As the largest nation and market in Southeast Asia, Indonesia possesses a promising fashion Industry, both in terms of manufacturing and retail. Data from Statista shows that revenue in the Fashion Market is projected to reach US$8.75bn in 2025. Revenue is also expected to show an annual growth rate (CAGR 2025-2029) of 2.09%, resulting in a projected market volume of US$9.51bn by 2029.

Luxury fashion, a niche but rapidly growing segment, is experiencing heightened consumer interest in urban hubs like Jakarta, Surabaya, and Bali. Rising disposable income, aspirational consumer behavior, a digital-savvy younger generation, and increasing exposure to global trends via social media are driving this surge.

However, the luxury segment faces its own unique set of challenges that require a shift from traditional operational methods to more intelligent, data-driven planning.

Key Challenges in Inventory Planning

Despite the market's promise, luxury fashion retailers in Indonesia face multiple structural and operational hurdles:

1. Inventory Risks: The Cost of Inaccuracy

In luxury fashion, every inventory decision matters. Overstocking high-value items leads to aggressive markdowns, which erode brand equity and compress already-thin margins. Yet understocking trending items risks losing full-price sales and disappointing high-value customers.

This balancing act is especially precarious in Indonesia’s evolving retail scene, where consumer preferences shift quickly and brand loyalty is still developing. With traditional tools like spreadsheets, retailers struggle to predict demand and align inventory levels with actual market behavior.

The consequences:

• Excess inventory and capital locked in unsold goods.

• High markdown rates and declining profit margins.

• Lost sales due to unavailable in-demand Stock Keeping Unit (SKU).

• A fragmented and inconsistent customer experience across channels.

2. Forecasting Gaps: A High-Stakes Guessing Game

Luxury goods are deeply seasonal, trend-driven, and sensitive to economic shifts. In Indonesia, where brand preference can be influenced by social media and celebrity culture, accurate demand forecasting is both essential and elusive.

The reality for many retailers: gut instinct, Excel-based processes, and isolated data are still the dominant tools. This outdated approach cannot keep pace with today’s need for dynamic, granular, and scenario-based forecasting.

Forecasting gaps manifest as:

• Reactive, rather than proactive planning.

• Delayed response to fashion trends or slow-moving items.

• Poor alignment between demand forecasts and supply chain planning.

• Missed opportunities in high-margin product categories.

With advanced planning platforms like Board, retailers can leverage predictive algorithms and machine learning to anticipate customer demand, even for high-ticket items, with greater precision.

3. Disconnected Planning Functions: Silos Undermine Success

In many organizations, sales, finance, and buying teams operate in silos. Each department uses different datasets, tools, and timelines—making alignment nearly impossible. These disjointed processes result in fragmented strategies, inconsistent execution, and wasted resources.

For luxury retailers, this means:

• Incoherent assortment strategies that don’t reflect customer insights.

• Budgeting misaligned with merchandising plans.

• Redundant reporting cycles that delay decision-making.

• Missed opportunities for agility in pricing, promotions, and product launches.

Enterprise Planning Software for Fashion Retail

Board’s Intelligent Planning Platform eliminates these silos by integrating financial, merchandising, and operational planning into a single source of truth. It empowers all departments to collaborate on shared goals, model “what-if” scenarios, and align execution with strategy.

🔹 Inventory Control with Precision

Board helps retailers optimize purchase quantities, size-level allocations, and replenishment based on real-time sales data and historical trends. This reduces overstocking, minimizes markdowns, and ensures the right products reach the right stores at the right time.

🔹 Predictive, Real-Time Forecasting

With built-in AI and machine learning, Board enables demand forecasting at the Stock Keeping Unit (SKU), category, or channel level. Retailers can test scenarios, adjust Open-to-Buy plans instantly, and stay ahead of market shifts—boosting accuracy and reducing costly surprises.

🔹 Unified Planning Environment

Board connects sales, finance, and merchandising with one integrated platform. Everyone works from the same data, enabling faster decisions, stronger collaboration, and tighter alignment between strategic goals and daily execution.

Conclusion: Planning Luxury with Precision

Indonesia’s luxury fashion retailers are operating in a complex, competitive environment. The old ways of planning—manual tools, disconnected teams, and reactive decisions—can no longer support the precision, speed, and coordination required to succeed. Luxury fashion is not just about style—it’s about strategic execution. And the future belongs to those who plan smarter.

Talk to our expert

Hananto Pandu SE., S.Kom., Ak., CA., CPA., ASEAN CPA. - 0896 3626 1684

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Best Regards,

Yohannes Ekaputra Sananto SE.

yohannes.sananto@sazankahenig.com

Financial Product Consultant

PT Sazanka Henig Solusi

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