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Are Apparel Retailers Willing to Pay the Cost of Innovation?

Apparel retailers are at once in a world of ‘innovate or die’ and ‘lowest cost wins,’ so forking over cash for innovation hasn’t been as easy as might soon be necessary.

Highlighting the outcomes of a recent panel on customer engagement and innovation at the World Retail Congress in Dubai last week, Alvanon President Ed Gribbin said companies tend to talk about wanting and needing to innovate, but hard and fast cultures don’t often foster that innovation—and, at times, even hinder it.

“There’s a lot of ‘We need to innovate, as long as it doesn’t cost anything and we don’t make any mistakes’ kind of attitude in the industry,” Gribbin said. “It is changing, but slowly.”

What it’s really going to take to shift the industry’s mindset is a new generation of leaders who innately embrace disruptive thinking.

And that disruptive thinking, more often than not, will have to put the consumer at the center of everything. In the long-term, the best innovations won’t be about cost or time savings, or even increased efficiency. They will be about doing a much better job of engaging and delighting customers.

Outside of apparel, Apple has created a seamless, simple customer experience that Gribbin said apparel retailers should take a nod from.

“Buying online, pickup or returning in-store capability is only the beginning, but most apparel retailers do not yet have this capability,” he added. “How many apparel retailers have a Genius Bar where you can schedule your time with a personal stylist? That would be customer-centric innovation.”

Innovation isn’t easy. Often, it’s a mindset—not a set of activities—that means idea creation, documenting, testing, failing, re-tweaking, and, of course, money. For it to work, risk and failure both have to be OK.

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“When a good idea gets a green light, it should not be rolled out without testing (e.g. Ron Johnson’s rollout of an ‘everyday low price’ policy at J.C. Penney), but neither should it be theorized, tweaked and debated until it’s ‘perfect.’ Nothing is perfect. Try it out even if it’s only 60-70 percent developed; you will learn faster and get to true innovation much faster,” Gribbin offered.

The biggest impediment to innovation, beyond getting the leadership on board, has been organizations’ desire to leave well enough alone.

“They call them organizations for a reason: they’re totally structured, organized and remarkably inflexible,” Gribbin explained. “Everyone has a ‘day job’ and it includes doing exactly what they were hired to do three, five, 10 or 20 years ago in some cases.”

The hard truth here is that some companies will need to part with “old skills” employees and hire workers with the new skills they need.

One retailer who spoke at the World Retail Congress, Gribbin said, explained how they had never even discussed a digital strategy until 2013. But at that time they put plans in place to develop a website and were in business online in 2015. When questioned about their omnichannel strategy, the retailer said its goal was to be “more omnichannel” by 2020.

“In today’s world, who knows if they will even be here in 2020,” Gribbin said.

Companies not only have to be able to disrupt, but they have to be able to disrupt themselves, as Inditex-owned Zara has.

“Zara’s design and production model of investing in fabrics and local production, practically inventing the ‘fast fashion’ phenomenon, has disrupted the entire industry,” Gribbin said. “They have new, fresh product to engage customers every two weeks and they have their competitors struggling to find a way to catch up.”

A model like Zara’s relies on business smarts, advance sourcing of fabrics and trims, designing into the fabrics they have, sourcing the majority of their goods within one day’s transit to their distribution centers, soft-testing and then more widely distributing the most in-demand styles, Gribbin explained.

“No one, really, in the industry is structured or motivated or able to copy that.”

In other companies channeling new paths for product development, there’s been an increasing push to test and implement 3D virtual product development strategies to reduce sample iterations, finalize line plans and improve speed to market.

Spencer Fung, group CEO of sourcing firm Li & Fung, who gave a separate keynote at the World Retail Congress, said, according to Gribbin, that his company is trying to shorten the typical development cycle down from 12 months, with nine months for pre-production and three for production.

“The three for production has not changed but they are trying to reduce the nine months to six, three, even one,” Gribbin said.