Retail in 2021 is facing considerable pressure and ongoing uncertainty as brands and retailers adjust to the historic disruption of Covid-19 and, at the same time, wrestle with market pressures, operational challenges and strategic goals that the pandemic has only exacerbated.
At the start of what is destined to be another difficult year for every industry, change is a constant for retail. Store closures have suddenly tilted the channel mix toward e-commerce and online sales. Consumers still want constant newness from an ever-accelerating calendar, and in a world where most media has become digital, a trend can become a global phenomenon in the blink of an eye. Meeting these demands, without sacrificing quality, service or brand image, is the primary measure of retail success. In a recent report published by IDC:
“…modern connected customers and their expectation for increasing levels of service are forcing business cycles to compress in order to meet requirements related to speed.”
Traditional product design, development and supply chain processes were designed for a very different pace. Prototyping and building sequential samples to get a new product approved have always been time-consuming tasks, adding delays to the disconnected tasks that typically follow it—most of which have their own bottlenecks and stress points built in. And to complicate things further, brand and retail teams are still working remotely, with an uncertain timeline for returning to the office, placing a greater emphasis than ever on virtual collaboration in-house and in the supply chain.
Historically, with a predictable, seasonal model, new product introductions occurred at set intervals, and workflows could be organized months or even years in advance. As a result of the dominance of fast fashion and now the scattershot calendars created by social media-driven trends and global pandemics, shoppers expect to see new styles on a monthly—or even weekly—basis, and they are making purchases according to unpredictable behavioral patterns. At the same time, digital-native disruptors who were well-prepared for this time have increased their competitive edge after dramatically redefining the retail experience with huge assortments, AI-driven recommendations, hassle-free returns and same-day delivery.
This is a hard act to compete with, and without the right technologies to power digital transformation, increase speed to market, optimize supply chains and enable remote working and collaboration, even established retailers can fall behind the curve.
Even before the emergence of a global pandemic, that highly competitive landscape had stretched both in-house creative processes and upstream operations to a breaking point. A recent study from McKinsey stated that “…to achieve expedited deliveries that consumers demand in a cost-effective way, retailers need a unified view of their supply chain that show what is available at each point and channel at any time.”
Many retailers were already taking steps to tackle this prior to Covid-19. The same McKinsey study revealed that 93 percent of supply chain executives were aiming to improve the agility and transparency of their supply chains to improve resilience. Of course, the pandemic demonstrated the negative impacts on businesses that did not have the right levels of agility, in high levels of sourcing and supply chain risk, with orders disrupted or unfulfilled, and retail channels stuffed with unsold stock.
Tightening the timeline between ideation and finished product, and getting that finished product into stores has, therefore, been front of mind for brands and retailers for some time—and Covid-19 has accelerated that trend—to drive speed and agility, to capture and leverage data, to better enable remote workers and optimize a collaborative supply chain.
But the scope of the time saving and efficiency improvement that today’s retail market requires is far beyond iterative improvement. According to Boston Consulting Group, a trend can now emerge and then spread across the world in three to five weeks, when it used to take a full year—an acceleration that has outpaced all but the most ambitious digital transformation strategies.
Capitalizing on a window of opportunity as small as three to five weeks means revitalizing in-house processes to get them running as quickly as the market demands, at the same time as overhauling supply chains for greater visibility, agility and insight. This is what we refer to as having the ability to work@digitalspeed.
To work@digitalspeed, brands and retailers will leverage data and technologies to capture, analyze and use data at every stage of the plan-to-sell cycle, to predict and react to emerging trends. Their creative and merchandising teams will be able to collaborate visually when remote working is standard. Their global supply chain will be connected, transparent, compliant and more able to cope with disruption. Their collection planning and SKU-level decisions will be driven by accurate information, informed by AI and monitored by real-time analytics. Their products will be born digital, with detailed 3D assets being deployed for in-house range building and fit sessions, as well as to sell to consumers through e-commerce storefronts and marketplaces before a single stitch is sewn.
In a detailed report, analyst firm Forrester wrote that:
“Digital transformation is not elective surgery. It is the critical response needed to meet rising customer expectations, deliver individualized experiences at scale and operate at the speed of market.”
We know this from experience. Our teams have already helped to fuel the digital transformation strategies of clients in fashion, footwear, apparel, accessories and hardlines, using pioneering, PTC-owned technologies like cloud-based PLM, Artificial Intelligence, Machine Learning, IoT, Augmented Reality and 3D simulation. All of these cutting-edge technologies are packaged into our Retail Digital Transformation Platform, with our core FlexPLM V12 solution acting as the “digital backbone” and collaborative engine—providing a single source of truth that adds value to every stakeholder in the extending value chain.
Just like an automotive race, though, what’s under the hood is only part of the picture. To work@digitalspeed requires a culture and an attitude of innovation informed by the experience of large-scale business change. That’s why PTC’s Retail Business Unit is staffed by seasoned fashion and retail professionals who have earned the trust of the champions leading the charge for digital change at iconic brands like L.L. Bean.
“The folks I work with at PTC are industry experts,” Lindsay Clunie, process manager at L.L. Bean, told me. “They have sat in my chair, as a product developer, designer or technical designer. They are credible.”
Based on that expertise, and our experience of working with more than 1,000 other brands and in excess of 211,500 daily users of our FlexPLM platform worldwide, we have distilled the essence of what it means to work@digitalspeed down to five key pillars:
1. Seamless bi-directional data capture and flow from plan to sell
2. Social network engagement for early insights to understand and predict consumer profiles and trends
3. A connected and integrated supply chain that provides visibility and agility, and supports compliance goals (quality, sustainability, social standards)
4. Using data intelligence, analytics and simulations to make good decisions, faster, ensuring the right products get to market on-time, on-trend and on-budget
5. Leveraging the 3D consumer & buyer experience to better sell products, even before being produced
Each of these pillars offers its own unique ROI, with a rapid time to value when approached as an isolated project. Taken and integrated together, they provide a platform for brands, retailers and their supply chain partners to realize “true” digital transformation.
And that’s a claim we can quantify. Working with PTC as their technology and service partner, our customers around the world have already taken big strides toward digitally transforming their businesses and getting ready to work@digitalspeed.
Using PTC’s Retail solutions, Home Depot improved its cycle time by 18 percent and Lacoste improved decision making in a matter of days. Working closely with our retail team, Deckers Brands has shaved 18 weeks off its typical go-to-market timelines, saving $150 million over eight years. With PTC’s FlexPLM solution as its single source of data, Chico’s FAS has been able to collaborate with its suppliers, cut samples and save close to $6 million. And in response to the coronavirus outbreak, Vera Bradley was able to shift its entire design and development pipeline from handbags to medical-grade masks and gowns in a matter of days—with no need for customization.
Many of these retail leaders are also users of PTC’s Thingworx Retail Connector, which allows almost any enterprise system to be integrated without the need for bespoke customization work.
“At Deckers Brands, we rely on the Thingworx Retail Connector to integrate our end-to-end digital product development workflow, which at its core comprises Material Exchange, FlexPLM and RomansCAD 3D,” Mitch Harvey, 3D innovation manager at Deckers Brands, told me. “That universal connectivity across our business gives uses the edge when it comes to competing in a challenging global economy, because we now have a collaborative engine and ‘digital thread’ providing one source of truth across all roles including the supply chain, which enables us to improve time-to-market and meet the needs of our customers.”
In early 2021, as Covid-19 continues to disrupt every facet of retail, every business has been repositioned on the same starting line, with the common goal of reaching a digital-native shopper as quickly and profitably as possible. And while every business is fighting to secure their future in an uncertain world, the same challenges that are putting unprecedented pressure on the retail industry are also proving to be catalysts for new levels of inspiration and innovation.
While other PLM solution providers have scoped just some of the steps retailers will need to take to emerge from this crisis prepared to compete in a digital-native future; PTC has had the vision to map the entire end-to-end process, and we have both the expertise to see it through, and the technologies to support our customers’ unique challenges and opportunities.
In part two of this series, I will go into greater detail on each of the five key pillars (outlined above) and explain what you can do to work@digitalspeed, but if your business has already begun reevaluating its processes, legacy platforms or priorities as part of a digital transformation project or as a response to the pandemic, we will be happy to talk about how our vision can enable your business to compete more effectively today, and then to drive long-term sustainable success in better times.
Please email email@example.com to learn more!
About the Author
Bill Brewster has been in technology for more than 25 years, leading product development, marketing and sales teams. For the past 15 years, he has been a president and general manager, leading global businesses delivering software solutions to the retail industry, primarily in PLM, Supply Chain Management, 3D Design and CAD. Currently, Bill is senior vice president and general manager for the Retail Business Unit at PTC (Nasdaq: PTC), where he is responsible for all aspects of the business including formulating the strategic direction, delivering market leading solutions, maintaining an open dialogue with customers and partners, and driving organizational success. Bill has a bachelor’s degree in engineering from the University of Connecticut and a master’s in technology management from the University of Pennsylvania, The Wharton School.