Up Close is Sourcing Journal’s regular check-in with industry executives to get their take on topics ranging from personal style to their company’s latest moves. In this Q&A, Kevin Sterneckert, chief strategy officer at unified autonomous commerce platform DemandTec by Acoustic, discusses the impact of a “caring culture” and what retailers get wrong about forecasting.
Name: Kevin Sterneckert
Title: Chief strategy officer, DemandTec by Acoustic
Which other industry has the best handle on the supply chain? What can apparel learn?
The past few years have taught us that virtually every industry—including apparel—has supply chain issues that must be addressed. These industries, from automotive to manufacturing to consumer packaged goods, had previously learned how to work around issues because other parts of the business were consistent and stable. But when the pandemic hit, core shortfalls that have existed all along were exposed and created massive delays, which caused a ripple effect for the global supply chain.
For example, there shouldn’t have been a toilet paper shortage at the beginning of the pandemic. The average day supply in the CPG industry is 28 days between stores and warehouses. However, the forecast for next-day delivery is based on sales, not sales plus unmet needs; this is a broken part of the forecasting engine. Not enough merchandise was being sent the next day even though there was enough in the warehouse. To truly understand demand, retailers need to know the number of sales plus the demand when there was no inventory, so they have the right amount of inventory in the store the next day.
How would you describe yourself as a consumer?
I’m someone who knows exactly what I want and what I expect to pay. Like many consumers, I have a high expectation for service and low tolerance for friction around the buying, delivery and return processes. I’m also not necessarily a loyal shopper—I’m a shopper who seeks specific things with a specific purpose. When I find the item that meets my intended purpose, if it is an appropriate price and from a retailer that I have the right level of confidence with, I will purchase.
As a consumer, what does it take to win your loyalty?
Retailers need to provide convenience, a fair price and helpful support when I need it. There are certain retailers like Costco, Best Buy and Amazon that I’m loyal to because they’ve made it their business to deliver on these three items.
What’s your typical work (or weekend) uniform?
On weekends, if I’m around the house, I prefer to wear shorts, a comfortable golf shirt and no shoes. If I’m going out, I’ll put on Sperry’s or flip flops to complete my outfit. Comfort is key!
Which fashion era is your favorite?
I would describe my style as “golf casual”—a style that has spanned many decades. What people wear today on a golf course is very similar to what we wore 20 or 30 years ago. While I wouldn’t describe myself as a fashion maven, I like to think I have timeless style.
Who’s your style icon?
Someone like Tiger Woods—anyone who can wear comfortable, casual clothes and look good doing it.
What’s the best decision your company has made in the last year?
In a difficult economic environment, the best decision Acoustic has made is to continue investing in our products, people and innovation. When you continue investing in the business, it’s more likely to produce positive results.
How would you describe your corporate culture?
Acoustic’s corporate culture is collaborative, open, transparent and fast-paced.
What can companies learn from Covid-19?
Many companies have learned that employees are more productive when they’re happier, and happiness often includes some measure of flexibility. When you work, how you work and where you work shouldn’t really matter as long as the work is high-quality and on schedule. If employees have this flexibility, they’re typically more well-rounded and happier.
Learning how to be compassionate is also a critical lesson from the pandemic. Many people—including myself—required extra time to recover from Covid-19. Working for a company that gives you the space you need to recover and doesn’t rush you back to work after an illness is critical to fostering a positive, caring culture.
What should be the apparel industry’s top priority now?
It’s critical for retailers to get closer to their customers’ preferences and reduce the time it takes to go from ideation to placing an item in the customer’s hands. While fast fashion has its drawbacks, one thing it does very well is capitalizing on a trend in the moment. By understanding your audience and their preferences, you can be more aligned to what they want produced and when they want to be able to purchase it. If you can reduce the time it takes to produce an item from six months to 30 days, you’re more likely to capture consumers’ interest.
What keeps you up at night?
I’ve been in the retail and CPG industry for over 20 years, and I find I’m most restless when I hear the same viewpoints and predictions repeated by industry thought leaders year after year. While it’s critical for us to recognize the major challenges and opportunities faced by the industry, I think it’s just as important to focus on the nuances that specific retailers or audiences may face.
What makes you most optimistic?
I see the next generation of retail leaders truly disrupting by considering creative solutions for common challenges and bringing innovation to brands of all sizes. Some of these out-of-the-box thinkers are joining the retail ranks, which means there’s a bright and vibrant future ahead for consumers, suppliers and those making a career in retail.
Tell us about your company’s latest product introduction:
DemandTec by Acoustic helps retailers and CPG partners balance real-time shopper demand with business objectives to drive sustainable, profitable revenue growth. Through our AI-powered solutions, we help businesses make smarter promotional decisions, improve price perception and continue delivering on consumers’ expectations for the best products at the best price. Our Unified Lifecycle Pricing platform—which offers a complete suite of pricing, promotions, markdowns and vendor collaboration solutions—is designed to help retailers realize profitable growth while meeting consumers’ pricing expectations.