Pink Sheets, 3D Meats and Flying Jeans Take Center Stage at Apparel Executive Forum

10/15/2013
It's rare that a CIO gets to start with a clean slate in building a company's technology infrastructure, but that's just what Lee Goldenberg, CIO of John Varvatos, got to do. It was a "dream opportunity," and the results have been no less spectacular than envisioned.

Attendees at Apparel's Executive Forum earlier this month were treated to the story of the from-the-ground-up IT build behind the scenes and in the retail stores of the ultra-high-end rock-n-roll fashion brand, whose eponymous founder was known before starting his own label for launching the men's collection and cK brand at Calvin Klein and for creating the Polo Jeans Company at  Ralph Lauren.

Other speakers at AEF included Mike Fralix, president of TC2, and Nadia Shouraboura, founder of Hointer.

The 360-degree rock star experience
John Varvatos the man has a longstanding and deep love for fashion, but even greater than his passion for fashion is his love for rock-n-roll, and when he set out to build his own label, Varvatos created a brand whose very DNA was infused with rock-n-roll. Goldenberg describes walking into Varvatos' office as akin to stepping inside the Rock n Roll Hall of Fame, with its top-to-bottom signed memorabilia from an endless stream of famous rockers ranging from Led Zeppelin to Bob Dylan.

That spirit pervades everything about the brand from its marketing campaigns (its most recent TV commercials feature a variety of aging rockers paired with young rockers — such as Willie Nelson and his sons, and Jimmy Page and Gary Clark Jr.) to the very, very affluent customer it serves, many of which are famous rockers and other celebrities whose wardrobes are custom made by the company.

Because of the high-end customer it serves, the company has very different needs and wants from your average apparel business. "Our customer is someone who spends $15,000 at a clip, and everything is set up to serve this customer. We are truly a lifestyle brand. Anything you could wear, we produce," says Goldenberg.

In breaking away from VF Corp. last year (John Varvatos was acquired by Lion Capital), the brand had the opportunity to start from scratch, and to provide the same "rock star experience" it provided its customers to its IT users. Explains Goldenberg: "A rock star can go to a hotel and demand pink sheets, Stoli in the fridge, and brown M&Ms, but then he has to go out on stage and perform." That same philosophy it chose to apply within the company relative to IT: "We will give you what you need. But you have to perform."

John Varvatos was not only in a position to start from scratch, but also had the size and cash to get everything it wanted. Top of the list? The entire IT infrastructure is all cloud-based. "Headquarters could blow up, and we could keep working," says Goldenberg. Unfortunately, the company got proof of this when Hurricane Sandy tore through town and its office was inaccessible for five days. "We could do everything from home on our iPads," he says. Networks, applications, email, everything is available from anywhere, any time, on any device, adds Goldenberg.

As for selection and implementation of new systems, Goldenberg wanted solutions that would enable staff to work with the data, rather than constantly create it. "I found over the years that we all spend so much time creating the data, that no one ever reads it because the next week's data is already available," says Goldenberg. In a four-month period starting in November 2012, the company brought up its network and converted to new ERP, retail, POS, CRM, back office and warehousing systems — with a team of just four people, and a lot of help from the vendors.

The goal is for everything it does to be suited to the task, and for everyone to have what they need, so that they can focus on the brand and not the technology. For example, all printers have been replaced with the highest-end versions and calibrated so that what designers see on the screen is identical to what comes out of the printer.

The result of giving everyone what they need, and enabling them to work from anywhere, is that everyone is much happier. Meetings are much shorter and more productive because people bring their laptops to meetings, have access to the most recent data, and take care of business as it is happening.  People spend less time at work, and more with their families and friends, and are not tied to their desks anymore. "This has brought tremendous energy to the company," says Goldenberg.

What tomorrow will look like is anyone's guess, but the company is looking to transfer some of its responsibilities outside its four walls to factories, mills, agents and freight forwarders by giving them access to its systems. In its rollout of PLM, likewise, the company is involving the factories from the start, so, for example, if an adjustment is made to a pattern, the change will be reflected instantly at the factory producing the garments.

The company is also working on a mobile clienteling system that will digitize the "little black book" to allow its salesforce to see everything a customer has bought, and make suggestions about what will match.

Imagining the future
With the pace of change rapidly accelerating, no business can survive these days without taking active measures to anticipate the future and work to ensure it is ready for whatever may be thrown its way. That was the message from TC2 president Mike Fralix, who challenged the audience to think about emerging cultural shifts and emerging technologies, how they will influence each other, and how they will change the world around us.

For example, the trend toward digital creation for items such as music, newspapers and airline and concert tickets has created new expectations among consumers relative to how quickly they will receive things they buy online — even non-digital products. While today people may be willing to wait two or three days, in the future, consumers will expect product in less than 24 hours.

And while today digital products are generally limited to non-physical content that can be "shipped before it's manufactured" — for example, USA Today "ships" its newspaper content digitally and then converts it locally to actual newspapers — crossover into the "physical" world is happening in myriad ways. In apparel, for example, virtual 3D technology that renders the fine details of a garment, including how the fabric drapes and moves with the body, offers the opportunity for apparel to be sold before it is manufactured, while virtual dressing sites and body scanning technologies are allowing improvements in fit — and convenience — for the customer. Beyond the virtual world, advances in 3D printing are enabling digital creation on demand to become a reality when it comes to the types of products you can hold in your hand.

3D printing is a form of additive manufacturing, or manufacturing that builds up, rather than subtracts from an already existing substrate, and while it is not new — think knitting vs. wood carving — today's advanced 3D printing technology puts additive manufacturing in a whole new light, offering opportunities to create in an entirely new — and much more sustainable — way. Three-dimensional printing — which creates a 3D object by "printing" it layer upon layer — opens virtually limitless possibilities for shifts in manufacturing — and shifts in perspective — toward small batches and custom-designed goods. 

Just a few objects already printed with 3D technology include a small remote-controlled plane, which flew for 10 minutes; various ceramics; and apparel including bikinis, component parts for dresses (by Iris van Herpen) that are then assembled, and the very first dress entirely made on a 3D printer, from Michael Schmidt.

"It all starts with the thinking. If you can open your mind and think about it, then there is a good chance that a lot of it can happen," says Fralix.

The perfect blend: online and bricks and mortar
That well describes the development of Hointer, the brainchild of Nadia Shouraboura, who, after working for Amazon for 10 years and believing that everything would eventually be bought online, found her shifting thinking after Amazon launched apparel. She saw that while the experience was good, it was not great, and that when many apparel shoppers opened their boxes — despite reviews, twirling models and detailed explanations of sizing trends — their expectations were often not met.

Stores allowed customers to feel and touch and try on, but stores weren't perfect either, with their piles of clothing and racks, the need to dig for sizes, and perhaps most problematic: the dressing room experience. In addition to "lugging your clothes around … when you are standing there naked, to get a larger size is a pain in the neck, you have to get dressed again, go back out, or get a sales associate." The checkout experience, too, is less than stellar, focusing the sales associate on ringing up purchases instead of focusing on style.

That got Shouraboura to thinking. What if you could blend the best of both worlds?

Out of that concept was launched Hointer, an apparel retail store featuring just one of each item, "flying in the air," suspended from the ceiling. Each item is very visible, and the customer can view it in great detail. To learn more about an item (product features, customer reviews, etc.) or to try it on, the customer can simply tap it with a cell phone (having first downloaded an app).

Items are automatically delivered to assigned dressing rooms through "chutes," so when the customer arrives, everything is already there, and as the customer tries clothing on and decides against it, she simply drops it in the return chute. As the items come in and go out of the dressing room, the activity is automatically recorded, so there is no need to check out. The customer simply walks away with whatever she wants, and the charge is conducted automatically, or via credit card on a tablet in the fitting room. "This sounds futuristic, but it's not!" says Shouraboura.

This has made for an easy and fun try-on experience. Clothes come and go without hassle, and should you want a different size, you can just tap and request. Hointer opened its first store in Seattle, and has since opened two more, (and also has partnered with Levi on several pop-up stores), tweaking and perfecting the technology as it went along to better accommodate customers (for example enabling them to see all inventory in the network, and where it was), eliminate bugs (such as sending two customers to the same fitting room) and to eliminate theft (which it did in part by inviting people to try to steal its clothing — it lost quite a bit, but it learned, and now theft is not an issue).

The store has been a smashing success through nothing but word-of-mouth marketing. It launched as a men's-only store, featuring only jeans but has since expanded to include women's and other categories of apparel.

Without clothes to fold and put back on the retail floor or purchases to ring up, the sales force is free to assist customers on the floor with selecting the styles and outfits that best suit them.

From a technology perspective, the IT is entirely in the cloud, and there is no hardware in the store — associates run everything off cell phones or tablets. Inventory is packed "sardine-like" into what is essentially a tiny "micro-warehouse" built on the opposite site of the dressing rooms, so items that are selected are delivered within 30 seconds to the customer.

The no-racks and no-piles format allows Hointer to operate in a space five times smaller than a traditional store and requires far fewer sales associates.

Customers like the ease of the mobile in-store shopping experience, and because it is so easy to try on more items when you're already standing naked in the fitting room, customers try on more, and rarely leave without at least one purchase, says Shourabura.

Jordan K. Speer is editor in chief of Apparel. She can be reached at [email protected].

Editor's Note: Look for more reporting on the Apparel Executive Forum in next week's newsletter.
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