Breaking the retail Silos: Unified Commerce & AI Fit Solutions as a Sustainability Enabler.

Understanding the Problem: The Cost of Silos

Siloed operations fragment customer data, inventory management, and logistics across multiple, often incompatible systems. This fragmentation leads to significant inefficiencies: unsold stock, redundant logistics, increased returns, and ultimately higher environmental impact.

Traditional retail models often handle e-commerce, physical stores, and logistics independently, causing stock visibility issues. Inventory sitting unsold in warehouses, while simultaneously running shortages in popular sizes at retail stores, is a common scenario in such fragmented environments. Moreover, customer frustration grows when experiences differ significantly across channels.

According to industry research, nearly half of online shoppers abandon their shopping carts due to uncertainty about product availability or fit, and 7 in 10 consumers frequently return products due to sizing mismatches Bold Metrics Inc.. This operational inefficiency isn't merely costly; it's environmentally unsustainable.

What is Unified Commerce?

Unified commerce represents the next evolution beyond omnichannel retail. It integrates all consumer touchpoints physical stores, e-commerce, mobile, and social into a single, seamless operational ecosystem. Unlike traditional omnichannel approaches, unified commerce centralises data and ensures real-time synchronisation of inventory, customer interactions, and logistics says Martin Newman in his recent white paper in conjunction with Manhattan Associates.

Unified commerce eradicates operational silos, thereby enabling streamlined inventory management, accurate forecasting, and agile responsiveness to consumer behaviour. It provides a unified view of customer interactions and purchasing habits, empowering retailers to deliver personalised experiences while significantly reducing overstock, returns, and associated logistical emissions.

The Operational and Environmental Impact of Unified Commerce

Implementing unified commerce not only enhances customer experience but also profoundly impacts sustainability. Here are some measurable impacts of adopting a unified commerce strategy:

Real-time Inventory Visibility

Real-time inventory visibility across all channels drastically reduces unnecessary production and transportation emissions. Retailers can respond promptly to actual demand, reallocating stock from low-performing locations to high-performing ones without producing excess inventory.

According to Manhattan Associates, unified commerce strategies have led to up to 35% increases in point-of-sale throughput and significantly reduced delivery times 23 hours compared to the industry average of 3.3 days. This rapid turnover means less warehouse storage, fewer markdowns, and reduced waste.

Significant Reduction in Returns

One of the largest environmental impacts in fashion retail arises from high return rates often exceeding 30%. Unified commerce systems, coupled with advanced fit technology, significantly reduce these rates.

Bold Metrics Inc. notes that brands leveraging their AI-driven fit tools, such as Pact and Mizzen+Main, saw return rates drop by an average of 32%. Such reductions mean fewer products are unnecessarily shipped back and forth, greatly reducing transport-related emissions.

Enhanced Customer Personalisation and Satisfaction

Unified commerce integrates customer data across platforms, allowing highly personalised experiences and accurate fit recommendations. Mizzen+Main, for example, implemented a unified strategy alongside AI fit solutions, seeing their conversion rates soar by 257%, with average order values rising by 30%. Burton Snowboards reported double-digit percentage increases in repeat customer orders due to improved fit accuracy and confidence.

These improved metrics don't just reflect higher profits they demonstrate an alignment of products with consumer needs, drastically cutting waste through unsold or returned products.

Case Studies: Unified Commerce in Action

Zara: Pioneering Rapid Responsiveness

ZARA SA, part of Inditex, exemplifies unified commerce with its rapid replenishment and localised production model. Zara’s advanced integrated system allows the company to respond swiftly to consumer purchasing patterns, producing smaller batches and significantly cutting excess stock and waste. Real-time data insights enable rapid adjustments in production and inventory allocation, thereby minimising unsold inventory and associated markdowns.

Zara's implementation of unified inventory visibility across physical and digital channels enables streamlined returns processing, cutting down unnecessary transportation and emissions.

Zara’s integrated system highlights how unified commerce can drive both sustainability and profitability, reducing waste through agility and responsiveness.

Marks and Spencer (M&S): Leveraging Data for Sustainability

M&S’s well-known 'Plan A' initiative aims at comprehensive sustainability, integrating environmental responsibility into every operational layer. Unified commerce is pivotal in this strategy, with M&S harnessing customer insights from its loyalty programs to optimise product offerings and minimise returns.

By unifying inventory visibility and customer data, M&S efficiently manages cross-channel returns and ensures stock is promptly reshelved or reallocated rather than languishing in return warehouses. This operational precision not only enhances sustainability but also customer satisfaction, demonstrating genuine alignment between rhetoric and reality.

TFG: Harnessing Unified Strategies Across Brands

TFG (The Foschini Group) (TFG), managing multiple fashion and lifestyle brands, should be benefitting significantly from unified commerce, but their not. With diverse brands and markets, operational efficiency through unified data integration is crucial. TFG’s strategic investments in unified commerce technology allow accurate demand forecasting, precise inventory management, and efficient logistics across its extensive global operations.

A unified strategy enables TFG to capitalise on customer data insights across its brand portfolio, optimising product design and reducing returns. Even modest improvements in returns reduction (e.g., a 5% decrease across their scale) would translate into substantial environmental benefits and reduced operational costs.

LC Waikiki: Global Expansion with Unified Data

LC Waikiki, expanding rapidly into diverse global markets, illustrates how unified commerce facilitates sustainability even during aggressive growth. Unified data systems would help LC Waikiki adapt to local consumer preferences and sizing standards, reducing returns and associated logistical impacts.

Implementing a unified commerce system with integrated AI-driven sizing tools could further enhance LC Waikiki’s sustainability and profitability, reducing fit-related returns while ensuring products are precisely matched to customer demands in varied international markets.

Quantifying the Benefits: Unified Commerce vs Siloed Operations

Companies implementing unified commerce typically experience measurable improvements over their siloed counterparts:

• Conversion Rates: Unified commerce adopters often see conversion rate improvements of 20% to 250%, directly correlating with reduced uncertainty and enhanced consumer confidence.
• Return Rates: Brands like Pact, Mizzen+Main, and Burton, employing integrated sizing and unified commerce systems, report average reductions in return rates by approximately 32%, translating directly into environmental and economic gains.
• Inventory Efficiency: Real-time inventory visibility and unified management enable retailers like Zara and M&S to reduce unsold inventory by upwards of 25% compared to fragmented operations, significantly minimising waste and markdowns.
• Operational Efficiency: Manhattan Associates notes that unified systems can improve operational efficiency by eliminating redundant logistics, reducing stockouts, and enhancing order fulfilment accuracy.

Conclusion: The Path Forward

Unified commerce represents more than operational efficiency it embodies a fundamental shift toward genuine sustainability in fashion retail. By breaking operational silos, integrating customer data, and enabling agile, data-driven decision-making, retailers can significantly reduce their environmental footprint.

Fashion executives and sustainability professionals must recognise unified commerce not merely as an operational upgrade but as an essential sustainability strategy. It is imperative that the industry collaborates, sharing best practices and innovative solutions to overcome existing blockers and fully realise unified commerce's potential.

Ultimately, unified commerce empowers retailers to move beyond sustainability rhetoric, achieving tangible, measurable improvements in both environmental impact and customer satisfaction. The transition from siloed to unified systems is no longer optional it’s a necessary evolution toward a genuinely sustainable, customer-centric future in retail.

Conclusion: The fashion industry is at a crossroads. The easy wins of swapping out fabrics or donating a portion of proceeds to environmental causes are done – and they’re not enough. The harder work is looking inward at operational practices like sizing, production, and returns. It’s time to remove the mask and address the not-so-glamorous side of sustainability. The good news is, doing so not only helps the planet but also delights customers and improves the bottom line. Authenticity in sustainability means you don’t say one thing and do another; you align your entire business to sustainable principles. For fashion, that alignment starts with understanding and serving customers better through data – making sure they get the right product, in the right size, at the right time, with minimal waste in the process.

Let’s learn from Pact’s, Mizzen+Main’s, and Burton’s innovations, and also heed the cautionary tales of those struggling with returns despite green marketing. By embracing a unified, customer-centric approach breaking down silos, leveraging technology like AI fit tools, and continuously feeding insights back into the business fashion retailers can truly transform.

They can go from simply wearing the sustainability mask to actually living and breathing sustainability in their operations.

Siloed operations fragment customer data, inventory management, and logistics across multiple, often incompatible systems. This fragmentation leads to significant inefficiencies: unsold stock, redundant logistics, increased returns, and ultimately higher environmental impact.

Traditional retail models often handle e-commerce, physical stores, and logistics independently, causing stock visibility issues. Inventory sitting unsold in warehouses, while simultaneously running shortages in popular sizes at retail stores, is a common scenario in such fragmented environments. Moreover, customer frustration grows when experiences differ significantly across channels.

According to industry research, nearly half of online shoppers abandon their shopping carts due to uncertainty about product availability or fit, and 7 in 10 consumers frequently return products due to sizing mismatches Bold Metrics Inc.. This operational inefficiency isn't merely costly; it's environmentally unsustainable.