Ongoing trade wars, evolving technologies, the emergence of near-shoring and the demands for greater sustainability across the entire supply chain were some of the central themes presented at this year’s Sourcing Journal Summit, New York edition.
Sourcing Journal is a sister publication of WWD. Both are owned by PMC Media.
Close to 450 attendees convened at the summit last week where speakers shared their perspectives on these trends, which revealed radical changes in the supply chain. Topics explored included: can deploying sustainability practices be profitable? (the short answer is yes, but it’s complicated); mitigating “collateral damage” from ongoing trade wars; the future of retail; the impact of digital transformation, and the future of apparel sourcing and production.
Companies that spoke at the event hailed from Under Armour, Reebok, Google, McKinsey & Co., Mas USA, Saitex, Li & Fung, PVH and First Insight, among many others. Attendees included senior-level executives from Target Corp., TJX Cos., Zumiez, Guess Inc., Calvin Klein, Foot Locker, Macy’s, Talbots and Everlane, among many others.
Keynoting the event was marketing professor Peter Fader from The Wharton School along with Neil Hoyne, head of customer analytics at Google. The pair discussed the evolution of customer lifetime value, or CLV, and how data can be used to help companies increase loyalty and conversions — and even be used to create future consumer behavior models.
During the session on the profitability of sustainability, the speakers agreed that deploying sustainable practices is a necessity, and is now being driven from the “top down” at companies across the supply chain. But there are challenges. Many factories say they’re sustainable, but don’t have the right certifications. Or worse, are falsifying certifications. Either way, the panelists said implementation requires transforming a company or brand, and having “boots on the ground” is essential.
The panel session on trade wars focused on China and how other countries can compete. The tariffs imposed by China and the U.S. are seen as long-term tactics. And the speakers said is it impacting many products — from footwear, handbags and accessories to garment hangers, plastic tags and hang tags. And over time, higher costs imposed by tariffs will impact the prices consumers pay for products.
With the session on the future of apparel production, Karl-Hendrik Magnus, a partner at McKinsey & Co., painted a picture that is complex and rapidly evolving. Magnus presented data from a recent report on near-shoring and automation.
Authors of the report set an ominous tone in their findings, stating that tomorrow’s successful apparel companies “will be those that take the lead to enhance the apparel value chain on two fronts: near-shoring and automation. It cannot be just one of them and it must be done sustainably. Apparel companies can no longer conduct business as usual and expect to thrive. Due to the Internet and stagnation in key markets, competition is fiercer than ever and consumer demand is more difficult to predict. Mass-market apparel brands and retailers are competing with pure-play online start-ups, the most successful of which can replicate trendy styles and get them to customers within weeks.”