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10 Top Takeaways from Magic 2017

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10 Top Takeaways from Magic 2017 August 17, 2017 10 Top Takeaways from Magic 2017 The FGRT team attended the Magic conference in Las Vegas on August 14–16 this week. The event covers the men’s, women’s and children’s apparel, accessories and footwear markets. There was a lot of positive energy about the transformative changes taking place in retail. Many of the sessions were geared towards new brands, providing roadmaps and how-to guides on navigating through the fashion space, and emphasized providing a unique and differentiated product offering. The resounding theme we heard throughout the conference is that getting products to customers faster is imperative, and the current fashion cycle is out of date. Retail is not dead; it is just different! Here, we share our 10 top takeaways from the three days. 1) Retail isn’t dead, it’s just very different! 2) Sourcing is strategic and requires collaboration and innovation, now more than ever. 3) Data from social media can help retailers make better and faster decisions, including trend and inventory forecasting. 4) Fit is critical in apparel sales, even more important than fashion or style. 5) Robots, over time, can be taught to manufacture apparel, and domestic production can be made economical using lean manufacturing and management. 6) Fashion is seasonless and more casual, creating opportunities for fashion innovation. 7) The product development cycle must be shortened in order to remain competitive. 8) China is no longer a one-stop shop for sourcing; things are more complicated now. 9) The go-to sourcing destination: Vietnam continues to lure US firms. 10) The final takeaway consists of comments the FGRT team picked up while attending seminars and meetings at Magic 2017. Deborah Weinswig, Managing Director, FGRT [email protected] US: 917.655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016 1 Copyright © 2017 The Fung Group. All rights reserved. August 17, 2017 1. Retail Isn’t Dead, It’s Just Very Different! This session was part of the National Shoe Retailers Association’s (NSRA) education conference, and the speaker was James Dion, Founder and President of Chicago-based Dionco Inc. Dion is also an internationally-known speaker, retail consultant and author. Dion began his remarks with a quote from a Walmart COO as saying there has never been a more disruptive time in the history of retail, however, there is no going back— we can only go forward. He then delivered a presentation titled, “Doom and Gloom,” in which he discussed the numerous disruptive contributing factors, including store closings, desperate actions by department stores, e-commerce, an over-malled US, discount stores, a shrinking middle class, pressure by suppliers and consumers’ changing pressures. Dion then introduced Retail 3.0, which includes offering food and beverage in combination with apparel, saving consumers’ attention through intelligent advertising, seizing attention through authentic stores and the mind shift required to leverage technology such as augmented reality (AR). He forecasts that future stores will occupy smaller spaces and will serve as showrooms, fitting rooms or drop-off points. Finally, on a positive note, Dion noted that millennials and Gen Zers prefer visiting physical stores and that consumer spending remains healthy. 2. Sourcing Is Strategic and Requires Collaboration and Innovation, Now More Than Ever In the panel, “Sourcing Shake Up: How to Steer You Way Through 2017 & Beyond,” executives from leading retailers discussed the current retail environment and the challenges and complexities of sourcing. Rajiv Malik, SVP of Products and Sourcing at Kohl’s said that cost, quality and on-time delivery were traditionally the standards that were used to measure performance. Today’s environment is more complex and dynamic, adding in agility, speed to market and technology. Ed Gribbin, President of Alvanon, said that although from a macroeconomic perspective, we are living in a stable environment, the environment is more complicated from a retail perspective. For example, millennials are 83 million strong and this generation prefers to rent clothes than buy; they want to buy a house, but do not want to buy a car. He also pointed out that Amazon has 16 prime labels that did not exist a year ago. Source: FGRT Deborah Weinswig, Managing Director, FGRT [email protected] US: 917.655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016 2 Copyright © 2017 The Fung Group. All rights reserved. August 17, 2017 The Panelists discussed sourcing and how it touches every organization, and its need to be strategically collaborative, and inclusive of every part of the process. Charles McMurray, Senior Director of Branded Product Development and Global Sourcing at Cabela’s, said, “Thank you to Amazon for the disruption.” He added, that Amazon is a logistics company with a digital platform for selling, and that they have tapped into baby boomers and the digital generation with different needs. He suggested that if you cannot beat them, join them, and look to who Amazon is sourcing with and collaborate. The other way is on product differentiation, he said. Sourcing transformation starts with a sourcing strategy, according to Michelle Matthews, VP/Director of Global Sourcing at Monarch Group. Retailers needs to figure out what the projections are to determine what they will need, and take a holistic view of the organization. McMurray added that sourcing is a service to the customer and as a group, in order to transform, sourcing needs to challenge current business models to get cross-functional alignment and get outside counsel for a panoramic view. Malik added that technology innovation is on the forefront, and leveraging PLM software data is very powerful and that automated sewing is rapidly progressing. Technology for fit is evolving and he predicts that we will see it before driverless cars. 3. Data from Social Media Can Help Retailers MaKe Better and Faster Decisions, Including Trend and Inventory Forecasting The speaker, Wendy K. Bendoni, Assistant Professor and Chair of the Fashion Marketing Department in the School of Business at Woodbury University and an international retail trend forecaster, discussed consumer behavior in relation to social media, and how the data can be used for trend forecasting for making business decisions. Drivers of consumer behavior in the online world include social confirmation, visual consumption, instant gratification, the sharing economy, insta-fashion and uber- connected consumers. Bendoni commented that the average American spends five hours a day on their smartphone (up one hour from 2016). Online contributors started as bloggers, and now consumers of digital content can be analyzed as “tribes.” They seek social confirmation online, are more accustomed to searching for things visually and benefit from the power of a collective voice. Source: Affinio.com Deborah Weinswig, Managing Director, FGRT [email protected] US: 917.655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016 3 Copyright © 2017 The Fung Group. All rights reserved. August 17, 2017 There are new tools on the market, such as Affinio and Edited, that empower researchers to sift through the enormous amount of social media data, for example analyzing attendees of music festivals such as Coachella. In particular, there are a total of 32 million festival attendees, of which 15 million are millennials, and “the festival look” has hardly changed in 12 years, which offers an opportunity for new fashions. Big data can be used to predict trends, determine which products are selling out and determine the optimal time to introduce new products. Fashwire is another digital platform that provides an interactive link between fashion designers and consumers, and drives user participation with a curated user experience and robust rewards program. Users give their preferences via a “swipe right, swipe left” model, and are rewarded with discounts from e-tailers, independent specialty stores and larger retailers. Designers get real-time feedback on user preferences. Source: Fashwire.com The Fashwire platform also serves as a community where users are free to explore and discover styles from the designers’ collections as well as inspire others with their own personal styles. Similar to Instagram, users of Fashwire can follow other Fashwire users and designers, like and comment on their outfits, linking everyone together through one app. 4. Fit Is Critical in Apparel Sales, Even More Important than Fashion or Style This seminar took place as a panel discussion titled, “Foundations of Fit for Fashion.” Fit is critical in apparel sales, even more important than fashion or style. Ed Gribbin, President of retail, apparel and fashion consulting firm Alvanon, discussed aesthetic versus technical fit. He learned about fit from his stint in the uniform industry, which must fit everyone, versus in retail, which can only offer six to eight sizes. Even today, retailers are constantly struggling with fit. Deborah Weinswig, Managing Director, FGRT [email protected] US: 917.655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016 4 Copyright © 2017 The Fung Group. All rights reserved. August 17, 2017 Source: FGRT In apparel design, there is a constant conflict between the creative and technical teams due to an inherent lack of trust, and there is no clear ownership of fit. Moreover, there are different definitions of fit: aesthetic, commercial, technical and personal. Product developers have to know who they are selling to and who they want to sell to. Developers need a focused, target demographic, a single core body and implement the right tools. Yet, designers and merchants differ on the idea of “fit intent.” It is critical that the roles and responsibilities be assigned and accepted within the organization. Crystal Button is SVP Global Sourcing and Tech Design of Fullbeauty Brands, a catalog- driven web business dedicated to the plus-size customer—both men and women—in a broad range of categories.
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