“Are we all going to go vertical in the future?” was the question posed by the German trade magazine “Textilwirtschaft” in its annual forecast for 2007. The answer is unequivocal:  verticalisation in the market is on the increase.

More and more manufacturers are taking the plunge in their own monolabel stores or in the vertical management of controlled sales areas in retail.

However, the activities do not always prove as successful as one might wish. In many cases sales, productivity and results do not live up to expectations and companies wonder why the success of companies such as H&M is so difficult to replicate.

There is no lack of knowledge about what verticalisation is, but rather what it is not. In other words, the failure of verticalisation efforts can often be traced back to a series of common misconceptions about what the verticalisation of a company leads to and what conditions have to be established.

In OC&C’s verticalisation series, we explain the common misconceptions and how to avoid them. We also propose a model implementation schedule in eight parts.

Click below to download a PDF version of any topic in the series [in German only].

The Verticalisation Challenge - Strategies for Success in the Clothing Market:  An introduction and overview of the eight-part implementation process for achieving verticalisation success.

Part 1: Caught in the Complexity Trap:  The first in the series explains how and why traditional manufacturers often fall into a ‘complexity trap’, what problems result from this and how a verticalisation of the business model can be the remedy.

Part 2: The Fundamentals of Verticalisation:  Having explored the typical starting situation of many companies in Part 1, the second part shows the basic strategic principles which must be established for a vertical business model and describes the fundamentals of every successful verticalisation.

Part 3: Success can be Planned:  In the third part of our series on verticalisation, we describe the significance and successful integration of the framework planning of collections in product development. Every successful verticalisation requires a vertical product development process oriented towards shelf-space requirements.

Part 4: Processes with High Potential:  In the first three parts, the strategic and structural requirements are introduced. Part four addresses the question of how verticalisation structures and strategies can be brought to life in day-to-day business.

Part 5: The Core of Verticalisation:  In Part 4, the entry into the verticalisation of product development was discussed via the definition of vertical product development and the procurement process. The fifth part of our series deals with the very core of verticalisation - so-called market networking.

Part 6: Buyer Management:  In Part 5, we looked at the significance of integrating relevant quantitative and qualitative market information for accumulating a solid knowledge of market development, trends and consumer behaviour in the context of market networking. The sixth part is concerned with the measures and requirements for a comprehensive utilization of successful styles.

Part 7: From Holding up Clothes Hangers to becoming a System Provider:  In the penultimate part of this series of publications we focus on the new sales and distribution role model and business model. Every successful, vertical collection needs forms of co-operation and buyers who successfully distribute it.

Part 8: Building Core Retail Skills:  In the eighth and final part of the series, the concentration is on building core retail skills for controlling goods at POS. Successful verticalisation is not possible without controlling for-sale purchases and selling-off sales, as this ensures the necessary and correct flow of goods to the shelves.

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