Time might be money, but in fashion, it’s also relevancy.
And in the broader scheme of things, that could be even more important.
The fast-fashion chains helped reset consumer expectations over the past 15 years, getting goods to market quicker and more frequently switching styles, delivering new and in-demand looks to customers at the right time.
While the revolution in speed came and others embraced it — think Amazon with its Prime two-day shipping — much of the traditional apparel industry is still trying to catch up.
To take stock and start to develop a lexicon of speed — so everyone is singing from the same hymn book — consultancy McKinsey & Co. checked with the market and developed a new series of biannual reports, the first of which is titled, “Measuring the Fashion World: Taking Stock of Product Development and Delivery.”
WWD received an exclusive first look at the report, which is based on a survey of 54 key apparel executives, collectively responsible for more than $110 billion in revenues.
The results show that while there is a widespread acknowledgment that companies need the skills to bring goods to market quicker, there is plenty more work to do on the back end of the business.
“The way we sell fashion today is very different from the way we used to sell fashion 10, 15 years ago,” said Achim Berg, leader of the consultancy’s global apparel, fashion and luxury group and an author of the report. “The way the industry develops product and brings it to market is pretty much unchanged for 15 years.”
There have been some efforts to nudge the industry to move quicker — the see-now-buy-now movement that convinced some designers to start selling looks from the runway was a part of that.
“Everybody understands change is required,” Berg said. “You cannot just change the front end and tell the consumer we’re now hip and fast and do some social media stories. You cannot fix it with just marketing.
“The change needs to come from the top,” he said. “It’s not going to be a bottom-up movement where product people say, ‘Now, let’s become faster.'”
According to McKinsey’s research, the key challenges insiders see for their businesses include:
• A lack of accurate demand planning and forecasting.
• A lack of digital tools and capabilities.
• The speed at which new products are brought to market.
McKinsey identified four types of business models, vertically integrated players such as Primark; hybrid companies like Ralph Lauren with both wholesale and retail operations; multiple brand retailers with online and offline operations like department stores and online pure plays such as Zalando.
It is the vertical players that set the pace.
“Vertically integrated players are 36 percent faster on average than hybrid players in the overall duration of the go-to-market process,” the report said. “The hybrid apparel players in our survey sample averaged 44 weeks for the end-to-end process, compared to 28 weeks for vertically integrated apparel players.”
The vertical players can move quicker because they don’t have a “sell-in phase” that includes back and forth with the wholesaler, which some are trying to streamline with technology.
But the seasonal selling process is not the only factor in speed, and McKinsey pointed to using different processes for different types of goods as key. For instance, companies can move swifter if they have one method for seasonal goods, but another for in-season replenishments, or a fast track for additions and another approach for core goods that should never be out of stock.
And the report highlights the importance of merchandising — a sometimes fuzzy term that McKinsey defines as the process of “delivering appeal products in the right quantity, at the right time, at the right price, with optimal presentation.”
While design has long been seen as leading the processes and decisions, McKinsey said the merchandising team is increasingly taking the lead.
“Although there are still many companies in which the go-to-market process is being led by design or analytics functions, merchandising has the distinct advantage of being able to act as a translator between the two worlds of art and science,” the report said.
And with more data at the ready and more analytical tools to parse that information, the industry has the opportunity to increasingly use science to move faster.
But not everyone is on the go.
Berg said fashion companies today fall into three main groups in the speed-to-market race. Lagging behind are those with their “back to the wall” with a brand that’s not performing and not relevant. Leading the way are the brands that have the mindset of continuous change and businesses that are already performing well.
In between is “a very large field,” he said, where some are paying lip service to change or making small adjustments and hoping they do the trick.
In the end, Berg said the question is how many in that large group in the middle will push to change and become leaders and how many will fall back and find their back is against the wall?