If you operate a fashion retail business, like other retail businesses, you should use Electronic Data Interchange (EDI) to ensure everything runs smoothly. With EDI, large amounts of data can be automatically exchanged between businesses and links in the supply chain. That means you do not have to worry about doing things like writing purchase orders or printing invoices.

Basically, EDI standardises your incoming and outgoing documents and automatically translates the data.

Find out more about how EDI is used in fashion retail in the following helpful guide for beginners.

How Does EDI Work?

If you are of a certain age, you will remember the pre-internet days when retailers completed all of their business transactions via paper documents and mail. Things like orders, transaction details, invoices, shipping confirmations, and communications would be submitted on paper and shared via postal mail or fax.

That meant employees would spend valuable time entering data into systems and it would take time for different businesses, clients, and links in the supply chain to receive and process paperwork. It also meant that mistakes were likely to happen due to human error.

With EDI, such problems are eliminated. There is no longer lots of waiting around and information will always be accurate.

Users of EDI see their information sent digitally between their systems and their trading partners’ systems automatically. Both parties agree to an EDI code, so they know all of their data will port over correctly.

Take a look at this article about Electronic Data Interchange to find out how EDI works in more detail.

EDI Enables Global Connectivity

Fashion retailers connect with suppliers and other associated businesses all around the world and it is important that those retailers can get products into their stores as quickly as possible while maintaining low margins. That is where EDI can be majorly beneficial.

EDI keeps clothing manufacturing, distribution, and sales moving along efficiently because all documents associated with the process are automatically shared in a virtual format.

Almost all of the big fashion retail stores, like Target, Macy’s, and Nordstrom, require their suppliers to use EDI to conduct business. So, if you run a fashion retail business, you should use EDI too.

For example, if a unique product that you sell suddenly gets picked up by Macy’s, you will not be able to move forward in a business relationship if you do not utilise EDI.

And speaking of Macy’s, you might be interested in learning about the company’s recent announcement of its S.P.U.R Pathways multi-year funding programme.

EDI Reduces Returns

Fashion retailers also use EDI because it reduces the number of returns.

The clothing industry is notorious for a high rate of returns compared to other retail sectors due to clothing needing to fit the wearers properly. With EDI, returns can be reduced thanks to more accurate product descriptions that are processed through EDI software.

EDI can populate accurate and detailed product descriptions automatically across all channels, which means every trading partner has the correct information about each product.

EDI Improves Inventory Visibility

Another reason why so many fashion retail companies and suppliers use EDI is that it improves inventory visibility.

Business partners and suppliers are able to always see up-to-date information about stock levels, such as how many denim jackets are in stock, and view the locations for such items.

That applies to seeing inventory levels in warehouses and retail stores. It also means retailers can see supplier levels before they put orders in.

Therefore, fashion retailers can better ensure they maintain the right level of stock by utilising EDI.

If you are not currently using EDI, you should consider doing so.