Your 20-second brief:

• Fashion SMEs face challenges such as budget constraints, data limitations, and outdated technology infrastructure, making it difficult to compete with luxury and fast fashion brands.
  
  
• Digital transformation through cloud, data, and automation helps SMEs improve efficiency, gain real-time insights, and scale operations in a competitive fashion landscape.
  
  
• Ready2Wear, built on Infor CloudSuite Fashion, provides a faster, cost-effective way to modernize operations. With industry-specific accelerators and extensions.

Chic Gaia, a small to medium-sized fashion brand (fashion SME), is in a tricky position. There are luxury competitors who have the advantage of established brand prestige, perceived value, and premium prices. In contrast, Chic Gaia relies on price-sensitive consumers looking for unique items. Because the brand prioritizes quality and craftsmanship, production cycles are naturally longer. For these reasons, they also face tough competition from fast fashion brands, with their up-to-date styles and speedy time-to-market.

Fortunately, Chic Gaia (like some fashion SMEs) has good sustainability credentials. This forms a core part of their brand identity, essential for customer retention and growing popularity. Among the positive developments for the brand are  62% of Gen Zs (a core consumer base) preferring sustainable brands and inflation creating growth opportunities for SME brands as consumers opt for well-made, sustainable items over fast fashion.

Chic Gaia must transform their business by leveraging the latest digital technologies. Brands such as these must scale production to respond to growing order volume, contend with supply chain issues, and increase revenue to fund innovative projects. In this blog, we explore how digital transformation can help fashion SMEs navigate key challenges and remain relevant in today’s competitive landscape.

The challenges faced by small to medium fashion brands

• Budget constraints and ROI concerns

Fashion SME brands, like other SMEs, are grappling with decreasing profit margins due to the volatility of the market. Unlike luxury and fast fashion brands, fashion SMEs do not function on high production budgets, economies of scale, extensive supply chains, and distribution/sales networks.

Lower profit margins mean there is insufficient revenue generated to fund digital transformation initiatives. Furthermore, decision-makers in fashion are reluctant to adopt or trial new technology platforms, no matter how beneficial they will be in the long run because of ROI concerns.

• Data limitations

For small and medium-sized fashion enterprises, data limitations create major challenges—restricted supplier visibility makes it difficult to track performance, while the lack of real-time insights prevents them from anticipating logistics disruptions. Without historical data, these brands struggle to identify trends, optimize inventory, and manage stock effectively.

The absence of buyer data limits their ability to personalize shopping experiences, making it harder to meet customer expectations. Additionally, without scenario modeling, fashion SMEs cannot plan for demand fluctuations or supply chain disruptions, leaving them vulnerable to operational setbacks. Embracing digital transformation enables these retailers to harness data for agility, efficiency, and a competitive edge.

• Technology infrastructure gaps

What about fashion SMEs that have started digital transformation but struggle to utilize technology effectively? Many rely on legacy infrastructure that needs modernization to integrate with new systems, preventing them from fully realizing digital transformation’s benefits.

Technology alone isn’t a solution—it must align with business growth strategies. Successful digital transformation requires proper implementation, employee training, data-driven decision-making, and scalable infrastructure to support future technologies.

The Technology-Organization-Environment (TOE) Framework

While these challenges may appear overwhelming, fashion SMEs can approach digital transformation through the Technology-Organization-Environment (TOE) framework. This framework encompasses:

• Technology: Availability, accessibility, complexity, and relative advantages of digital solutions.
  
  
• Organization: Internal factors such as company size, communications processes, and resources.
  
  
• Environment: External factors such as industry developments, competition, and market needs.

By assessing the range of factors included in the TOE Framework, fashion SMEs have a strategy for mapping competitive technologies that align with their short-, medium-, and long-term goals. Technology solutions that fashion SMEs could explore include cloud-based platforms, centralized data and analytics platforms, and automation for successful digital transformation.

Leveraging cloud-based platforms for growth

Today, cloud-based platforms are a must for any successful digital transformation endeavor. Cloud-based platforms enable businesses to manage peak loads cost-effectively with minimal downtime, reducing the need for physical IT infrastructure. They offer the flexibility to allocate resources based on demand while fostering seamless collaboration across geographies. This enables teams to analyze data efficiently and make collective, insight-driven decisions.

How do these platforms work in fashion SMEs? Think of Ready2Wear and Vendor Portal, two tools designed by Fortude to drive the digital transformation of fashion businesses.

Ready2Wear

A comprehensive, industry-specific ERP is essential for fashion SMEs to scale, streamlining operations from design to delivery and improving productivity. However, traditional ERP solutions often require significant investment and technical expertise, making cost and effort major deterrents for SMEs.

Pre-configured solutions like Ready2Wear, built on Infor CloudSuite Fashion, offer a faster, cost-effective alternative. Designed with industry-specific accelerators and extensions, Ready2Wear supports the unique needs of clothing, footwear, and accessory brands. With Ready2Wear, SMEs can:

• Go live in 4-5 months with pre-built workflows.
  
  
• Lower implementation costs without sacrificing functionality.
  
  
• Gain end-to-end support for multi-channel operations, bulk orders, and seasonal planning.

Vendor Portal

A centralized platform integrated with Infor M3/CloudSuite, the Vendor Portal improves vendor management by eliminating manual processes (i.e., spreadsheets, emails, etc.). It also stores all needed documents and information (i.e., regulatory, purchase orders, shipping details, etc.) in one place. The Vendor Portal enables fashion SMEs to:

• Make vendor interactions more efficient and remove silos through centralized communications.
  
  
• Track logistics details and delivery updates, enhancing operations functions.
  
  
• Integrate with Infor M3/CloudSuite in real-time for automatic, accurate data transfers.
  
  
• Reduce time taken for manual, repetitive communication tasks thereby improving overall team productivity.

Data analytics: Unlocking business insights

The fashion industry, as with any industry, continues to grapple with supply chain disruptions. They deal with nearshoring, delayed investments, production cuts, and hiring challenges. There are also sustainability challenges to take into consideration – especially for fashion SMEs, whose sustainability credentials are what provide them with an edge over other brands. All these issues require comprehensive supply chain insights, which they can leverage to improve partnerships with all stakeholders – buyers, suppliers, distributors, customers, and investors.

Digital transformation in fashion retail thus needs a centralized data platform to keep abreast of these changes. With the right data and AI strategy, businesses have the capability to:

• Monitor real-time data (i.e., stock levels, sales numbers, social media sentiments, shipping information) across the supply chain for a 360-degree view.
  
  
• Anticipate disruptions, pricing fluctuations, possible shipping and delivery delays using this data and take remedial measures with contingency plans. They can even perform scenario modeling to support their decision-making.
  
  
• Make cost savings and reduce wastage with data insights, by addressing production problems and making the best use of raw materials based on their availability.
  
  
• Customize brand messaging to suit customer preferences and needs by understanding consumer sentiments over time and the factors that drive their purchasing decisions.
  
  
• Strengthen sustainability credentials by leveraging AI and blockchain-based Digital Product Passports (DPPs) for end-to-end traceability of raw material sources and regulatory compliance needs. Fashion SMEs can also make use of virtual sampling to reduce waste and source innovations such as plant-based textiles and leather for their end products.
  
  
• Pursue new revenue streams such as targeting new demographics that will be interested in your brand (i.e., the growing over-50 consumer base with disposable income).

Automation for supply chain and inventory management

Automation is equally important for fashion SMEs in their quest to stay competitive and relevant. There are established automation solutions such as Robotic Process Automation (RPA) to handle mundane, rule-based tasks and Intelligent Automation (IA) which combines AI and Machine Learning (ML) capabilities for adaptive workflows. Then there are more recent automation developments such as agentic automation that integrate Large Language Models (LLMs) and generative AI for autonomous decision-making. Whichever automation option fashion SMEs adopt, they are better placed to:

• Strengthen customer relations and provide timely support through chatbots and prioritize tickets as needed. These chatbots can be designed to offer assistance with multi-step queries too.
  
  
• Improve warehouse and inventory functions by automating repetitive, error-prone functions such as manual stock-taking for more accurate data and gain real-time insights about stock levels at any given time.
  
  
• Plan shipping and delivery routes in a dynamic manner, based on potential disruptions.
  
  
• Streamline finance functions by automating functions such as recurring invoice generation to ensure timely payments to and from various partners in the supply chain where possible.
  
  
• Save time and resources, allocating the latter for more strategic tasks such as design and research.

The future of small to medium fashion brands: Embrace digital transformation

The path forward for small to medium-sized fashion brands is clear. They must achieve tech equity to survive and thrive in today’s market conditions. Cloud-based platforms, unified data platforms, and automation provide them with the much-needed digital tools to hold their own against luxury and fast fashion competitors. Embarking on digital transformation initiatives using these technologies empower fashion SMEs to:

• Make operations more efficient
  
  
• Scale in a cost-effective manner
  
  
• Gain a 360-degree view over their supply chains
  
  
• Perform more accurate trend forecasting and support inventory management
  
  
• Reduce inefficiencies resulting from human error to improve logistics functions

Incorporating these digital technologies to realize their full benefits becomes easier with a technology partner, who works with you throughout your challenges. Whether you’re thinking about getting started with your digital transformation project or you need an expert to help you address your existing technology gaps, Fortude has the industry experience to help you. Reach out to us today to understand how we can enable you to build a resilient fashion SME.