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Why Fashion Needs Real-Time Traceability to Fuel Retail Recovery

Covid-19 has pointed out the visibility shortcomings in fashion supply chains.

The convergence of dwindling demand, closed stores and production delays due to labor and lack of raw materials dealt a blow to businesses. And without real-time information and tracing, it was more difficult for companies to adapt and reallocate orders and inventory from physical to digital sales channels.

As companies prepare for a historically different holiday shopping season and beyond, having real-time information about where products are—from development to end consumer to resale and secondary markets —is a competitive advantage.

“Clearly it’s been a tough year with brands heavily impacted,” said Niall Murphy, CEO and co-founder of EVRYTHNG, the Product Cloud managing digital identities for the world’s consumer products. “Brands like Levi Strauss, Ralph Lauren, Lululemon and Puma with strong balance sheets and committed digital strategies have been able to take advantage and extend their leadership. Unfortunately, a larger proportion of the market is still reacting, particularly those with large physical retail networks.”

Niall Murphy Evrythng
Niall Murphy, CEO and co-founder of EVRYTHNG Courtesy

Sourcing Journal spoke to Murphy about how traceability can help reduce turnaround times, improve fulfillment and deliver better shopper experiences.

SJ: Now that demand is beginning to pick up, what is the top supply chain challenge facing fashion brands?

NM: Unsold inventory in the retail channel is a barrier to new inventory getting to market, which is a threat to margins and revenue growth. Brands need better visibility of both inventory across their supply chain, and of demand through their channels to be able to optimize supply responsiveness in recovery. Traceability information from items across the supply chain can provide this intelligence. Brands also need to innovate their interface with the end consumer so that they can be more present at the moment of purchase—for example, when a consumer reorders or seeks a complimentary purchase. Digitized products are a powerful tool to create immediate presence with the consumer.

SJ: With the uncertainty of today’s retail climate, many companies are working to speed up the product development process. What role can product digitization play in shrinking the time from concept to completed garment?

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NM: Fulfillment can be optimized by matching real-time information about the location and availability of an item’s materials with production or assembly capacity, and transportation capacity. Brands need real-time access to information about completed items but also information about the components used to manufacture those items as well as the overall capacity within the sourcing and production network. Digitization enables this by making item-level components visible for analysis and action.

SJ: As a greater portion of retail sales moves online, how can digitizing products help to create a more immersive, personalized shopping experience for customers?

NM: Last week, online sales on Black Friday hit $9.03 billion, a 21.6 percent year-over-year increase from last year. These stats speak volumes. In answer to your question, a digitized product is connected to the web with a digital identity and is therefore trackable across its lifecycle. As a result, digitized products provide a direct channel for digital engagement with a consumer through the consumer’s mobile device. A key challenge for brands in the post-Covid world of dramatically accelerated e-commerce is to be present with consumers when they want to buy. There are numerous touchpoints outside of the physical store or the search engine of an online store or marketplace. For example, when a consumer receives a product purchased through a third-party e-commerce channel or when a consumer encounters a product a friend recommends, or when consumers look for complimentary products to their existing possessions, or when a consumer wants to upgrade or replace an existing item, or in recycle or upcycle situations. All of these moments, and many more, are situations where the brand can directly engage with the consumer through the product as an owned digital medium.

Polo Ralph Lauren scan

SJ: How will holiday 2020 look different from previous years? How are you working with clients to prepare for an unconventional shopping season?

NM: The 2020 holiday will be a massively virtual experience, and we will witness a powerful tension between burning off inventory that has been held up in the channel over the past eight or so months, and the demand for fresh inventory that brands need to get to market in order to yield much needed healthy margins. We are working with brands to innovate shopping experiences to extend the number of touchpoints with consumers as brands look to scale up their ability to drive e-commerce with consumers in new ways. We are also helping brands prepare for a massive scaling of returns and reprocessing management, addressing potential brand integrity challenges head-on.

SJ: Looking ahead to 2021, how will digitization separate the brands who bounce back from those that go bankrupt?

NM: Three things will separate brands that survive and thrive in 2021: the ability to accelerate and extend e-commerce capabilities; the capability to throttle supply networks to optimize turnaround times and navigate continued supply volatilities; and third, a brand’s ability to effectively gather real-time data to connect and engage consumers directly while providing visibility into their supply chain to run their businesses with optimal agility.

Click here to learn more about EVRYTHNG.

Niall Murphy is CEO and co-founder of EVRYTHNG, which links every consumer product to the web—helping consumer product brands run their business differently by knowing what their products know. A computer scientist by training, Murphy is a technologist, serial entrepreneur, and angel investor with 25 years of experience in innovation and future thinking.