Europe#;s fashion retailers could double their profits within four to five years by implementing e-commerce strategies with their suppliers, according to a new report from Internet Capital Group Europe (ICG Europe).

According to ICG Europe, the Euro 335bn fashion market is comparable in size with the US market but, with a few exceptions, it lags the US in the uptake of e-procurement.

The report, “The impact of the Internet on the European fashion market”, argues that those retailers who move first will be the biggest winners. This is because first movers will be able to generate efficiencies and cost savings ahead of their peers, whilst at the same time ensuring that they are better able to respond to customer tastes. Better inventory management and customer responsiveness will in turn drive revenues.

The report explains that  “Affordable Internet-based e-commerce solutions are available today, offering European retailers and manufacturers huge benefits. Historical inefficiencies are costly; they cause long lead times and so massive over-or-under-stocking. By using e-commerce, retailers really do have the opportunity to improve margins and make a huge impact on their profitability. Those companies that fail to respond will see their profits disappear - permanently.”

ICG Europe believes that existing inefficiencies will combine with increasing competitive pressures to make the move to e-commerce inevitable. Pressures on margins are converging with changing business conditions, such as the lowering of EU barriers to trade, the movement of sourcing and manufacturing to the cheapest regions, higher sales of “own-brand” goods and accelerating fashion cycles.

However, the ICG Europe study cautions that the industrywide benefits of e-procurement can only be enjoyed with the emergence of open, Internet-based standards, capable of supporting the ready exchange of data between retailers and manufacturers. The first retailers to use B2B e-commerce effectively will be able to leverage this opportunity to expand faster and more profitably than the rest of the market.

Commenting on the report#;s findings, Tex Yard co-founder Brent Dennison said: “The implications of the Internet revolution are huge. Everyone who participates in the fashion industry, from manufacturer to retailer, can use Internet-based sourcing solutions to positively influence profitability and increase transparency, integration, and flexibility. We expect the major players – for whom the advantages run to many millions of dollars in increased profit – to be instrumental in driving this through the entire apparel chain.”

 About Internet Capital Group

Internet Capital Group (ICG) is an Internet company actively engaged in business-to-business e-commerce through a network of partner companies. It provides operational assistance, capital support, industry expertise, and a strategic network of business relationships intended to maximize the long-term market potential of more than 70 business-to-business e-commerce companies around the globe. Internet Capital Group is headquartered in Wayne, Pa. and has European offices in London, Munich, and Paris.

 About TexYard

TexYard is Europe#;s leading online sourcing solution for the apparel industry. It helps bring leading clothing retailers and their suppliers together by creating a simple and efficient process for managing the entire procurement process online: sourcing, order tracking, collaborative design, matchmaking and purchasing.