FAIRCHILD’S CEO SUMMIT
INDUSTRY LEADERS THRASH OUT MERITS OF CREATIVITY VS. CAUTION
Byline: David Moin / Miles Socha
CAREFREE, Ariz. — So spring fashion is on a roll, the stock market is still flirting with historic highs and retailers are raking in the profits. How much better could it be?
Quite a bit.
From the bucolic desert resort setting of The Boulders here just north of Phoenix came an urgent call for change from a field of heavyweights representing every sector of the fashion industry, at the second annual Fairchild Apparel CEO Summit last week.
There was Ralph Lauren railing against department stores’ lack of selectivity. There was Bloomingdale’s Michael Gould calling for an end to operating procedures that make love-hate relationships out of what should be partnerships between stores and vendors. And then there was H. Lee Scott Jr. of Wal-Mart admitting that the world’s largest and mightiest retailer struggles to stay in-stock on key items. “The consumer is more motivated to buy than we are to sell,” Scott declared.
Once again, the CEO Summit put the apparel industry under the microscope, and what attendees saw was an industry that’s out of sync with America’s robust economy and out of touch with its consumers.
Of the 300 plus that came to the Boulders, it was a time to refocus on the consumer, take in the latest research that shows shoppers are still dissatisfied and harder than ever to please and to grapple with perennial problems and issues, like chargebacks, price credibility, sizing, service and providing real value.
Almost half of those who go shopping for clothes leave empty-handed each time they visit a store, according to market research by Kurt Salmon Associates, commissioned especially for the Summit.
Of the consumers surveyed by Kurt Salmon, 61 percent said they can’t find styles they like and 62 percent said the clothes simply don’t fit right.
The challenge of motivating this hardened, time-impoverished consumer to shop was heard repeatedly at the 2 1/2-day event.
Several speakers hammered home the importance of perpetual research and sell-through analysis, developing customized products based on the findings and focusing intently on the target consumer. The mantra: Think small, even if you’re big. And the hot buzzwords: one-on-one marketing. Paul Charron, Liz Claiborne’s chief, says his company lives and breathes on research.
“Really, capturing customer knowledge will be the next breakout in the industry,” said Harvey Braun, chairman of the Deloitte & Touche retail and distribution services group. “The technology is there, but the industry hasn’t really embraced it. It’s spotty in retailing.”
But as the conference progressed, contrary opinions surfaced, with executives urging manufacturers and retailers to step out and lead the consumer, instead of following her.
The new mantra: Be true to your point of view. Enough of the research.
And the emphasis on marketing shifted for some to “risk-taking.”
That point of view was articulated most passionately by Ralph Lauren, who said his business was built on his creative instincts, not some overriding desire for money.
“You can’t look at a computer,” he said. “You can’t look at focus groups. You need the talent and you need a point of view,” Lauren said.
In essence, the Boulders meeting was “yet another industry wakeup call,” said Arnold Aronson, managing director of retail strategies for Kurt Salmon.
“For all but a few of America’s retailers and suppliers, market share is shrinking dangerously, and much of it because the newly empowered consumer is voting against most stores’ lack of responsiveness to their needs and expectations. And equally disquieting, other industries, like travel and entertainment, are rapidly displacing apparel dollars — maybe permanently.
“It remains to be seen whether all the well-intentioned rhetoric can effectively be transformed into truly differentiating and result-producing strategies.”
As Mindy Grossman, president of Polo Jeans Co., said, “The question is, how do we work to continue to define individuality in a compressed environment?”