Hanger=”” on=””>“To hang or to box” is a question that has long been debated within the fashion retail supply chain. With companies now emerging from the coronavirus pandemic looking to reconfigure their supply chains to withstand future disruptions, the way garments are moved from factory to consumer is a critical consideration as the industry pivots to a digital future – Roit Kathiala decodes.

As companies emerge from the coronavirus crisis into the new normal, among the lessons learnt will be the need for increased scrutiny of their supply chains. One of the most significant impacts will be the importance of well-functioning supply chains that can withstand disruptions from the factory to the customer. In fact, this is the lifeline of any business.

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However, building a supply chain network can be a daunting task – and more so in fashion due to one of the largest global footprints and the high number of variables that need to be factored into decision making.

A key decision is how the garments are moved through the supply chain. This is important, not just because configuring the supply chain from vendor warehouses to containers to distribution centres (DCs) through to stores is a large capital commitment, but it also impacts the company’s core operations, its cost structure, speed to serve its customers and its sustainability footprint – for years to come.

A Garment on Hanger (GOH) supply chain is one such decision, and refers to a supply chain designed from vendor to store to move apparel completely or in part on hangers. In certain cases, these garments may be placed in a carton or a box while attached to a hanger, instead of hanging on a rail or strings through its journey.

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To move garments flat-packed or GOH through supply chains is a question that has long been debated by fashion companies. A few factors justify this conversation. They are:

  • Garments on hangers are increasingly popular amongst store merchandising teams and, in the experience of many retailers, make it easier to present products to customers and consequently drive better sales than shelf-stacked items.
  • In-store labour cost is one of the most expensive touch points within the fashion supply chain. If the garments arrive already on hangers, this minimises any in-store preparation needed and offers a cost-saving that also improves the efficiency of the store. 
  • For a lot of products, having garments on hangers reduces crushing in transit – which is especially important for tailored or other items that need specialised finishing machines that are not easily available in DCs or stores.
  • Within the distribution centres, garments on hangers can be put through steam tunnels and automatic bagging (including bulk bagging) before being allocated to stores with minimal labour cost and reduced packaging (such as boxes and individual polybags) making it more sustainable.
  • An increasing number of modern factories use conveyor belt assembly lines where garments are assembled, finished and stored on hangers to preserve optimal finishing. It is efficient for the garment rails to be connected to lorries to move to the DC and then offloaded via jet rails into the DC, and moved via conveyors to a storage area. Adding GOH storage to existing boxed storage areas has helped many DCs improve storage density by better utilising their high open spaces.
  • There are some interesting new digital innovations emerging around integrating RFID and sensor technology within the hangers that not only traces the movement of a garment through the supply chain, but also trigger in-store display monitors – so the moment an item on a hanger is picked by a customer it triggers a nearby monitor to play pictures or videos of models and celebrities wearing that product. 

However, despite the convenience of one end-to-end form across the supply chain, as well as reduced packaging waste, in-store cost savings and other efficiencies, decisions to include the GOH infrastructure within a supply chain must be weighed up carefully – and even more so in the post-Covid-19 world.

Traditionally the factors involved in making this decision are:

How are the garments going to sell? The split between garments being sold as hanging versus laid flat on shelves or tables. The higher the percentage of goods being sold as hanging, the higher the incentive to invest in a hanging supply chain.

‘Finish sensitivity’ of the garments being sold: If the garments are packed in cartons, they can be crushed and frequently require refinishing before being displayed in the store. For optimum finish and hanger appeal, with the least refinishing at the final destination, hangers offer a low-cost and efficient solution for moving garments within the supply chain.

‘Product sensitivity’ of the garments being sold: Consideration must be given to the uniqueness of each product and how either the fabric or the construction will be impacted by moving it thousands of miles on a hanger. For example, will a heavy knit sweater elongate in size, or will the edge of a hanger rupture a fine silk fabric?

Shipping mode: It is a lot more cost effective to ship garments on hangers via sea compared to air freight, where the increased volume will disproportionately raise air freight costs.

What are the origins and destinations? Are the factories capable of loading goods into GOH units? Can your 3PL (third party logistics) partner handle GOH products at every country of origin and country of destination – where your stores/DCs are located? Can the stores manage GOH units (that is, receive, display, sell?).

Type of hangers used: The type and quality of hangers used to display garments in-store also has practical ramifications. Re-using the hangers by shipping them back internationally to the countries of origin where the garment factories are located is a painstaking task that requires navigating customs rules and import duties in each country – and that’s if it is even possible.

An efficient GOH supply chain can be hampered by the constraints around building circularity/re-use of the hangers, and also the high amount of damage that can occur to expensive and luxurious hangers in reuse and transit. Using two hangers – one for transit and one for in-store sales at destination – reduces the benefits of building a low touch GOH supply chain.

Against this backdrop, companies also need to layer on shifts in the marketplace that can impact the return on their return investment (ROI) calculations:

  • Increased share of e-commerce: The last mile delivery in e-commerce will not be cost effective for most garments – some high value and finish-sensitive products being the exception.
  • Less store density: Stores become showrooms with e-commerce taking a larger proportion of total sales.
  • Sustainability: Throwaway hangers and polybags drag down sustainability efforts, but this can be weighed with the fact that a GOH supply chain does not use cardboard boxes.
  • An increased focus on health and safety following the coronavirus pandemic could also influence the use of hangers – at least in the short term. Research suggests the virus can stay active on hard, shiny materials like plastic for 72 hours (compared with 24 hours for soft, porous surfaces like fabric). Which may mean either finding some way of quarantining or disinfecting them until any trace of virus is gone, or immediate safe disposal. That said, supply chain infrastructures last years, and if modern day medical research can be relied upon, the pandemic will be here only months. In addition, where the hangers are moved through the supply chain (GOH) or added in stores, the additional risk of a GOH supply chain to the customer is minimal. This is unlikely to reverse the advantage of customers seeing the full garment in view before purchase – so-called “hanger appeal.”

As we talk about disruption in fashion and retail it is important to bear in mind this is not the first time the fashion industry or any other industry has been disrupted. Some companies that can’t adapt cease to exist and many newer ones emerge. However almost every company that remains is better – it operates better, serves customers better – and these times will be no different.

The only common thread that links the winners will be the manic focus on serving their customers better, and thinking and building their supply chains with a long-term focus despite short-term challenges.

Roit Kathiala has led the product and supply chain teams of leading fashion companies in Europe, Asia and North America and advises companies on their product, supply chain and digital strategies. Click here to read other articles he has written for just-style.