SUPPLY CHAIN
Assuring Supply Chain Traceability to Protect Profits via RFID technology T
By Antonio Rizzi, Vice President of Murata ID Solutions
he fashion business generates an astonishing $1.7 trillion worth of revenue each year, according to figures from analyst firm Statista. Overall, with textile manufacture, garment production, right through to shipment and retail being covered by this, it is estimated to be responsible for somewhere in the region of 430 million jobs; this is 12% of the total global workforce. Nevertheless, there are major challenges that it will face in the years ahead and ways must be found to overcome them.
Among the issues that need to be addressed are the growing prevalence of counterfeiting and the influence that the ‘grey market’ is now exerting. Both of these present serious threats to fashion brands’ profitability and brand value. The widespread adoption of advanced technology will therefore be
required, in order to enable greater supply chain traceability and transparency.
Quantifying the impact
Counterfeiting is recognised as causing huge harm to the fashion brands, but few realise how big a problem it actually is. Analyst firm Statista estimates that the global clothing industry loses around Euro 26 billion worth of revenues each year because of it. There is not only the financial impact to consider though, as having the market flooded with counterfeit goods can also be damaging to the reputation that a brand has built up too. A report from the EU states that approximately 9.7% of sales from the clothing, footwear, and accessories sector are snatched away by fake products.
The grey market is, likewise, highly
problematic. Unlike counterfeiting, it relies on genuine products, fashion brands’ profit margins are still being eroded by this practice. Through the grey market, online retailers are able to make use of the pricing variation in items of apparel across different geographic regions. They then ship these items to places that they were not originally intended for, and where their price is a lot higher, so they can sell them at substantially discounted rate. All this is done without the manufacturer’s knowledge or their authorisation.
What can be done about all this? If they are to successfully combat the issues arising from the grey market and presence of counterfeit goods, fashion companies need better visibility of how their products are distributed. The industry has tended
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FEBRUARY 2024 | ELECTRONICS FOR ENGINEERS
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