SEAMS Conference Addresses Waves of Change in U.S. Manufacturing
There was an air of palpable confidence and excitement about future of the U.S. textile and apparel industry at this year's National Association for the Sewn Products Industry's (SEAMS) networking event. The lure of a beautiful long weekend in sunny Myrtle Beach, S.C., from Sept. 29-Oct. 1, brought together representatives from more than 82 American textile and apparel manufacturing companies to learn about current topics and opportunities and to forge connections in the industry.
The theme, Riding the Waves of Change, was appropriate given both Myrtle Beach's seaside location and the rapid changes happening in the domestic textile and apparel industry. Changes were first and foremost in conversations and the topics the presentations, which ranged from advanced fibers to support for wearable tech made in the U.S. to reshoring, to American-grown hemp fibers and insight into retailing for the next generation.
Jerry Inman, CMO of Demand Worldwide, a boutique marketing agency for technology companies and a specialized consultancy for brands and retailers, kicked off the conference with a presentation entitled "Retail Rebels – Who Will Conquer the Connected Consumer." Inman laid out the keystones for understanding Gen Z and what the industry needs to know about the generation with $200 billion in spending power who rely on smartphones for just about everything and have an eight-second attention span.
According to Inman, retailers have been trying to figure out Millennials, who are aged 21-39, but actually, we need to shift our thinking to the Gen Z'ers who are 21 and younger and now comprise 26 percent of the population. This may seem like an unusual topic, given the audience was mainly textile and apparel manufacturers, but their worlds and those of their end consumers, traditionally brands and retailers, have been turned upside down over the past decade. This downturn includes a 39 percent decrease in teen mall traffic, an indicator of the changing retail preferences of the next generation.
There are numerous factor that affect this decline, including a slew of niche competitors enabled by easy access to e-commerce platforms, product information and sourcing options that have made creating a brand easier than ever. In fact, several manufacturers in the room mentioned that they are already selling directly to consumers under their own brands. Along the same lines, Inman shared that, "Amazon has been quietly opening up seven brands that no one has ever heard of and in 2017 they will sell more apparel than Macy's. In 2010 they sold us nothing in apparel, but in 2020 they want to own more than 15 percent of apparel sales in the U.S."
This seems an obvious next step as platforms such as Amazon have given control to all consumers to practice the now ubiquitous art of IWWIWWIWI (I Want What I Want When I Want It) with a single click. Innovative, disruptive companies already know many of our buying habits, and combined with AI and recommendation engines, they can likely run reports to predict WWWWWWI (what we want when we want it).
Inman remarked to the room full of mainly Baby Boomers, Gen Xers, and members of the Swing Generations that, "Because of the social technologies and things like Periscope you go to a runway show and it's immediately available and can be seen by everyone" and this enables seasonless storytelling, which he explains could be great for the domestic apparel manufacturing industry. Because of this instant availability of video off of the runway, brands and retailers want to develop products more quickly. Align this with the fact that Gen Z wants information about where products are made and this "means an opportunity for brands that are authentic Americana," he said.
Part of the downturn that mall and big-box retailers and brands are experiencing could be related to the lack of an authentic experience that aligns with the values of the Z generation. According to Inman, the number-one trusted brand is Urban Outfitters. Part of this is the retailer's Wi-Fi connections and unique assortment of items making each store stand out. Apparently, Gen Zers also love Starbucks, which when you think about it, is mass customization, on demand, just using a coffee platform.
Gen Zers are now 26 percent of the population, and they've always known how to pinch, zoom and swipe as 85 percent have had at least one mobile device since the age of 5. Inman goes on to predict that 72 percent will start their own business and 76 percent are concerned about humanity's impact on the planet. Unlike the stereotypical Millennials who are often portrayed as glued to their smartphones, Gen Z has some dichotomies: they like to volunteer, are more community-oriented and they enjoy face-to-face meetings. Inman says Gen Zers are "opinionated and digitally connected" but they will have 10 apps or less on their smartphones, and he encouraged the audience to think about the multifunctionality of the WeChat app as to how "appspectations" are evolving.
Sounds like the consumer will continue to remain in charge in the future and we all need to be planning for the Zs, however taking the pulse of the current state of things is also important for the industry to remain relevant.
Next up was the session entitled "Supplier Perspective on Current Status of Reshoring and Expectations Going Forward," which was moderated by Rick Ludolph of Productive Solutions and featured panelists Frank Henderson of Henderson Sewing Machine Company; Mike Meyerholtz of Milliken & Company; Brad Mikes of Incentive Payroll Experts; and Matt Poovey of Champion Thread Company. Ludolph asked the group if they've noticed that reshoring is actually happening in the industry. This was answered affirmatively by most on the panel, but the consensus was that it is happening slowly. Henderson made the point that Adidas and Under Armour were creating fast prototyping and quick-turn factory models in the United States and that New Balance has continued to have five domestic manufacturing sites.
However, a lot of this was designed to be more automated than factories of the past. Meyerholtz remarked that for Milliken, automation has meant survival and continued value add to its customers. For one of its spinning mills, Milliken has 36 employees where, he says, it probably had 300 people in years past. Due to investment in automation the mills have the same output but with many fewer and more technical employees.
Henderson reminded the audience that due to the continually decreasing cost of technology, a robot can be bought for less than a typical sewing machine operator's year's salary. Despite the availability of greater automation in apparel manufacturing, the panel and many in the room voiced the need for skilled technicians that are mechanically, engineering and digitally educated. According to Henderson, if more people with these skills were available, then reshoring would be happening a lot faster. For both automated and traditional machinery, the lack of these skill sets in the industry is dire. In response to a question from an educator in the audience about what students need to learn, the group responded that they need employees with a problem-solving mindset who are able to figure out the variety of issues that manufacturers need to resolve on a daily basis.
There was an impressive amount of technical textile knowledge and future thinking throughout this SEAMS event and despite the ups and downs of years past, it sounds like the next generation of U.S. manufacturing could have a lot of potential. If the industry continues to have these types of conversations about how we can all work better, faster and smarter together, and act on them, then it could mean big wins for U.S. manufacturing and consumers alike.
Kilara Le is on the consulting staff for LMI, a management consulting company. Will Duncan & Associates is an apparel consulting firm.