A Wakeup Call to Fashion Retail: Let's Get Radical

It's no secret that the fashion industry is still struggling to find strong solutions to meet today's consumer expectations. The stakes are high. Shoppers want frequent selections of new styles and the ability to get apparel anytime, anywhere.

To be consistently competitive, apparel companies must make radical changes that may seem shocking for some.

Stop the insanity
The retail industry is insane. That was the gist of what Marshal Cohen, chief industry analyst for The NPD Group, told the board of the American Apparel & Footwear Association. He defined "insanity" as doing the same thing over and over but expecting a different outcome. His point was that retailers continue to follow a traditional merchandising cycle, offering spring merchandise when it's still winter and autumn clothing when it's still summer.

Yet more than ever before, consumers expect to find the right products when they need and want them. To offer them anything else is confusing and ineffective. Doing so with an ongoing expectation for profitability is crazy!

The fashion industry's repeat performance of "time-tested" best practices is floundering. Major U.S. mall anchors are shutting stores, net profit margins are down from the double-digits to the 6 percent range, and the average apparel conversion rate of shoppers to buyers is only 2-3 percent online and 19 percent in stores. Average returns due to apparel fit, across online and in-store channels, are at 40 percent. NPD Group survey data shows that only 17 percent of consumers are happy with garment fit.

Embrace radical changes
In short, we are doing something wrong. The good news is, there is a way forward to solve these big challenges, but it requires a radical mind shift in the way retailers and brands think about fashion product design, merchandising, development, production and delivery.

Many technology providers have been working on solutions aimed at fit. There are novel apps, body scanners, virtual fitting rooms and fit-focused software. Some are making progress, but none of the releases are radical enough to have made a meaningful difference yet. Most of today's solutions take new thinking and apply it to the same, old problems, but without considering fully how today's consumer can, and wants to, engage with fashion.

Instead, the industry needs radical thinking. "Radical" comes from the Latin word for "root." We have to employ radical new approaches to get to the root of the biggest problems. Every fashion business wants to address the primary root challenge: providing consumers with fashion that inspires, satisfies and fits them, exactly when they want it, and keeps them coming back for more.

How can we "get radical?" A good place to start is to look very seriously at the business processes of successful design-focused firms like Apple. Some apparel professionals might roll their eyes, thinking, "Apple is in a completely different stratosphere than our business." Yet design and supply chain challenges are quite similar between consumer electronics and fashion. Both have long lead times, multiple prototype phases and secretive processes. Neither industry wants to disclose to consumers what it is going to sell until the product launches.

How does Apple do all of those things differently? It thinks differently. In the fashion world, our design stage has been weakened because we insist on confining it to the status of "art." And we don't know when to stop designing. In fact, we  re-design and re-merchandise so far into the product development calendar that we continuously diminish our chances of being fast, current and relevant. At Apple, design is science. At Apple and other consumer electronics companies — indeed at most technology, aeronautical, automotive and furniture companies — the words "design" and "engineering" go hand in hand. As the late Steve Jobs once said: "Design is not just how it looks — design is how it works."

An ideal fashion development cycle would start with deciding on an aesthetic look and the fit intent for the merchandised line plan. Most of this work can be done in 3-D, in the virtual world, today, much like it already is in other more complicated consumer products. Then it would move quickly into a one or two-prototype approval process and then into production. Fittings would no longer be treated as re-design or re-merchandising sessions, stealing valuable cycle time.

5 rules for reinvention
Radical change will take some time to implement, but it's important to start the reinvention process now. Here are five rules to guide the way.

1. Aim high but know your limits. Change your processes without changing your brand DNA, the fundamental things your customers love. For instance, some brands try to reach too far and shift their consumer demographic, making their fit skinnier or more modern. Whatever changes you make, it's important not to destroy the loyalty of your current customer base.

2. Disrupt and shake things up. Think about the unthinkable. For example, would it be too bold to instantly and unobtrusively scan consumers who opt-in when they enter your store, or shop online to gain valuable analytics and insight on your shoppers' key demographic and body size and shape characteristics, as well as their personal style and preferences? The technology exists today to do just that. Could you use that information to radically improve conversion, sell-throughs and customer retention?

3. Go virtual. Virtual product development is here. Leading fashion businesses are radically cutting time to market with 3D design, merchandising and development tools.

4. Rethink sourcing. Bring it closer to home. The management consulting firm McKinsey & Company  refers to "next sourcing," or going to sources in proximity to market, but only if they offer maximum innovation.

5. Reinvent design as engineering. A robust technical foundation is important — core body standards, grade rules and a reliable pattern block library that accurately reflect your target customer base.

With regard to all of these rules, it's critical to maintain product lifecycle processes and data that are real-time, accurate, transparent and secure. The road to radical change might be rough at times, but it's a sane, scientific approach that will actually unleash creativity, boost speed to market and fuel growth.

Ed Gribbin is president of Alvanon Inc., a management consulting firm serving the global apparel industry. Since 2001, Alvanon has leveraged data-driven knowledge to equip leading fashion retailers, brands, designers and manufacturers with world-class growth, customer engagement, product development and supply chain strategies. 
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