Alvanon said today that its president and global fashion business expert Ed Gribbin will participate on a panel at the Apparel Sourcing Summit at MAGIC in Las Vegas on Aug. 15.
The session is titled “Sourcing 2020: Winning Through a Continuously Evolving Sourcing Strategy.” For his part, Gribbin said “managers from every sector and geographic region of the fashion business have a stake in the ways our industry embraces disruption, innovation and change.”
“Ever-increasing customer demands for factors like speed to market and enhanced customer engagement will either propel our businesses to greater prosperity or leave them struggling in the past,” he added.
Here, Gribbin discusses some of the major trends in the market and how a “consumer-centric” environment is impacting business as well as where opportunities exist for retailers and brands.
WWD: What are some of the emerging themes you are seeing in the retail market?
Ed Gribbin: There are a number of themes emerging in retail fashion today and they generally fall into one of three areas: one, the need for more continual and impactful customer engagement; two, the desire to leverage new technologies to enhance both the top and bottom lines, and three, the increasing impact of sustainability and social responsibility issues on business decision-making.
To more intimately and continually attract and engage customers, retailers are focused on getting faster at developing product. Speed to market seems to be the number-one topic across all segments of the apparel/fashion world. While traditional new product development cycles stretch out to 18 months — many retailers have already launched development of their collections for spring 2018 — retailers are finding that customers are gravitating toward stores, sites or apps that are always launching new, fresh, “of the moment” products.
Brands can no longer rely on having two big seasons a year and keeping their customers’ attention. New and frequent capsule collections have been proven to attract and keep consumer attention. Whether it’s the success of fast-fashion brands or the ‘see-now-buy-now’ movement sweeping the luxury segment, traditional retail is threatened and slowly responding.
WWD: How is technology redefining the market?
E.G.: In terms of new technologies, retail analytics tools both in store and online are helping retailer’s select, buy, price and promote the products consumers really want. Using real-time data to know when and by how much to discount a product is bringing significant lift to both sales and profitability. Radio frequency ID tags sewn into garments are enabling much more sophisticated inventory management and omnichannel fulfillment strategies.
And the use of new 3-D “virtual” product development software is enabling retailers to develop product faster, enable greater consumer personalization of products, and even test products with consumers “virtually” before producing anything. Having the right product, in the right amounts, priced correctly, when the consumer is ready to buy will yield higher sell-throughs, fewer markdowns and a significant boost to the bottom line.
WWD: There are also significant changes occurring in the labor market, correct?
E.G.: As labor prices continue to explode in China, the number-one exporter of apparel to the U.S., and more Chinese manufacturers are finding that selling to the rapidly growing number of middle class Chinese can be more lucrative than exporting, retailers have been forced to search for other sources of cheap labor. This has created a ripple effect of additional issues, from significant negative environmental impacts in countries with fewer rules and infrastructure capabilities than China to slave or child labor and numerous other human rights issues.
Most major brands and retailers have joined the Sustainable Apparel Coalition in recent years and some of the largest formed the Alliance for Bangladesh Worker Safety. Both organizations are having a positive impact but progress is slow and fraught with challenges. As a result, more and more retailers are deciding to source products closer to home even though the costs are higher. Greater supply chain transparency is not only critical to a brand’s reputation and top of mind with more industry leadership, it is being demanded by more and more consumers. Luckily, an ancillary benefit of sourcing in greater proximity to the customer is shorter production and freight times.
WWD: What does it mean to be a retailer in a consumer-centric environment? What are the challenges?
E.G.: Consumers are far more empowered today than ever before. The retailer once owned us, the consumer. If you wanted a piece of apparel, you had to go to a store when that store was open, look at the selection of merchandise that some merchant decided you would want to buy and, if you found something you liked, hopefully they had it in your size.
Technology has turned that around. Today, the consumer is the center of everything and they hold control of the retailer in their hand or in their pocket. Many of our retail business models are broken today and some beyond repair. We take far too long to design and develop product, too long to source it and too long to ship it back in a boat from halfway around the world.
There are “disrupters” today who are finding different and better ways to serve the customer, and these new ways have traditional retailers shaking. They are developing product “virtually” in 3-D to cut time to market, they are sourcing locally, and they are personalizing product in ways that most retailers could not imagine. They also tap into big data insights and they excel at logistics. Zara has become the largest apparel retailer in the world by eschewing boats for air freight and manufacturing more than half of their products “locally” in Europe, the Middle East or North Africa.
By June of next year, Amazon will surpass Macy’s as the largest seller of clothing in the U.S. In 2010, they sold virtually zero clothing.
WWD: Given the current market, what are some of the opportunities — from your perspective — available to brands and retailers?
E.G.: Fresh ideas, risk taking, cultivating technology-savvy talent and creating a “culture” of innovation are the essential dynamics necessary to prosper in today’s rapidly changing and increasingly tech-driven fashion marketplace.
Innovation and omnichannel engagement were key themes at this year’s World Retail Congress. Yet less than 30 percent of retailers today are equipped to bring a full omnichannel experience to their customers. Too often, they don’t have RFID, they can’t track inventory, their logistics are not up to speed, and their customers are getting frustrated and deciding to shop elsewhere.
Ideas are the currency of the future of the business of fashion, but ideas without the talent to test, refine and execute them are not very helpful. We need to train and educate our people, encourage “smart” risk-taking and even reward failure. We must seek out the right talent to use new technologies and we need to collaborate with our suppliers. Without the right people, properly trained, motivated and incentivized, and without the right relationships with our supply chains, we will no longer be able to understand, engage and delight our customers.