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, James Theuerkauf, CEO and co-founder of inventory planning platform Syrup Tech, discusses why prioritizing cost-cutting is holding fashion back and the benefit of leveraging artificial intelligence for decision-making.
Name: James Theuerkauf
Title: CEO and co-founder
Company: Syrup Tech
Which other industry has the best handle on the supply chain? What can apparel learn?
Apparel can take inspiration from many other industries. Electronics and automotive are two interesting examples of industries that have complex supply chains, and yet have adopted modular designs, use a combination of nearshoring and offshoring, and are laser-focused on profit maximization. Apparel supply chains are still mostly focused on unsustainable cost minimization, as opposed to sustainable profit maximization; electronics and automotive are a step ahead here.
How would you describe yourself as a consumer?
Pretty demanding. I really care about sustainability credentials. A seamless e-comm experience is table stakes, but an excellent retail experience tilts the balance for me. I’m price conscious, but care more about being able to get the styles I want in the size I want.
As a consumer, what does it take to win your loyalty?
Verifiable sustainability credentials, a seamless omnichannel experience and being in-stock most of the times.
What’s your typical work (or weekend) uniform?
I try to not have a uniform! If I had to pick one though, it would be the classic white sneakers, fitted jeans and a crew-neck T-shirt.
Which fashion era is your favorite?
How Tom Ford turned around the house of Gucci.
Who’s your style icon?
What’s the best decision your company has made in the last year?
We’re a fully remote team, but since last year we hold quarterly “Syrup summits” where we bring the entire team together for a week. With Google as our lead investor, we get to use Google office space around the world for this, and it’s been a gamechanger from both a culture as well as a productivity standpoint. Last year we went to Barcelona, Los Angeles, Warsaw and New York. This year we’ve already been to Madrid, and there’s three more coming!
How would you describe your corporate culture?
Supportive, mission-oriented, meritocratic and global.
What can companies learn from Covid-19?
The world is changing more quickly than ever before. This means companies need to be fast to adapt and agile in their processes, and they must embrace new technology that allows them to adapt decisions quickly to a changing world. Covid-19 was a major black swan event, but we’re seeing micro events that change demand on a weekly basis, from changing economic indicators to micro trends on social media.
What should be the apparel industry’s top priority now?
Inventory, of course! Inventory is the apparel’s biggest source of cost, risk—and opportunity. Finding ways to make better inventory decisions is a huge opportunity to increase contribution margins by increasing full-price sell-through, minimizing end-of-season inventory and reducing manual tasks.
What keeps you up at night?
We obsess about delivering the best product in the market to all our customers. How to make what we have even more powerful, how to deliver new modules and use cases quickly, how to make the user experience even more intuitive—that’s what keeps me up at night.
What makes you most optimistic?
We’re seeing a huge openness to try out new technologies, even with brands that are over 100 years old. We’re seeing a lot of excitement about how AI can empower better decision-making. In a relatively old-school industry like apparel and retail, I find this a huge case for optimism that technology will be able to create a step change.
Tell us about your company’s latest product introduction:
While our flagship product is our omnichannel allocation module, we recently graduated our buying and reordering module out of beta. Here, we use our AI-powered algorithms to send recommendations to buyers and planners on how much inventory to buy for certain styles, both for continuity and carryover styles, as well as for newness products. The results we’re seeing with our customers are extremely promising, with gross margins increasing more than 5 percent, fueled by service levels increasing more than 10 percent while on-hand inventory is down 20 percent.