about mass customization and standardization and we try to relate these business strategies to the postponement. We try to find out the structure and implementation of these strategies in H&M supply chain with the help of our respondent answers in our proposed questionnaire. For this purpose, an electronic interview with the H&M senior merchandiser in Pakistan liaison office was carried out. The questionnaire contains different questions related to postponement strategy, customization, and standardization and other processes which are used in the supply chain of any fashion industry. The questionnaire consists of 22 major questions. Our research is purely qualitative. We include both types of the data; namely secondary and primary. Secondary data was collected from earlier studies of the literature and related theories of postponement, customization, and standardization and certain areas of fashion retailing, whereas primary data was collected through the electronic interview with Mr. Syed Naqeeb who is working in H&M liaison office as a senior merchandiser in Pakistan. After receiving the questionnaire, we have tried to highlight our research questions with the help of our proposed Frame of Reference in Chapter 2. The Frame of Reference consists of theories which will help the reader to get the clear picture of fashion retailing and the related theories. In the Analysis section, we talk about the activities of H&M and its background followed by its business concept. We define H&M SCM model and draw a figure of H&M complementarities, which we developed by the help of electronic interview. In the Conclusion part, we come to the point that customization and postponement affect fashion retailing by choosing raw material, components, and apparel accessories plus logistic management. The other aspect of our research area is standardization. After the analysis we come to know that Standardization and postponement are also used together in the supply chain of H&M, in raw material, cotton and yarn, dying, packaging and in the care instruction of labels (washing instructions)