After reaching $280 billion in revenue in 2015, the global personal luxury goods market is on track to hit $310-$327 billion in revenues for 2016 and grow by 2-3 percent annually, according to research firm Bain & Company. The firm’s most recent Luxury Goods Worldwide Market Study found that the personal luxury goods market—which includes leather accessories, fashion, hard luxury, fragrances, and cosmetics—had more than tripled its growth in 2015, compared to the previous 20 years.
Boosted by a strong dollar, the Americas emerged as the biggest global region for personal luxury goods purchases last year, with the U.S. alone accounting for $88 billion (more than 90%) of the total regional market. According to Bain & Company, New York City, Paris, and London are the largest luxury cities globally, each representing a market in excess of $11 billion.
With luxury goods purchases in New York City alone outweighing those across all of Japan, a new DB Schenker distribution hub situated just outside of the city limits is helping luxury fashion manufacturers and retailers benefit from the high consumer interest and strong sales taking place both in New York and throughout the U.S.
Tapping into the Power of a New FTZ
In October, DB Schenker completed a full warehouse modernization to better serve existing and prospective luxury brand customers. Located near New York City’s high-end fashion district, the high-security facility provides a full range of logistics services, including garment-on-hanger racking, cross-dock, and pick-and-pack inventory management. Designated as a Foreign Trade Zone or “FTZ,” the warehouse is already home to some of the most recognizable brands in the luxury fashion industry.
“From our state-of-the art gateway into the North American market,” says Donna F. Lambert, DB Schenker’s VM Head Consumer and Retail, Region Americas, “we’re giving luxury apparel makers, distributors, and retailers the innovative, value-added solutions they need to be able to get their products to market quickly, securely, and in a very cost-effective manner.”
5 Reasons Luxury Goods Retailers Are Rethinking Their Distribution Strategy
With storage for up to 300,000 items, a menu of different fulfillment options, Customs and Free Trade Zone services, and a state-of-the-art warehouse management system (WMS), DB Schenker’s new luxury garment facility provides the speed, control, and visibility that companies need in today’s competitive marketplace. Here are five reasons retailers are making this facility an integral part of their logistics portfolio:
1) Location, location, location. Situated in close proximity to New York’s high-end, luxury market, DB Schenker’s Kearny distribution center fills an important need for companies that want to bridge the “last mile” to their final distribution points. Whether that means unpacking garments and putting them on hangers, picking and packing orders, and/or cross-docking, the state-of-the-art facility can handle all of that…and more. “Retail and fashion are growing markets, and particularly in the luxury and high-end side,” says Lambert. “We want to help customers more effectively tap into this growth, and felt that this new facility was a great way to achieve that goal.”
2) E-commerce fulfillment and distribution. Increasingly, more consumers are buying luxury products online and they want those products delivered quickly and cost effectively. DB Schenker’s Kearny facility is optimized for the growing e-commerce market for luxury products. “Our goal is to provide end-to-end solutions that help customers overcome the challenges of the luxury market,” says Lambert, “including seasonal demand/volume fluctuations, e-commerce, customization, omni-channel retailing, and returns management.” As a 24/7/365 operation, the facility also provides a high level of security, helps minimize lead times, and offers other services that help companies effectively address the needs of their discerning, luxury consumers.
3) East Coast Foreign Trade Zone. Defined as geographic areas where goods may be landed, handled, manufactured, or reconfigured, and then re-exported with less complex intervention of the customs authorities, FTZs allow companies to minimize or eliminate costly duties and fees associated with the standard import process. DB Schenker’s new facility lets luxury goods makers optimize and implement FTZ-related savings while also freeing up internal resources to focus on more important matters. “We can cross-dock, pick-and-pull, and put garments on hangers,” says Kim Taylor, DB Schenker’s Director, FTZ Services, “all within the FTZ environment.”
4) Reduced import and Customs fees. By consolidating goods onto a single weekly entry for items moved to domestic customers, for example, users will benefit from faster movement from port to the FTZ and the elimination of Customs clearance requirements (e.g., those that would be incurred before goods are moved into the FTZ). “This will allow companies to delay payment of duties on high-value and high-duty-rate materials,” Taylor says, “while also reducing merchandise processing and government fees.”
5) Makes life easier for valued retailers. Cramped for space, many urban retailers simply don’t have the space required to unpack boxes and set up merchandise for sale. DB Schenker’s Kearny facility provides a full range of store-ready services that ensure retailers receive the warehouse-dispatched goods in the format that works best for them. “Retailers don’t have to worry about unpacking and keeping the trash in their boutiques all day or even overnight,” says Lambert. “We help alleviate these issues by delivering store-ready goods that can be rolled right out onto the retail floor.”
To find out more about DB Schenker’s logistics services tailored to the retail industry, visit our website or call +1 (347) 276-9038