Sourcing Journal Summit: The Time for Change Is Now
● The event convened industry thought leaders from across the entire value chain.
Sourcing Journal’s recent 2020 summit, “R/evolution,” convened industry leaders at a pivotal time as COVID-19 has not only accelerated the digitalization of retail, fashion apparel and its supply chain, but the pandemic has also transformed how consumers shop and buy.
The coronavirus outbreak has also accelerated the growth of retail’s “apex predators,” a term coined by Doug Stephens, founder of the Retail Prophet, to describe Alibaba Group, Amazon Inc., JD.com and Walmart Inc. who are masters of “price, selection and convenience.”
In his keynote address during the summit, Stephens offered optimism for retailers and brands struggling under the competitive weight of these retail and online marketplace giants. Stephens said brands need “to be surprising, unique, personalized, engaging and repeatable. And if we can hit all five of those, I guarantee you, you will not lose a minute of sleep about those apex predators that are dominating the market. You will thrive in their shadows.”
But there are other challenges lurking in those shadows as well.
From burdensome trade policies, trade wars and inefficient supply chains to unsustainable manufacturing practices, increasing consumer demands for greener products and a move toward “seasonless” fashion apparel, retailers and brands are saddled with a host of issues to contend with — now and in the future.
Edward Hertzman, executive vice president of Fairchild Media Group and founder and president of Sourcing Journal, said in his opening remarks that the “old formulas of more doors, store comps and more inventory just don’t work anymore. Simply generating more demand will not solve fashion’s problem. Our businesses, to be relevant, must unlock working capital and find efficiencies in all aspects of the process, beyond just design and sales.”
As the summit progressed, Hertzman’s call for “business relevancy” and the need for agility and innovation underpinned many of the discussions. Aside from keynotes and panel discussions, the event included breakout sessions where attendees and presenters continued conversations started on the virtual stage, and even worked on solutions to help companies navigate a new “fashion and retail reality.”
Speakers and attendees included executives from H&M Group, the American Apparel & Footwear Association, The Sustainable Fashion Forum, Madewell, Google, First Insight Inc., Harvard
University, Luen Thai Holdings Ltd., Foot Locker Retail Inc., Todd Snyder, L.L. Bean, Lenzing Fibers, American Eagle Outfitters Inc., QVC, Nordstrom Inc., Under Armour Inc., Lectra, Macy’s Inc., TJX Cos., Target Corp. and Gap Inc., among many others.
To augment the discussions, the event included a companion report. Caletha Crawford, publisher of Sourcing Journal, noted in the preface of the report that sweeping change is needed today to address the challenges facing the apparel, accessories and textile industries.
“Rocked but persevering, the industries must reengineer operations to usher in the initiatives that had already been in the works for some and on the distant horizon for others,” Crawford said. “Agility, traceability, speed, collaboration, accountability and environmental responsibility are the imperatives. And they must be achieved now. The time for incremental changes is over.”
The report included 11 mandates to help companies move forward with implementing change. The mandates included digitalization, sourcing, climate change and marketing, among others. Each identified a traditional approach to the topic and offered a “r/evolutionary” version as a mandate for industry change.
Lenzing, for example, noted that with climate change, the traditional approach has been to passively reduce CO2 emissions “by having few tangible goals and offering limited transparency into materials used and production processes.” A better, more “r/evolutionary” approach would be to “actively reduce CO2 emissions within the apparel supply chain through the commitment to science-based targets, on not just an individual, but a collaborative level.”
The summit also served as a chance for industry leaders to share best practices, especially those learned while managing change due to the pandemic. Mara Hoffman, principal of her namesake brand, shared her company’s “aha moment” as COVID-19 first peaked this past spring. The brand was “stuck with a ton of inventory,” she said, and the staff had to be downsized. It was a difficult, and reflective time.
“The idea of making more things to solve an inventory problem seemed very counterintuitive, especially for the fact that we focus our company on sustainability and how to do the least amount of harm, and to take responsibility for the amount of waste and the amount of product that we’re putting out into the world,” Hoffman said. “It was not an easy decision and a heartbreaking one to say, ‘All right, we made this gorgeous fall collection. We had shown it in February, put it out into the world, and it had this great response. Buyers loved it, customers saw it and were excited about it.’
“But really the only responsible move in this was to take responsibility for what we were already sitting on, as opposed to making more in an industry-wide problem of inventory,” Hoffman explained. “That was a huge decision for us. What we’ve been doing since is working with what we have, re-storytelling around it, and using that going forward until we get to the next season for spring. This has been a huge wake-up call.”
Stephens described the current business climate as an “unprecedented time in terms of the disruption, and the difficulties present.”