Five Changes that Retailers and Companies Need to Make in 2020 | Jeff Streader

What would you like to tell the large company
the large retailer the large manufacturer to look for as far as five
changes if they had to make will be the first second third fourth and fifth it’s
a loaded question it is so I’ll start here so American brands or European
brands that are trying to expand grow beyond their their core geography don’t
be afraid of making change go global act local that’s not a new term you’ve heard
that before but it’s really important so for me if I owned the brand and I was
based here in the States and my revenues largely driven here in the United States
and I wanted to expand say for instance to the UK or say for instance to China I
can’t be afraid to make changes to my brand not just the fit because of the
petite fit in Asia but I can’t be afraid to make changes to color or to the
aesthetic as long as they don’t strip my core DNA away you have to be able to
make changes and I think a lot of the brands that have gone to Asia to China
to other parts of the world they just felt that my brand is so strong my brand
is strong enough to be able to go into a foreign market and I think those days
you have to be able to be flexible and I think you have to be able to listen to
her to you to whoever it may be in that country and know that I’m still bringing
Americana my brand but to change and that’s the first thing I would say any
thoughts on that perfect you’re dead on second one that’s most important to me
is really about using data to make more informed decisions informed decisions so
the data the various touches the consumer has in my store on my
website social media I can harvest that I can go on to your profile your Facebook
profile your Instagram profile I could harvest that information and understand
your likes your dislikes and what you’re saying about me my product and to
harvest all of this and to be able to make decisions if you are in my customer
database to be able to make decisions in planning and forecasting that’s a big
deal the scarcity model that Zara has
scarcity model they think they’re gonna sell a thousand pieces they buy 750 there’s no markdown in there FOMO: fear of missing out fear they are masters they
created that’s a fantastic model it’s a model where the IMU is right out of the
gate what they’re gonna receive it’s not the Macy’s model I’m not picking on
Macy’s it’s the industry we think we could sell a 1,000 units we’re gonna
buy 2,000 units they do sell a thousand at regular price the second 2,000
pieces are sold with some type of cadence some type of markdown and then
the blended IMU that blended gross margin is not enough
I suggest moving to a scarcity model I suggest to purchase what you think he
can sell right out of the box quickly turn it converting into cash and use the
data they harvest the data that’s available in your systems to make more
informed planning and forecasting decisions to build that single user profile
for marketing to her and for understanding when to mark down goods
and when to move away from product it’s all about data absolutely it’s about data
absolutely so in terms of personalization in terms of customization in terms of
curation it’s data there is art and science here at the end of the day
there’s art and science and our industry has been largely run by art and that’s a
good thing no suggesting the art to go no no no no but science is more critical than it’s ever been and for brands and retailers to be
successful you must harvest the data and use that science so that’s three big
three reasons that for suggestions that I would
have for retailers or brands on how do you grow your business so well to add my
suggestion would be to think small and scale the business think in small chunks
because we are now dealing with individuals the data is going to get
drilled down to eventually each consumer so to speak rather than a segment of
people each consumer has a different shape different requirement
and each individual wants to show their individuality and give them whoever
gives them that opportunity will be the shining star of this business because
you just provided them something that they’ve been longing you don’t want to
be seen doing the same thing they all want to do the individual whatever their
preference is and I’ve seen this I’ve seen this in a lower scale digital
technologies have done huge difference I’ll give you an example historically we
sell certain number of sizes because our business model has been we design it we
develop it we manufacture it and then we warehouse or we distribute through the
retail stores and then sell it even for the e-commerce models we have to have
the distribution centers and have the goods in the warehouses before we can
show what we want to sell yeah the contrary model is design it develop it
sell it and then make it design it develop it sell it and then make it and
it kind of slowed down a lot of people thinking well that’s all right for a
very small startup company but I’ve seen some huge corporations now doing 40 to
60,000 garments a day a day every day 40 to 50,000 customers
design their own size environment and those garments are produced now are they
making profit huge they’re financed by their own consumers they get paid
hundred percent upfront the startup companies love this business model in
Pakistan for example there are seven different brands who’ve done this very
successfully and grown tremendously the data which is what you’ve emphasized
quite a bit on that in the old days we always wanted to know can we body scan
a person can we get all the body scan data well God you know the people don’t
know how to mine the data I already know what the garment measurements were I
already know what your measurements are from your purchase and you keeping that
garment I already know what should fit you and even one more example because we
spoke about pants denim historically we’ve had two inch grade 30 32 34 36 38
and so on because we want to keep lower number of SKU’s in stock that’s a
business model we probably have two or three inseams for cross grading again
because it multiplies all these into more SKU’s correct bigger is correct
but if the customer has to go and find somebody to hem it because I had the
right waist side but I didn’t have the right inseam think on the now digital
model I have a client who actually makes 30 31 32 33 34 35 36 I say all the way
every size possible because I have digital data I don’t have any inventory
and I offer from 27 inseam to 34 36 inseam
even allow you to put in your inseam and I’ll make it just remember my business model
is I want to make what I’ve sold if that’s the case and I will have just expanded my horizon from the old business model of thinking from the SKU’s I just
reached out to a lot more people who have different bodies I think it’s
interesting what you’re saying and you’re back to the word agility which we
spoke about earlier and I have to tell you as a consumer there’s aspects of
that where I can curate and personalize my purchase that is really exciting for
me not long ago I purchased denim jeans non denim denim jeans five pockets from
a company in the UK called Spoke and they were custom-made for me it took a
month to get them by the time I got them I forgot that I had ordered them and I
was kind of like unhappy that I came in like and then I bought the jeans they
fit me perfect and I wore them but I would not return because I did not want
to wait a month so there is actually the industry has changed thanks to
Amazon which is the greatest fulfillment company in the industry they’re not an
apparel company no but they’re a fulfillment company and they’re great at what they do but the two-day free shipping is kind of the norm so with that as a baseline how does
a company that produces whether it’s being produced in Guangdong province
whether it’s being produced in Colombo wherever in the world how do you compete
with that when the freight from Hong Kong to come to the states is still when
you have to clear you’re still looking at three to five days how do you compete
with that so the challenge is is that the consumer on one hand wants it fast
and he or she wants it in one to two days free but when we’re talking about
consumer what is that tolerance I don’t want to wait a month I don’t want to
wait two weeks so somehow we need to find is it from the industry I’m a
consumer and I’m looking for a solution here I’m not
sure what that is right now I personally think that there’s a way to offer and
there’s there’s a lot of companies right now that are offering MTM
made-to-measure and there’s a way where you have a template you have a few
fabrics you know a slub denim a few fits a few collars I use my denim shirt and
then you’re able to quickly make it but you’re still looking at the fulfillment
depending upon where it’s stitched see Guangdong ship from Hong Kong they get
it in seven days is that enough I’m not so sure

Norman Bunn

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