'Mandate for Change' is Message at Material World Headliner Event

Successful executives across the globe aren't simply dealing with change; they are initiating significant changes in their business models in order to best serve consumers of the future. 

That was the message at the Technology Solutions Headliner Event, "Get Ready for a Smaller, Flatter, Smarter World: A Mandate for Change is a Mandate for Smarter Fashion," at the recent Material World & Technology Solutions show in Miami, FL, held April 21-23.

Co-hosted by the American and Apparel Footwear Association (AAFA) and IBM, the session was presented by Guy Blissett, senior management consultant for IBM Global Business Services. 

Citing a 2008 IBM survey of more than 11,000 CEOs (which involved face-to-face interviews), Blissett said that 83 percent of the executives felt that "substantial change" was needed in their particular industry to prosper in the global economy. Moreover, two in three CEOs said they would engage in some type of business model innovation, and closer to home, 50 percent of the retail CEOs said they will invest in enterprise model innovation.  

Driving these changes are several universal themes, including the growth and maturation of populations, the "omniconsumer" and the increased interconnectivity of individuals due to communications technology.

Beginning with the latter, retailers should be aware that 31 percent of customers will tell multiple individuals about a bad store/shopping experience, and 48 percent of consumers will avoid a store based on someone else's experience. Obviously, social networking tools spread these messages like wildfire. (And speaking of which, Blissett said that almost 90 percent of marketers are using social media to market to consumers.)

Blissett describes the omniconsumer as one who is "connected, informed and empowered." Compared to two years ago, 57 percent are more knowledgeable about product content; 39 percent are more knowledgeable about product source; and 70 percent want more information about source and content.

Finally, as wages rise in still developing countries, so too do sales opportunities. For example, said Blissett, China's apparel retail market is valued at $84 billion. What's more, in the 18 to 24 age group, 72 percent of the Chinese would spend more on apparel if their income increased.

Underscoring the need for new and innovative business models are a number familiar industry challenges, according to IBM's research:
* Due to current economic challenges, consumers are spending less on and/or delaying apparel purchases, with four in 10 people earning more than $100,000 buying more store brands;
* Retail shrinkage costs $19.5 billion a year;
* It is estimated that 65 percent of perpetual inventory figures are wrong, "meaning companies are building forecasts on bad data," says Blissett; and
* $93 billion in sales is lost each year due to such factors as stock-outs.

Blissett pointed to recycled clothing as one new opportunity. The average American throws away more than 69 pounds of clothing and textiles per year, with only 15 percent being recycled or re-sold. He added that the ISO is currently developing standards for environmentally friendly garments. 

Susan Nichols is publisher of Apparel.


The 2009 Material World & Technology Solutions show featured 268 exhibiting companies showing fabric, sourcing, technology and logistics resources. Attendees also had the opportunity to get a first-hand look at breaking color and fabric trends at the Material World Trend Pavilions. 

The show's next edition will co-locate with the L.A. International Textiles Show, to be held Sept. 30 to Oct. 2 at the California Market Center, in Los Angeles, CA. Focusing on California's position as a major manufacturing and fashion center, the show will add home fabrics resources and a garment production equipment and machinery section to its traditional categories of exhibits.

for more information: www.material-world.com
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