Fashion Logistics for Tax-Free Weekends

fashion-logistics-tax-free.jpgLast weekend was tax-free weekend in Texas. For three days, purchases of many back-to-school essentials such as clothes, shoes or school supplies costing less than $100 did not have Texas’ usual 8.25 percent sales tax tacked on. According to the Austin American-Statesman, the tax holiday saved shoppers some $64.8 million this weekend.

Texas, of course, isn’t the only state to stage occasional tax holidays. In total, more than 20 states scattered across America do similar events — for good reasons. Beyond helping families stretch their paychecks during tough economic times, tax-free weekend is also reliably one of the best shopping windows of the year for apparel companies and retailers.

One of the biggest challenges in fashion logistics is the way rapidly shifting consumer tastes makes it difficult for apparel companies to design, manufacture and deliver products fast enough. These days, the challenge is compounded by consumers’ increasing web-savvy that makes finding spot deals and bargains in far-flung corners of the Internet.

In this environment, the annual spike in sales during back-to-school season — especially in states with tax holidays — can be welcome relief. It's predictable. It allows retailers to attract customers without sacrificing profitability. It dominates production schedules of retailers far and wide.

But it's also a short window. Miss it — whether because your garments got stuck in customs or because the apparel warehouse you used lacked modern pick/pack/replenishment services — and you'll miss out on heavy sales and an enormous opportunity to set trends for the rest of the school year. Furthermore, while tax holidays do generate a significant amount of sales that likely wouldn’t exist otherwise (i.e. some families will use their tax savings to buy more clothes), tax holidays also steal sales from other weekends, increasing the consequences of failing to capitalize on it.

In other words, speed-to-market is still critical. And top-quality apparel supply chain management is key to making sure your garments are in front of shoppers at exactly the right times.

Posted: 8/27/2012 12:30:11 PM by Global Administrator | with 0 comments

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