In the event of an earthquake, some buildings rock and roll along with the shifting ground while others turn to rubble. The difference? The former were designed to be flexible while the latter were designed to survive only under the most ideal circumstances.
There’s been little fun about the way the last year or so has played out for most apparel retailers as their foundations have been tested by seismic shifts. Caught in the perfect storm of the e-commerce take over, the more empowered consumer and the emergence of fast fashion, traditional retailers have been tasked with upending almost every aspect of their businesses while also scaling a steep, ever-changing learning curve.
But for those who have managed to keep their lights on, these tough times have provided opportunities plus a crash course in what it takes to survive today.
At last week’s Sourcing Journal Summit in New York, panelists, keynote speakers and attendees took stock of where we are as an industry and what the uncharacteristically large number of store closings means for apparel’s future. By and large, they agreed that for those that can accurately read the situation and adapt accordingly, there are gains to be had even in this environment.
Spencer Fung, Group CEO of Li & Fung Ltd., for one rejects the idea of the apocalypse.
“If you really looked deep down, retail’s still growing. It’s growing in the U.S. It’s growing around the world. So it’s not really gloom and doom,” Fung said. “We see very healthy things with retail all over the world, especially with fast fashion, value retailers. There are a lot of good things coming around, so it’s not really gloom and doom. So I don’t think it’s a retail apocalypse. It’s the changing of the guards.”
And it’s precisely that out-with-the-old, in-with-the-new trend that has some in the industry rattled, but Fung said for those that remain optimistic and don’t live and die by the headlines, there’s a new path forward.
“If you have a glass-half-empty kind of thinking, you’ll call it a retail apocalypse. But if you’re a glass-half-full kind of person, this is the best opportunity that retail has ever seen because the rules of the games are changing,” he said. “And if you can figure out the new rules—be it online or omnichannel—then you can win.”
The common sentiment among attendees is the industry, in it’s new form, will reward the fast and the flexible.
Again and again when asked what we’ve all learned from the past few months, words like “evolve,” “change” and “nimble” dominated the conversation.
[Read more from the Sourcing Summit: Your Supply Chains Are Out of Date and This is the Tech That’s Taken Over]
“The most important thing is to be flexible in light of change,” said MeiLin Wan, vice president of textile sales for Applied DNA. “That means flexible in the way you adapt to innovations, flexible in your mindset about sustainability and flexible in being able to respond and move quickly.”
Put more bluntly: “Change or die.”
That’s according to Mark Rose, senior vice president of global sourcing and production at American Eagle Outfitters. The lesson from the current turmoil, he said, is to “evolve, challenge what you know and discover what you don’t. And be satisfied with that journey.”
For him, the best part of the last year has been watching new players emerge and existing companies pivot as they figure out where the white space is and how to invest in their businesses to capitalize on it.
William Silveira, the vice president of account management and business development at Bureau Veritas Consumer Products Services, said the industry is currently playing catch up. “The customers are changing, the wants and needs of customers are changing so retailers have to adapt to that change,” he said.
Gone are the days when you can ship coats to stores in August and swimwear in January, Silveria said. Though it’s long been a mantra of the apparel industry, it’s never been more true: Today you have to have the right product in the right place at the right time.
Just look at the ways in which influencers are able to parlay their social followings into apparel collections. Marsha MacDonald, director of production at Guess Inc., said it’s an example of what can happen when you’re tapped into the consumer. “We have to listen to the customer,” she said, echoing Sourcing Journal founder Edward Hertzman’s opening address. “Influencers are literally able to create new companies from social media. And even though we knew these things would happen maybe five or 10 years ago, we didn’t really take it seriously. Now we have to take it seriously.”
MacDonald continued, the enemy of change is feeling comfortable and safe. The days of security, she said, are over.
“It’s absolutely about being nimble. Taking your cues from places outside the industry,” said Marsharelle Tolbert, business development associate, adding he’s seeing the change actually taking place. “People are really starting to turn. Companies are really starting to adapt and do what they need to do to think outside the box.”
—Reporting by Sabrina Bovell