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Posts Tagged ‘Business Growth’

Fashion on-Demand – What it means for Mass Market Apparel

Creativity and innovation have always been at the nucleus of the approximately $2.4 trillion fashion industry. Much like technology, fashion that rules is both dynamic and visionary. It’s no wonder, then, that the two are inextricably linked; that is, fashion and technology. From the very first sewing machine that paved the way for the textile revolution, to the growth of online retail that has led to massive shifts in fashion marketing and distribution, technology continues to influence the rapid transformation of fashion. Today, AI is being utilised to predict style trends and design clothes, and cutting and sewing are already automated. Moreover, virtual fitting rooms, as well as virtual alter egos (avatars) created for online fittings, are predicted to become more mainstream. In a very real sense, technology is automating fashion and shows no signs of stopping. Fashion on-demand Traditionally, the seasonal fashion groupings of spring/summer and autumn/winter practised since the Second World War have prevailed. The gradual rollout of what seasonal styles are predicted to be in demand gave brands ample time to produce the optimal number of clothes for each season. However, this is set to change. In fact, the change has already begun with the rise of fashion on-demand. This major shift sees products being “pulled” rather than “pushed” into the market by designers and buyers. Instead of relying on fashion forecasts or educated guesswork, custom-made production or personalisation is now a major trend, thanks to the help of digital technology. This has caused significant changes in the procurement, production, and distribution processes which were always based on predictions of future consumer demand. The “pull” fashion dynamic, then, implies that restocking inventory can only happen when all units are consumed. Pros and cons of on-demand production Of course, there are advantages and disadvantages to the on-demand production model. An upside of on-demand production is the lower capital outlay required, making it ideal for start-ups and small enterprises. It also means lower inventories, as well as greater adaptability and agility. Demand uncertainty is also reduced with shorter turnaround cycles, whilst also allowing for the adoption of a more sustainable small-batch production cycle. Conversely, however, smaller batch sizes can also mean higher production costs, as well as an increase in transport costs if it involves nearshore or offshore production. According to McKinsey’s State of Fashion 2019 survey report, “Sixty per cent of apparel procurement executives expect that over 20 per cent of their sourcing volume will be from nearshore by 2025.” Data analytics, automation, and the rise of microfactories Harnessing the power of automation and data analytics has allowed start-ups to easily adopt made-to-order production cycles. With major tech companies from CAD development working on digitising and partially automating production (including designing, cutting and sewing), companies can save time and manpower. As a result, producing even a batch size of one can become cost-efficient. So it certainly won’t take long for mass market players to take the cue, and follow a similar model. In fact, major players have already begun taking advantage of the power of advanced analytics to guide their planning decisions and production processes. And although apparel production automation is still at its nascent stages, the technology behind it is rapidly advancing, thereby indicating its huge potential. Examples of major companies that have begun adopting on-demand production include Adidas, Superdry, and Uniqlo. Adidas is one of a group of large brands that are showing signs of leveraging speed to shift towards on-demand. Aside from its Arkansas operation, it operates “Speedfactories” in Atlanta and Germany that together are expected to produce around a million pairs of running shoes a year by 2020, using digital design to enable mass customisation.[1] Superdry launched “Superdry Preview,” limited-edition collections that will go from design to delivery in just 6 weeks.[1] Uniqlo parent company Fast Retailing has signalled its intent to produce on-demand knitwear at scale through its partnership with Shima Seiki.119 Shima Seiki produces 3-D knitting and technology it labels “Wholegarment,” which produces seamless knitwear and requires no post-production labour, and anticipates that its tools and machines will enable “mass customisation.”[1] Microfactories also embody the revolutionary impact of on-demand production as they are capable of high-speed, agile garment production. They help speed up prototyping in design studios or on shop floors, as well as enable personalisation and waste reduction. The gradual adoption of innovation Although seemingly antithetical, what this heading means is that leading brands, unlike start-ups, are likely to embrace the principle of on-demand fashion gradually. The reason being that quickly adopting radical changes comes at a high cost, and creates disruptions in the current supply chain. What this means for retailers Automation can make nearshoring more attractive for mass-market appeal retailers and brands, but will also make onshoring more economically viable eventually – for specific products. Using the U.S. as an example, assuming that all key on-demand production technologies are available to all, Mexico would be more cost-competitive compared to going offshore to India or Bangladesh, for example. For Australia, China can remain a viable nearshore alternative whilst going onshore may become even more attractive as more advanced manufacturing technologies become more widespread. Someday, automation technology can make the production of both simple and complex garments less labour-intensive so that onshoring becomes almost inevitable. How to get started Based on the pattern of changes, mass apparel brands and retailers must begin to move toward a demand-focused value chain. To remain relevant, they need to be able to adopt automation technologies and prepare to satisfy consumers who desire personalised fashion. Strategic decision-making Company decisions on nearshoring and automation must be needs-based and must make financial sense. They must always consider the feasibility of nearshoring, as well as the commercial value of lead time reduction. They cannot blindly embrace automation. They should have a well-developed fact base to guide their strategy, and which they can refer to in planning for different product and design types. Essential skills and mindsets To successfully adapt to a demand-oriented supply chain, a consumer-focused and agile mindset is required. The challenge, then, lies in sourcing the right talent in digital or advanced manufacturing technology, and in making intelligent sourcing decisions. Key partnerships The need to have ties with global mega-suppliers to deliver massive manufacturing requirements remains. However, it would be essential for retailers and fashion brands to partner with tech companies specialising in the development of innovative automation solutions. The latter are better-placed to develop disruptive technologies that influence the fashion industry. The change starts now For apparel brands and retailers wanting to forge ahead, this is the time to make strategic changes in their business model. Nearshoring should be adopted as early as possible, even at the risk of slightly lower profits. They should also start collaborating with technology firms, as well as with manufacturers. They should already be identifying key engineering talent they can employ in-house as they prepare to lead the way in terms of nearshore manufacturing and automation. [1] Business of Fashion - The Year Ahead: Mass Market Goes On Demand

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The 5 Essential Elements For a Successful Project

We have depth of project experience, and years of working in the retail industry, on various technology projects. Over this time, we have gleaned some insight into the ways of engaging that get the best long term results for the client organisation and the project, and we want to share some these with you. Projects have traditionally been measured on time, scope and cost, and if measured by this alone, success rates are low. The measures of time, scope and cost are important but not everything. We add to this measure of success by asking: Did the project achieve the business objectives? Did we take the team along with us? Do they own it and is it embedded in the business? There are many moving parts to a project, and the following model helps remind us of some the elements required that contribute to a successful project. I was introduced to the Knoster Model of managing complex change diagram years ago, and I still see it as relevant. You need a lot of things to align to create successful change in business.   Vision Even the most carefully conceived organisational change plans require more than a great business case to be delivered, they also need vision and communication. Consider when an organisation decides to make a technology change. The wrong way lies in informing staff of the change, scheduling training, and expecting them to use it. This will have the effect of many creating workarounds to avoid systems that they find confusing and may have never wanted to begin with (gratefully, we don't see too much of this anymore, most businesses seem to have caught on). Coming up with a vision represents a significant part of the mindset needed to align a team. To create effective change, you must also use communication to explain the vision and sales techniques to boost buy-in. To do that you need good leadership in the shape of project sponsorship. PMI state of global project management (2018) reported, for the sixth year in a row(!), that having actively engaged executive sponsors is the number one top driver of project success. Part of the project sponsors job is to keep the vision alive. If you're interested in developing a deeper understanding of the role of a sponsor and what's expected of them Colin D Ellis has some excellent practical advice to offer. Projects with effective communication are almost twice as likely to successfully deliver project scope and meet quality standards than projects without effective communication (68% vs 32% and 66% vs 33%, respectively.) Source: PwC 15th Annual Global CEO Survey, 2012. Matching Skills to Roles At the start of World War II, the US president selected General William “Wild Bill” Donovan to erect the country’s first foreign intelligence service, the Office of Strategic Services or OSS. Donovan had a novel idea of how to get the best staff. Instead of finding people to fit a preconceived plan, he hired the best that he could find and shaped the missions around them. With talents as diverse as playwright Robert Sherwood and future celebrity chef Julia Child, Donovan created an agency that helped to score important victories for the Allied cause very soon after being formed. Consider bringing in the best and brightest for your organisation, then tailor the roles to suit their skills. This can help to build a more vibrant and effective organisation from the ground up. Managing the Learning Curve When embarking on a new project, managers must understand that the staff they will have, whether from inside or outside the organisation, will need training. We should never assume that any training format will lead to great results, but we should tailor learning sessions for optimal effectiveness. The learning focus should highlight training for the job instead of the new system. Teaching staff how to operate the entire system generally wastes time. Staff simply want to understand how the new system relates to what they need to do. The trainer should emphasise connecting functions that relate individual staff roles within the new technology. All need to be educated on the process. Without this fundamental concept, the new project will not succeed as envisioned. The learning process is just as important as the material. Effective training incorporates the needs of those being educated. Some tips on how to run an effective training program include: Training in smaller and more understandable “chunks” Keep the tone of the training light and even humorous if possible Use examples that relate to day to day work Use numerous practice sessions to nail down the details Use input and feedback to make training more effective in the future Incentives As Opposed to Rewards Any vision for a plan of change should include incentives. In this case, incentives mean something different than rewards. Staff get rewards for a job well done. Incentives should reflect built-in motivation to embrace and put effort toward making the change plan a success. In other words, explain to the staff what’s in it for them. If the new project can help to reduce workloads and makes processes easier, communicating these facts should serve as part of the vision and the plan. The team must see that the effort expended to make a change will work for their benefit, as well as for the organisation at large. Resources People, time, communication, and tools all serve as important resources in making an organisational change plan work. Organisational leaders must understand that all represent limited resources. Many organisations bring in energetic talents with a can-do attitude, then heap project after project onto them. While they cheerfully accept all challenges, they also spread their time increasingly thin. This prevents them from putting their best work into any project, much less all of them. For some organisations, time represents one of the rarest resources. A study showed that many offices waste up to 20 per cent of their time on procedures and processes. Another area of time expenditure lies in meetings. Leaders should make a point of emphasis to run efficient meetings that start on time and end early, if possible. I am sure we have all experienced being in a meeting that could have been an email; however, stakeholders having to work through emails or ask around for updates is inefficient communication. Avoid this by establishing communication channels as part of the project plan. Action Plan One of the first steps toward creating a plan of action lies in first considering constraints. Setting aside what the organisation cannot currently do creates boundaries around the plan and prevents it from veering into non-productive tangents. You should also consider coming up with at least an outline of a plan prior to any other part of the process. This can guide you into making wise decisions about communication and resource allocation. Make sure that you have what you need in place before executing the plan, or you risk a false start that wastes resources and may even kill the project altogether. Getting a project to work properly involves more than having an idea and ordering its implementation. It involves crafting and selling a vision, communicating it effectively, than using effective planning to execute it. Following these tips will make sure that your project ends up as more than just another binder on a shelf collecting dust.

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Small data; creating a superior customer experience

The headlines and news stories are predictable: Bricks and mortar are failing. Online is the future. Here at 6R, we know that this is an oversimplification, as online and in-store, experiences merge, good retailers are using data to focus on improving convenience and experience for their customers. It’s the balancing of macro trends with insight from going deep into customers mindset that gives detailed data we can work with. Customers want retailers of speciality goods to make them feel personally important and valued in a comprehensive shopping experience. Businesses in highly competitive fields need more than just smiling faces. They need to focus on making each customer experience a positive, unique and satisfying one. Strategic use of properly acquired data can help. We have touched on this before when we wrote about using customer data for efficacy. Data will be the biggest driver for retailers in 2019, as stores become more astute at knowing who their consumers really are. How Data Helps Your Business In the digital age, when businesses talk about data, they are referring to accumulating information on customers. This information helps the companies to better respond to consumer trends and individual customer desires in both marketing and sales. By studying various sources of data, retailers can create better experiences for their customers before, during, and even after, the shopping experience. Businesses need to develop a competitive advantage in today's retail environment. The increase in the use of customer analytics tools is improving customer retention and loyalty by creating personalisation at scale. Different Types of Data Most people are familiar with the idea of “Big Data.” Often, the connotation of this phrase, is a negative one, especially when it comes to concerns about social media data capture and the use of information from the general public. Big data, however, can help companies and services respond better to the needs of the consumer, and transform lives for the better. For example, Australian utility organisations have reacted to the challenges of poor customer service by using big data to develop better responsiveness in key situations. Fewer people may have encountered the concept of “small data.”  The difference between big and small data reflects that of macro versus microeconomics. Big data refers to mass movements and trends. Small data refers to gathering, compiling, analysing, and using data on individuals or smaller subsets to enhance their personal connection to the business. Rather than treating people as herds and groups, small data enables a more profound interaction. "Big Data is pretty incompetent at suggesting how to increase the love." [1] "In the 1990s LEGO’s sales were declining and executives were scared by Big Data research studies showing that Digital Natives were increasingly distractible and in search of instant gratification. Swayed by this data, LEGO was considering dumbing down its toys, making the kits simpler and even perhaps increasing the size of its iconic brick. But then Small Data convinced LEGO to do an abrupt pivot, going the other direction completely, after senior leaders visited the homes of their young users and talked to them about hobbies and leisure." [1] For small or medium-sized businesses offering speciality services or products in a narrow field, big data may not be as helpful as small data. Small data is what can help them to establish lasting relationships and connections that lead to return visits, increased sales, and word of mouth referrals.  The insights into the motivation of customers, gained from small data is incredibly valuable and provide businesses of all sizes with personal and emotional motivation. An Insight that is often lost in the 'averages' of big data analysis. How AI Boosts the Bottom Line Once a business decides to collect and use data, the major challenge is deciding how best to use it. Staff and computer systems can collect information, but then what? Artificial intelligence may be the answer.  AI services can automatically help its users to master sets of data and maximise their potential, without draining their resources. Although generally identified with sifting through big data caches, AI systems and software can adapt to the specific needs of a smaller business. Retailers can use AI to lift insights from customer transaction data, providing them with information to tailor in-store offerings. "Although the current mantra of deep learning says “you need big data for AI”, more often than not, AI becomes even more intelligent and powerful if it has the capability to be trained with small data."[2] Small data combined with AI technology can help retailers, to create a superior customer experience. ELSE, an Italian shoe company uses AI and data in a “bottom-up” approach. This approach uses data to target individual customers, to begin with, and then works up towards larger groups, rather than the other way around. ELSE has a virtual shoe sizer that uses simulation technology to match customer feet with the perfect shoe selections. Data Plus Customer Service Equals Results Data alone does not solve the problem of satisfying customers. It must conform to a business mission plan that emphasises customer service while exploring better ways to serve each customer. When great products, modern technology, innovative owners, and data (big and small) are combined, the business has the best chance to maximise its potential. We at 6R Retail love working with businesses that are looking for process improvements that will improve their customer experience and bottom-line profitability. If that sounds like you, please get in touch.   [1] Martin Lindstrom; Small Data: The Tiny Clues That Uncover Huge Trends [2] medium.com; Why Small Data is Important for Advancing AI

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Get organised with a Christmas Holiday Checklist

This time next month Christmas will have been and gone for another year. I'll let that sit with you for a minute. What's the overriding emotion? A stomach clenching "oh no!" not yet - I am not ready? or a sense of calm - you've got this! Which one are you experiencing? Maybe you are somewhere in-between and that's ok too. If you are sitting there calmly, we would love to hear how you broke it down to achieve your list (yep permission to gloat).  If you are the sitting there with heart racing, wide-eyed, stomach clenched, take a deep breath and read on. (Read more)

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Future trends 2016 and beyond, what’s in store?

Earlier this year, here at 6R we attended a macro trend presentation (looking at big picture consumer trends). The presenters talked about ‘4C thinking’ collaborative, creative, conversational and convergent. This is not a ‘next year’ type of trend forecast but instead a bigger picture ‘stand back and take a look’ at the longer term. (Read more)

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The first fashion system decision; product, colour, size & fit?

Replacing systems is expensive and a lot of effort and hopefully it’s going to last you for a while. If you stuff it up, you’re either going to be forced to admit to a costly error and start all over again or you’ll have to live with the mistake every day using a system that just doesn’t fit your business. (Read more)

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