The fashion supply chain might have earned a reprieve from fresh trade-war drama with the recently announced 90-day truce, but many within the apparel industry harbor lingering concerns over how consumers will react to inevitable price hikes.
At Lectra’s recent Fashion Gathering breakfast event, the subject of tariffs surfaced as a concern myriad retailers are struggling to manage. In fact, First Insight’s chief commercial officer Jim Shea believes tariffs will be the single-biggest factor defining the apparel business in 2019.
Though brands and retailers have historically used the First Insight decision-making platform to test how new products perform with consumers, Shea said he’s seeing a growing number of companies wielding the software to gain confidence on pricing decisions.
Prices on goods imported from China will inevitably creep higher thanks to the tariffs, so apparel companies are trying to figure out how much of a price hike consumers will be willing to accept. There’s little margin for error on highly commoditized products where competition is stiff, Shea said, which could propel industry players to develop more “unique, exclusive product that’s differentiated” and can command a steeper price.
“If there’s no comparison to your product anywhere else, and the customer wants it and they like your brand, they’re going pay for it,” Shea explained.
Across the spectrum, everyone from brands to retailers to manufacturers is trying to deliver on consumer expectations around personalization, which, said audience member Andrea Madho, CEO of made-to-measure manufacturing firm Lab141, has leapfrogged customization as the trend most influential on apparel sales. Echoing the need to help fashion companies offer tailored-to-you products, Lectra unveiled an end-to-end solution that automates the personalization process from the earliest product development stages all the way through to when a garment is cut and sewn.
In a press statement announcing the news, Lectra described the new solution as a “game-changer” that helps apparel enterprises sidestep the complicated, individualized workflows that are typically part and parcel of made-to-order production, and often delay garments from quickly reaching their end consumer.
In fact, said Lectra CEO Daniel Harari, personalization is poised to become “an industry-wide phenomenon.”
“For the first time in the fashion industry, there will be a comprehensive personalization solution that will be able to perform under the same market conditions as the ready-to-wear segment and produce the same, if not better, results,” Harari said.
Lectra’s end-to-end personalization solution is the product of four years of R&D involving a 100-person team of experts. What’s more, the value proposition of personalized apparel is compelling both for fashion companies and for consumers. The shopper’s more invested in and connected to a product on which she’s put her personal stamp—and is less likely to quickly discard an item she’s “helped” to bring to fruition. For brands and retailers, enabling personalization means only manufacturing when orders roll in, whittling down excess inventory and minimizing costly, profit-eroding markdowns.
Macquin noted that manufacturing, in tandem with the supply chain, is once again of central importance, but it’s being discussed in a new light.
“For many years, conversations with our customers across the globe have revolved mainly around how to help them produce profitably and efficiently at scale,” Macquin explained. “But a lot has changed—the new consumer has forced fashion and apparel companies to shift their focus and seek out new, profitable business models that can help them quickly satisfy increasing demand for quality, unique products.”
Among those profitable new business models? Potentially expanding into new categories, such as men’s wear or children’s wear, according to Lectra. Companies signing up for its end-to-end personalization solution could leverage its supply chain flexibility to broaden their audience without carrying additional inventory. Or, made-to-order production offers a way to try out a trend without significant financial commitments.
Lectra’s Macquin stressed how this new tool closes the gap between apparel companies and the people buying their products. “The Lectra Fashion On Demand offer will help our customers,” he said, “by connecting the entire personalization production process, and most importantly, by connecting them directly to the end consumer.”