A further trend that fashion e-commerce logistics is seeing is SKU proliferation. This phenomenon, generated by a high demand for specific products and fast order fulfilment, both helps and hinders operations for fashion logistics providers. As companies cater to customer preferences, they create new product varieties and new SKU numbers to identify different types of the same kind of product.
While consumers enjoy the variety in product lines, SKU proliferation impacts fashion logistics facilities in a number of ways:
- Increased carrying costs: More shelf space and labour is needed to accommodate more products being offered to customers.
- Accuracy in picking: Smaller quantities of similar-looking products in greater numbers and denser locations means there’s a higher risk of errors, resulting in costly returns and lost income.
- Efficiency in picking: Individual products are more spread out on the warehouse floor, meaning it takes longer to pick full orders.
But there is also a new development emerging which is actually reducing SKU proliferation. Rather than just making as many variations as possible, retailers are starting to ask more questions. What would be appealing to the customer? What does that person actually want?
This is producing a much more restrained approach, with production of one targeted product, instead of several less targeted ones. Furthermore, manufacturers are now recognising that 80 percent of sales are made from “core products”, and that less space on the shelves for these products negatively impacts sales.