Improvement of Store Operations in the fast fashion industry : A case study of how a leading fashion retailer can adapt to transformations coming from growing efficiency requirements and rapidly changing technology

Abstract: In the last few decades, new vertically integrated players have appeared in the fashion industry providing their customers with lower prices and an increased number of seasons per year. In this context, the need for high efficiency levels among the fast fashion retailers appears as a necessity to survive. Since the area of Store Operations (SO) is directly dealing with processes at the end of the supply chain, boosting revenues through the increased efficiency and incorporation of new technologies in this area becomes critical. In order to accomplish that in a long-term perspective, this must be done while improving staff working conditions, customer experience in the stores and with more cost effective practices. Therefore, this study investigated how established fast fashion retailers can improve their Store Operations in pursuance of coping with growing efficiency requirements and rapidly changing technology in their stores. This has been done by conducting a case study at one of the biggest fast fashion retailers in the world. The research involved 42 different interviews with the case company’s employees and industry experts in the store solutions field, which allowed collecting both qualitative and quantitative data. Moreover, in order to analyze empirical findings obtained during the research process, outsourcing theories, including transactional cost theory (TCT) and resource-based view theory (RBV) as well as innovation theories, including diffusion of innovation and radio frequency identification (RFID) adoption theories, were used. The results indicate that in order to improve their Store Operations, the case company should first work on five areas, which include: (1) stockroom processes, (2) technology and innovation, (3) alarm systems, (4) employee morale, and (5) customer service. At the same time, it was discovered that the solutions that can improve all of these areas are: RFID that act as a security device and the outsourcing of stockroom process, known as Golden Delivery. In order to make the implementation of these two solutions successful, separate implementation guidelines must be created, both of which are presented in this document. The findings of this study have implications on both sustainability and research. This investigation contributes to the literature by giving a better understanding of the operational activities performed in the store environment of fast fashion retailers as well as the link between them and the rest of the supply chain. Moreover, the efficiency solutions presented in this document give fashion retailers a sustainable economic advantage achieved through cost savings and increased business performance, as well as, the motivation to focus on social and environmental aspects related to these practices.