Ask anyone in the know what turned the apparel industry on its head and the answer is likely to be one of two things: Zara or e-commerce. Both helped to fan the flames of consumers’ desire for new styles at relatively cheap prices however and whenever they want to shop—and brands and retailers alike have been playing catch-up for years.
But there are still plenty of lessons to learn from both business models, as a panel of experts stressed to attendees at Sourcing Journal’s “Currents of Change” Summit last week in New York.
“Brick-and-mortar is not going away,” stated Mark Burstein, president of sales, marketing and research and development at NGC Software. “It will never go away because a lot of times you go shopping with your family, you go shopping with your friends; it’s a memory event. But the goal is to really get the product that the customer wants and the one finite constraint with brick-and-mortar retailers is retail space. You can’t build more walls as quickly as you can get the right products.”
“What we’re all dealing with is this idea of speed to market,” agreed Janice Wang, CEO of apparel sizing and fit company Alvanon. “I think a lot of people are chasing this model of fast fashion, keeping people entertained and consumers coming back into your store and having this constant newness.”
“The supply chain has become very, very important,” Burstein continued. “The Zara model is really about getting the product to the customer as quickly as possible, the one who will pay full price because that’s where you make the most profits. It’s not about creating floor sets—how can we get it to the consumer who wants to buy it?”
“We are in the era of faster, cheaper,” echoed Hebe Schecter, president of textiles company Kaltex North America. “We’re trying to connect samples and costing and manufacturing. The only way to connect all those dots is through technology.”
She added, “I believe the only way for us to be better, more efficient and compete all over the world is to understand what the end-consumer wants.”
Burstein agreed, pointing out the need for a feedback loop so that as things are selling in the stores, everyone has access to point-of-sale information for each one of those products so more can be made if needs be, or if the merchandise isn’t moving, it can be dropped.
Technology: every action needs a reaction
“Planning is very, very important but reacting is even more important,” he said. “And that way it takes it back to the design, so design isn’t waiting until the end of the season to see what the number one seller was. They’re seeing what’s happening as it is happening. So having that visibility across the entire enterprise with customers, suppliers and vendors is really the trend.”
“The more the store knows about the consumer, the more about what she buys, what she likes to buy, the better the offers,” agreed John Harmon, senior analyst at Fung Business Intelligence Center.
Wang cautioned that before companies can start looking at using new technologies, like 3-D, they need to set some expectations. “Your product development only becomes faster if the existing process is actually already quite streamlined and you have the right kind of people in play so that you can do this,” she said, noting, “I don’t think a lot of companies today have the kind of Zara-type ability to have that feedback loop because everything in a lot of these companies is quite siloed and I think part of this is just the communication we have to have between the product development, the sourcing team, the material team so that everybody is in alignment.”
Basically, the right people and processes have to first be in place and communication is key.
“I think it has to be a very holistic view of all of the parts of the supply chains and how it’s going to affect your partners, not just yourself,” she added.
Burstein insisted that while not enough companies are adopting technology to the level they should be, in order to quickly get product to the place that’s buying it, it’s not a lost cause.
“When you think about the end to end, the common denominator is the style. You design styles, you develop styles and you go out and find styles. You issue POs for styles and have them made. You ship styles to the end destination and then you sell styles to the customer,” he said. “So really that SKU-level detail in capturing all of that and running analytics against that is where you can see what’s happening in sales and then you can back into the supply chain, into development, and that’s one way you can increase speed to market.”