teodora nicolae marketing manager – fashion & …...- essential in order to remain competitive...
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Teodora NicolaeMarketing Manager – Fashion & Apparel
FROM SUPPY-CHAIN TO DEMAND-CHAIN: New Industry Opportunities and the Growing On-Demand + Personalization Trend
WHYCAREabout on-demandand personalization?
BECAUSEYOURCUSTOMERSCARE.
THE INDUSTRY IS….
C H A N G I N G S O P H I S T I C AT E D FA S T
U N D E R P R E S S U R E P E R S O N A L I Z E D T E C H & D ATA D R I V E N
THE NEWCONSUMER
DIGITAL, MOBILE, SOCIAL MEDIA
LOW BRAND LOYALTY
QUALITY vs QUANTITY
SEE NOW, BUY NOW
ULTIMATE EXPERIENCE
PERSONALIZED BRAND RELATIONSHIP
SUSTAINABILITY & ETHICS
UNIQUEPERSONALIZED
FAST
TRANSPARENT
HIGH QUALITY
MEANINGFUL
strictly confidential
The move towards more ethical and responsible consumption
C are f o r p rod uct
( o r i g i n )
C a re fo r p l a net
C are fo r p eop l e
( s u p p l y c h a i n t r a n s p a r e n c y )
C are fo r f ab r i c
C are fo r p r i ce
( l e s s b u t b e t t e r )
strictly confidential
E v e r y y e a r a r o u n d
1 00 b i l l i on i tems o f c l o t h i n g a r e b e i n g p r o d u c e d
A r o u n d 80 bi l l ion a r e
b e i n g p u r c h a s e d
M o r e t h a n 10% go stra ight to
landf i l l a f t e r e a c h s e a s o n
b e c a u s e w h a t i s m a d e i s n o t
t a i l o r e d t o w h a t c u s t o m e r s w a n t
T h e Av e r a g e U . S
c i t i z e n throws away 81
pounds o f c l o t h i n g e a c h y e a r.
O n l y 1 5 % g e t s d o n a t e d o r
r e c y c l e d
85% goes into landf i l l
Source: : Fung Business Intelligence; Greenpeace
SUPPLY-FIRST = SO. MUCH. WASTE.
A NEWWAY TODO BUSINESS
FROM "TAKE-MAKE-DISPOSE“TO TAILORED TO WHAT CONSUMERS WANT
1990B2B model
1998B2C model
NOWC2B model
P r o d u c t i o n
C r e a t i o n
C o c r e a t i o n
SUPPLY, THEN DEMAND
TRYING TO PREDICT THE UNPREDICTABLE…
RISKY
EXPENSIVE
WASTEFUL
STATIC
$300 billion= U.S. retail’s stock-out and overstock losses
40%= Brands’ losses in markdowns due to long lead times from offshore suppliers
SO WHO ARE THE RETAIL WINNERS?
THOSE WHO BUILD A FASTER, MORE FLEXIBLE SUPPLY CHAIN.
test model – for the riskiest products
read & react – for new and untested products
express cycle – for new in-season products
short-lead - for the core seasonal collection.
long-lead - for basics
SMALL BATCH PRODUCTION TECHNOLOGIES AND MORE PERSONALIZED MEDIA ARE CREATING AN
EXPECTATION FOR PERSONALIZATION
Source: Trends hunter “Mega trends” report
T h e m a r k e t
i s m a t u r e a n d d y n a m i c e n o u g h
T h e c o n s u m e r
v o i c e f o r f e e l i n g u n i q u e ,
c o l l a b o r a t e , c h a n g e t h i n g s i s l o u d e n o u g h
B r a n d s a n d R e t a i l e r s
n e e d t h e n e w b r e a t h t o s u r v i v e
( g a i n c u s t o m e r a c q u i s i t i o n ,
l o y a l t y , m o r e m a r g i n s )
T h e Te c h n o l o g y
i s e v o l v i n g c o n t i n u o u s l y
S t i l l c h a l l e n g e d b y s c a l a b l e ,
t i m e l y p r o d u c t i o n
strictly confidential
cost per unit
COST PER UNIT SOLD.
strictly confidential
Ability to produce/test a larger variety of styles
Reduced risk of overstock and lower rates of markdowns
Eliminate inventory and lower cost of storage/warehousing
Lower up-front monetary investments, freed up cash flow
Faster replenishment / re-orders, ability to respond to consumer demand quickly
CLOSER RELATIONSHIP BETWEEN CONSUMERS AND BRANDS
morecustomer
DATAbrand loyalty
meaningful products = less waste
The ability to create personalized products is becoming a source of differentiation.
Personal izat ion
t he a b i l i t y fo r b ra nds to de l i ve r
pe r s ona l i zed p roduc t s a t s ca l e i s
s e t as a ma j o r g row th d r i v e r a s w e l l a s a s t rong
comp et i t i v e ad v antag e
Source: Euromonitor International, 2018
strictly confidential
BENEFITS OFON-DEMAND +CUSTOMIZATION
WHATDOES THEINDUSTRY REALLY THINK?
Lanieri US Fashiontech Insights - 2017
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YouGOV 2018: Made to Order: An analysis of US consumer perception towards personalization
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The Deloitte Consumer Review // Made-to-Order: The Rise of Mass Personalization
THE STATE OF FASHION 2019: ON-DEMAND
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BoF-McKinsey Global Fashion survey 2019
According to recent survey results published by McKinsey, The State of Fashion 2019,60% of apparel
procurement executives expect that over 20 percent of their sourcing volume will be from nearshore by 2025.
MC
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BoF-McKinsey Global Fashion survey 2019
MC
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Y“Small-scale players will likely lead the way, while larger brands pilot in selected markets. We expect rising take up of on-demand will lead to a spike in personalization, and a new generation of customized clothing start-ups, creating a new definition of “made-to-measure.”
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N “ The demand for and accessibility of made-to-measure brands has grown over the past few years, but the past 12 months have seen something of a boom. In fact, three new brands in this space — SuitKits, Careste and Red Thread — simultaneously launched in October (2018).”
- Fashionista, December 2018
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fashion brand (35%) supplier (19%) retailer (16%)
apparel (82%) accessories (40%) footwear (29%)
textiles (24%)
decision makers influencers44.5% 50%
In what ways is your company moving from a supply chain to a demand chain? (please select all that apply)
49.2% - Creating smaller production runs to read and react to the market
42.0% - Working with factories with quick turn capabilities
37.7% - Creating products closer to market
32.6% - Digitizing to shorter product development time
23.7% - Platforming raw materials
17.4% - Opting to air goods rather than ship
12.7% - None of the above / other
10.6% - Don’t know
If your company or your supplier(s) is planning to make investments or currently doing so, which areas are you/they focused on specifically? (please check all that apply)
61.9% - PRODUCT DEVELOPMENT TOOLS
42.0% - FACTORIES
35.8% - PLM
35.2% - NEW PRODUCTION SOFTWARE
34.7% - LOGISTICS
24.4% - CUTTING ROOM TOOLS
How would you characterize your factories’ ability to produce to demand and/or customize products?
36.0% - THEY ARE EXPLORING WAYS TO UPDATE THEIR OPERATIONS
28.8% - WE HAVE NO INDICATION THAT IT IS ON THEIR RADAR
17.8% - THEY OFFER THIS CAPABILITY CURRENTLY
11.9% - THEY ARE NOT CAPABLE OF WORKING THIS WAY AND LIKELY NEVER WILL BE
5.5% - THEY ARE BRINGING THE NECESSARY MACHINERY AND TOOLS ONLINE SOON
Mass customization is:
42.7% - Necessary but only for certain product categories
29.7% - Essential in order to remain competitive in the future
14.3% - Nice to have but not essential to business
13.3% - The direction the industry is headed in
57.8% - 2 to 5 YEARS
37.0% - 4 to 5 YEARS
22.4% - 6 to 9 YEARS
20.8% - 2 to 3 YEARS
15.9% - 6 to 7 YEARS
6.5% - 8 to 9 YEARS
12.7% - 10 or more YEARS
Mass customization and made-to-measure will be mainstream, common offerings in the next:
Which area would need the most innovation in order to deliver on mass customization and made-to-measure?
45.4% - Production / assembly
25.5% - Patternmaking
10.3% - Sampling
13.3% - Other
5.0% - Cutting
2.1% - Order tracking
What has your company done so far to implement a mass customization business model?
34.9% - We have identified manufacturing facilities that are set up to work in this manner
27.1% - We are investing in product development software
24.0% - We have determined how to make this a profitable part of our business
14.0% - We are investing in our factory partners to get them up to speed
What is keeping your company from being more agile in its product development and production processes?
“Factory partners with true experience and highly skilled workers to accomplish on demand customized production. This is because we are focused on US production too. “
“Factory capabilities, re-orderable trim and fabric, financial investments in logistics and product development.”
“Business habits that were once profitable.”
“Our domestic (USA) production does not have the expertise.”
“Factories attitude towards change from bulk production to cutting/making small runs. Jeans & Tees are the easier ones to make. Factory attitude has to change first.”
“Factories set in their ways”
“Access to manufacturing.”
“Finding a manufacturer who will create MTM garments.”
What is keeping your company from being more agile in its product development and production processes?
“Factories in Los Angeles struggle to compete on cost against offshore factories. So having a more agile system, where they can easily make small runs and customized products, would give them a strong competitive advantage. But good luck getting them to believe this or adapt!”
“Most factories struggle with the changing demands of smaller units quicker turn not to mention one off units.”
“This is all about Mass styles and Small Production.”
The factories have to develop the flexible sample lines in order to be flexible on the variety of the products with small volume.”
“We follow what the manufacturing industry dictates. There is no investment into modernizing factories when it comes to a new approach - other than regarding the topic of sustainability.”
“Priorities & finding the right manufacturing partner to reach scalbility”
TAP INTOOPPORTUNITY
OFFER VALUE ADDED SERVICES THAT ALLOW BRANDS & RETAILERS TO:
be more agile be more responsive (read & react) balance supply with real demand reduce returns improve quality become more sustainable improve cash flow scale current made-to-measure and custom offers
strictly confidential
START A NEW LINE
TEST NEWBUSINESS MODEL
SMALL SERIES
SAMPLING
TEST NEW STYLES
LOCAL-TO-LOCALQUICK REPLENISHMENT
SUSTAINABILITY
and more…
NOT JUST PERSONALIZATION…
TECHNOLOGYIS MAKINGTHIS POSSIBLE.
HOW? Through true, end-to-end process automation and removal of non-value added manual tasks.
PROFITABLE & FASTON-DEMAND / PERSONALIZED PRODUCT
strictly confidential
AUTOMATION
CLOUD TECHNOLOGY
and more…
VISIBILITY
STREAMLINED DATA FLOW
COLLABORATION
CUSTOMERORDER
(shop/online)
APIAUTOMATIC
ORDER PROCESSING
AUTOMATION OF
PRODUCTION RULES
AUTOMATIC MARKER
MAKING
AUTOMATIC NESTING
AUTOMATIC CUTTING JOB
PROCESSING
AUTOMATED EXECUTION of
CUTTING
EMBEDDED KNOW-HOW
Q&A
TEODORA NICOLAEMarketing Manager – Fashion & Apparel
For more information on how Lectra can help with on-demand and personalization, please get in touch: