Navigating cost and margin pressures in fashion and retail: Insights from Hitachi Solutions and K3

Hitachi Solutions and K3 are excited to announce their partnership through an insightful interview with Jason Colbridge, Retail and Distribution Lead at Hitachi Solutions.

The discussion explored Hitachi Solutions’ journey into the fashion industry, current challenges for brands, and the future of retail. Here’s a summary of the conversation:

Hitachi Solutions’ journey into fashion and retail

Hitachi Solutions’ Jason Colbridge’s career in omnichannel retail spans over two decades, beginning with cataloguers and pure-play eCommerce businesses. His expertise includes consulting on payment gateways, marketplace and eCommerce integration, and cross-border distribution, working with rapidly growing retailers like Space NK, Hotel Chocolat, Aspinal of London, and Joe Browns.

In 2020, Jason joined Hitachi Solutions to lead its retail practice, focusing on the Microsoft tech stack. As a global implementation partner for Microsoft, Hitachi Solutions has more than 3,000 professionals worldwide skilled in managing complex, multi-national projects that require compliance with local laws and regulations.

Hitachi Solutions’ first major success in the fashion and retail market was with Dr. Martens, implementing one of the first true cloud-based Microsoft Dynamics solutions for a global retailer. Under Jason’s guidance, Hitachi has secured additional clients like Fenwick and End Clothing, both benefiting from significant improvements in supply chain management through the Microsoft tech stack.

Hitachi’s successes highlight its capability to handle large-scale implementations. To further enhance its offerings, it partnered with K3, a Global Independent Software Vendor (GISV).

“Our expertise in the Microsoft world, paired with K3’s intimate knowledge of the fashion sector, makes us a powerhouse duo capable of guiding brands and retailers through transformation projects,” Jason explained.

Leveraging technology to reduce overheads amidst market turmoil

The current business landscape remains challenging for brands and retailers due to economic and supply chain pressures. Jason noted:

“Retailers often struggle with true margin visibility. We help them understand their supply chains and costs through the new Microsoft Fabric platform or better ERP usage. Tough conditions demand tech that delivers tangible value.”

Global events, inflation, and adverse weather in the UK in early 2024 have created a steady stream of challenges. Issues range from the affordability of prime high street locations to overstocking or stockouts impacting profits. The right technology is essential to keep costs in check while offering the convenience and choice customers demand.

Hitachi Solutions has supported businesses by transitioning them from legacy solutions to the cloud, ensuring they leverage the Microsoft platform’s benefits without excessive customization. Hitachi Solutions’ experience in data migration, testing, and localization also helps reduce project risk.

The partnership with K3 adds further value, as K3’s solutions are natively embedded within the Microsoft Dynamics 365 technical infrastructure, reducing cost and complexity.

Maximizing inventory and meeting customer demands

Maximizing existing resources is crucial for brands and retailers to reduce costs. Optimizing inventory ensures profitability and cash flow. Solutions like K3 Fashion offer comprehensive inventory and channel management capabilities, ensuring the right products are available at the right time and place to maximize throughput.

Understanding customers’ needs is another critical area. Convenience and choice are paramount; customers want to shop on their terms. Businesses need the right solutions to facilitate an omnichannel shopping experience, which can generate additional revenue if implemented correctly and depends on optimized inventory.

“Optimizing inventory and delivering a seamless journey relies on all areas of the retail business working harmoniously with effective systems in place,” Jason explained. “This involves processes, people, and technology. The partnership between K3, Microsoft, and Hitachi addresses this need.”

Jason also emphasized the growing importance of robust product information management:

“The need to capture product information has grown due to multiple sales channels, overseas order fulfilment, and sustainability needs. K3’s product information capabilities are powerful in fulfilling these requirements.”

Adaptability and flexibility are key

Looking ahead, the fashion and retail industry is poised for significant changes. Despite earlier predictions of the high street’s decline, demand remains strong for physical shopping spaces. Retail parks and experiential destinations like Bicester Village and McArthurGlen are thriving, offering relief to brands struggling on the high street.

Fashion retailers must adapt quickly, leveraging technology to stay resilient and flexible. Brands like M&S, which have embraced change and innovation, are thriving by offering collections from other brands and maintaining competitiveness.

“The ability to pivot and maintain robust supply chains is crucial,” Jason noted. “Retailers that haven’t stayed current are struggling, while those that have adapted are seeing strong sales.”

Robust, fashion-focused ERP platforms are vital for managing supply chains and offer a competitive edge. K3 Fashion, for instance, uses AI to automate and streamline processes, allowing brands to focus on strategic and creative endeavors.

If you’d like to learn more about how Hitachi Solutions and K3 can support your business, feel free to reach out today.