It’s no secret to retailers and brands that the consumer has taken control of the buying experience when it comes to apparel, footwear and accessories.
Not long ago, our industry blindly accepted the fact that we could all go through our normal 16 to 18 month product development process and all we had to do was have product that was more compelling than the store next door when it finally arrived. Then, we would close the sale and gain the consumer’s loyalty in the process.
Those days are over. It’s not the store next door that we’re worried about. It’s their mobile app, website, social media promotion, Instagram post, or (worse for them) someone else’s Instagram post liking their brand. And, it’s the fast fashion competitor who has fresh, new product much more frequently than we do; not to mention the non-traditional retailers like Amazon, Zalando and Alibaba who are going to beat our prices, deliver more efficiently, and take our share of market. It’s no surprise that come June 2017, Amazon is predicted to surpass Macy’s as the largest seller of apparel in the US.
Competition is everywhere and it’s no longer just other clothing brands and retailers. With disposable incomes flat for six years now and consumer spending on the rise both on experiences (travel, entertainment, dining out) and bigger ticket consumer items (cars, electronics, home improvements, appliances), the loser in share of wallet is fashion.
So, what would the ideal apparel supply chain look like with the consumer truly at the center? And, how can sourcing executives start to embrace these futuristic ideals in their day-to-day realities?
To start, it helps to use disruptive thinking, not incremental thinking. What would a future state look like if we were to successfully engage consumers and build share and loyalty at the expense of our competitors? Then, how do we prepare for that future state, given the realities of where we are today?
At its extreme, the future might look like the music industry looks today. Not long ago, music looked very much like fashion retail with stores in malls as the prime channel for consumer engagement. Today, music is 99 percent digital with the consumer paying subscriptions to listen (or put up with commercials to listen), with most purchases being downloaded to the consumer’s device of choice from the cloud. The industry and the artists (like our retailers and designers) still get paid for the value they provide but the entire process and supply chain have been changed forever and are, frankly, immensely more efficient.
What if the fashion shopper had their own 3-D printer and could peruse designs on social media, websites or other digital platforms, downloading what they want instantly, paying for the design (perhaps more for Gucci, less for Target), but “manufacturing” it right there in their own home? They could scan a QR code on a bus or train, a billboard, or anywhere to make what they want, when they want. What supply chain would be needed to support that? Most likely, only a printer, internet access, and the materials conducive to great fashion. At the end of the day, it would be a completely sustainable supply chain as well, because when the consumer tired of a style, they could simply recycle it and re-use the materials.
There has been much speculation about millennials and their embracing of the sharing economy (for example, AirBnB, Uber, etc.), followed by the question of whether it would evolve to include fashion. Rent-the Runway aside, most believe the idea of wearing clothing that someone else wore will not take hold due to the more personal nature of clothing. But being able to recycle every style in your wardrobe when you wanted something new would likely appeal to every generation of consumers.
This idea is not so far-fetched. A company called Blue Dragon displayed a 3-D printer at Magic in Las Vegas in February that is affordable ($2,400, but it may not need to be purchased by individual consumers; they may show up at your local FedEx Kinkos or UPS Store for communal use). It can print apparel designs today with three different types of nylon and one of polyester. It’s only a matter of time before fibers with natural content (cotton, wool, silk), or at least natural feeling characteristics, are available. Conductive fibers are already available enabling “smart fabrics” in 3-D printed garments that can track our health, fitness, location and who knows what else.
Well, that may well be the future but the Spotify or iTunes model for fashion is not here yet, so what do we do in the interim? Well, for starters, we need to dramatically shrink the typical product development cycle and shorten the supply chain. We can start doing that today. Re-engineering our design-development cycles to be continuous, developing and producing smaller, seasonally relevant capsule collections, perhaps one per month, would be a start. Smaller collections, timed just right, would mean fresher, more current and engaging product for consumers, and higher sell-throughs, fewer markdowns and closeouts for retailers.
The entire prototyping process would need to change. 3-D virtual product development technologies would need to be embraced. Buying decisions would need to be more decisive, perhaps without seeing or touching physical prototypes in some cases. The technologies and the processes to enable this transition exist today; the advice, guidance and implementation help are available, and some forward thinking retailers are already there.
Supply chains themselves would need to shrink and get closer to where the product will be sold. Zara’s high sell-throughs and margins not only justify manufacturing close to home, they enable it. Factory automation technologies from companies like Softwear Automation, whose sewing robots (sewbots!) were assisted in their development by an investment from none other than Walmart, will make it much more cost-effective to manufacture much closer to where a brand intends to sell their product. Adidas just announced that their Speedfactory, where they will once again make shoes in Germany using advanced robotics, will start manufacturing in the US within a year, and eventually in nearly every location where they have customers.
With today’s empowered consumer and their sense of immediate gratification being catered to by both traditional and non-traditional retailers, brands and designers, we are facing our future. And we are speeding towards it much faster than we realize. This weekend marks the annual Formula One race in one of the most beautiful, intriguing settings in the world, Monte Carlo. It’s a great analogy for retailers and brands today. We’re going 200 miles per hour, and that small wall in the distance is only a hundred yards away. Will we crash? Or will we figure out how to maneuver at high speed and survive, maybe even win?
Ed Gribbin is president of Alvanon Inc., a consulting and technology firm serving the global apparel industry. Since 2001, Alvanon has leveraged data-driven knowledge to equip leading fashion retailers, brands, designers and manufacturers with world-class growth, customer satisfaction, product development and supply chain strategies. Gribbin can be reached at 212-868-4318 or firstname.lastname@example.org.