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Report: Retailers Vie for Speed to Market Above All Else

Today’s consumers are all about quick, and apparel companies are finally starting to catch on en masse—a recent sourcing survey found that speed to markets tops the list of priorities among manufacturers and retailers.

Apparel magazine revealed the findings of its Excellence in Global Sourcing report produced in conjunction with Kurt Salmon during its Ninth Annual Sourcing Summit at Sourcing at MAGIC last week, noting that getting goods to shoppers sooner was the biggest trend apparent among apparel companies this year.

Seventy-eight percent of executives surveyed said they either have plans in place for fostering faster fashion or will within the year.

Among those surveyed, the average total cycle time was 190 days—95 days for product design/development, 64 days for production and 31 days for transportation—which, in today’s market, is just too long.

Eighty-one percent of respondents said they felt their implemented speed to market strategies could improve full seasonal calendar cycle times by at least 1-4 weeks, provided processes are adequately streamlined.

And those streamlining strategies start with the supply chain. Eighty-two percent of respondents said they would work on strengthening strategic supplier relationships in order to improve speed to market, 59 percent mentioned vertical integration and 54 percent said they would turn to nearshoring and dual sourcing to do it.

Billabong, for example, is narrowing its vendor pool and shoring up its relationships with top strategic suppliers, the report noted. Jimmy Choo, on the other hand, is leveraging a multi-supplier strategy that matches manufacturers with specific skill sets to particular shoe functions to diversify risk and boost margins through faster delivery of new collections and better inventory control.

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So what’s stopping apparel companies from doing the streamlining necessary for better speed to market?

It’s design and development inefficiency (and a slow sampling process), distribution center processing and transportation and network strategy that apparel executives cited as the top factors weighing on the supply chain timeline.

The other problem is that companies just aren’t sticking to production calendars. 84 percent of those surveyed said their organizations have less than 90 percent adherence to key calendar dates.

And contrary to China’s predicted decline as a top sourcing locale, survey respondents noted greater preference for sourcing in the east as consumer demand has seen an uptick there and production centers are more reliable than in neighboring South Asian nations. Forty-one percent of respondents mentioned China as the top sourcing region, compared to 38 percent last year, and interest in new investments in China was up 6 percent this year over 2014.

But it was the Americas that saw the biggest boost (9 percent) in interest as more companies implement nearshoring strategies. Haiti, Colombia and Central America were noted as key areas of interest.

Following the survey presentation, panelists including Bryan Riviere, VP of product development and sourcing for Levi Strauss & Co, Adi Zukerman, Cabela’s senior director of commercialization, Jeremy Wooten, president of Homtex and Cort Jacoby, a partner at Kurt Salmon, weighed in on sourcing’s most relevant issues and how their respective companies are creating strategies to meet the needs of a modern market.

At Levi’s, Riviere said, migrating from environmental sustainability to people sustainability (improving workers’ lives) and looking at sourcing opportunities that could help mitigate the effects of currency fluctuations are areas of focus, but letting vendors do more can prove a major benefit.

“I don’t need to be a manufacturing expert, I need to rely on the guys who do it day in and day out,” Riviere said. “Don’t be shy about walking up to them and saying, ‘How can you do more?’”

Jacoby agreed that finding the right talent in the form of suppliers and deciding what they will do for the company versus what the company will handle internally can be key for creating the efficiency that ultimately leads to improved speed to market.

The conversation naturally turned to Zara, the retailer oft touted for its superior speed to market, and Gribbin said the one question companies always ask is: How can we get to be more like Zara?

“They sit on 8.1 million liters of fabric that they bought last year in Spain,” Gribbin said of the Spanish fast fashion chain. “They have a network of factories—50 percent of their production is built in proximity, it’s nearby. Only basics, non-lead time items come from Asia.”

The retailer has also skipped vital quality steps in order attain its reputation for swift supply, Gribbin said.

But, he explained, “One thing Zara is even realizing now is that the two-week cycle where you don’t actually fit the product, you don’t actually check the product, customers are starting to be more aware of that. The quality issue is absolutely critical to this whole idea of speed.”

Technology has also become critical to ensuring fast turnarounds.

According to Wooten, “Automatic sewing, automatic cutting is the single biggest opportunity we have to increase speed to market. The biggest advantage the U.S. home textile industry has to offer is the ability to turn fast.”

3D technology, in particular, Gribbin said, will be key to producing product quickly, too.

“Three years from now, everybody is going to be using 3D to reduce cycle times and it’s going to change cultures in business,” he said. “People are going to realize that executing product is more about sciences than the art.”

Zukerman seconded the thought, adding that using 3D technology for sampling will cut out time and costs in pre-production. At Cabela’s, he said, they look at decisions designers are making and how those decisions will impact costs and timelines before tech packs go out and before the retailer has wasted a month sending a sample out to a factory and waiting to get it back.

“3D sampling and digital printing is a great example of our vendors coming to us and telling us ways they can add more value,” Zukerman said.

At the end of the day, Gribbin said, speed to market is all about customer engagement.

“You want to get faster because you want to engage the customer more frequently. You’re trying to engage them 24/7,” he said. “If you can put out product that’s more relevant to them and give them something new to look forward to tomorrow and the next day and the next day, that’s what’s going to make the difference.”