speed to market

A SPECIAL
ROBIN
REPORT
SPRING
2016
CASE STUDIES:
REEBOK CROSSFIT,
ELLIE KAI, MACY’S,
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SPEED TO
MARKET
STRAIGHT TALK FROM ED
GRIBBIN, PRESIDENT, ALVANON
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S P O N S O R E D
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WHY SPEED MATTERS
By Ed Gribbin
S
peed to market,
for apparel retailers and brands,
has been a topic
of interest for
only about four to five
years, but today, it has
become one of the top
priorities, if not the top
priority, for nearly every
retail organization.
During the years leading
up to 2008, retailers all
followed pretty much the
same game plan when
it came to developing
product. Seasonal product
development calendars
were typically 14 to 20
months or longer. The
first two to three months
were the creative phase,
assembling design ideas
and mapping out a line
plan. The next two to three
months were spent building tech packs, finding
vendors, and producing
prototypes. The following
six to eight months were
spent reviewing, rejecting,
modifying, replacing, substituting, redesigning, and
redeveloping. The average
retailer would go through
up to six or more iterations of any given style
before it actually went into
production. Why? Well,
by the time the first or
second prototypes arrived,
the merchants were eight
months smarter; they saw
what was trending, what
their competitors were
doing, what was happening in pop culture, and
as a result of all the new
information, they wanted
to tweak. What they
decided would be a great
2
line eight months earlier
did not look so fresh or
exciting anymore. By then,
though, you only had a
few months left to make
and ship the product to
get it on the retail floor
in time for the seasonal
launch date.
Retailers got away with
this for two simple reasons: one, they owned the
customer; and two, no
one broke ranks and gave
the consumer something
different or better to
consider. They all followed
the same calendars, all
of which were increasingly misaligned with what
consumers wanted and
needed. The fall collections, with sweaters and
coats would show up in
stores in August and September, when it was too
warm for consumers to
care; and the Spring collections would show up in
February and March when
it was too cold for consumers to even look. This
usually forced retailers to
take markdowns on new
product as soon as it went
out on the sales floor. Not
a healthy financial model,
but they got away with it
for a long time, because
consumers had few or no
alternatives to how they
bought clothing.
CUSTOMERS TURN
THE TABLES
Consider that through
most of the boom years
for retail, smartphones
and mobile apps did not
exist; there was no such
thing as omnichannel; and
Internet sales represented
less than three percent of
total sales. Retailers, by
and large, owned the customer. They dictated what
they would sell, when they
would sell it, and how
much they would sell it
for. The consumer had
no choice but to comply.
A key reason why mall
traffic increased so dramatically through the ‘90s
and ‘00s was that if you
didn’t like what one store
offered, you could go
right down the line and hit
them all. Today, you could
roll a bowling ball down
the aisles of two-thirds of
the malls in the U.S. and
not hit anyone.
Shoppers can find what
they want, when they
want it, and in many
cases dictate just how
much they’ll pay for it.
The gravy train is over
and retailers know it. They
know they have to find
new, innovative ways to
engage shoppers, daily.
Unfortunately (for them),
much of that engagement
has, and still is, taking the
form of promotions: sales,
markdowns, discounts,
special offers, and closeouts. There’s no question
that price promotion
drives conversion, but
at what cost? Since the
beginning of the recovery
there has been steady
downward pressure on
margins across the retail
landscape even though
there has actually been little to no increase in actual
product costs for most
categories. Net margins
for publicly held retailers
have declined from the
mid-to-high teens in the
early 2000s to less than
six percent today, and
the slide shows no sign
of stopping. Customer
engagement through
price promotion may
drive short-term conversion, but it is not a sustainable survival strategy,
much less a long-term
growth strategy.
ONE RETAILER PILES
ON THE PRESSURE
Add to these pressures
the fact that disposable
income has remained
basically flat since the last
recession. In 2015, auto
sales hit an all-time high,
and a higher percentage
of income is now going
to home repairs, building
supplies, electronics, and
dining out. These retail
competitors are taking
income away from apparel and footwear, and
they are not even on the
radar as a threat at most
retailers. And then there
are the non-traditional apparel and footwear retailers (actually, I should say
“e-tailer,” as in Amazon),
taking additional market
share in huge buckets.
Things already look bleak,
but now, let’s just put a
little gasoline on the fire:
a little mom and pop
retailer out of the northwest corner of Spain has
been on a path to reinvent
the retail apparel business
S P O N S O R E D
model for the better part
of two decades now. In
2010, it surpassed Gap as
the largest retail apparel
seller in the world. As you
have read in this issue’s
lead article, Zara has
put even more pressure
on its peers by shipping
new, fresh product to
their stores every two
weeks. Something new
24-26 times a year, when
the average retailer has
something new four to
six times a year. Zara has
become synonymous
with speed to market and
they’ve created a product
development model that
almost no one else is able
to, or willing to, emulate.
They invest in fabric when
everyone else is negotiating packages; they make
most of their product in
proximity to their home
base when everyone else
makes everything on the
other side of the planet.
CONTINUAL
ENGAGEMENT
IS KEY
Customers are no longer
willing to wait around for
those four, six or eight
new deliveries a year
when they have so many
more choices, and they
are inundated with so
many more enticements,
elsewhere. This is why
speed really matters.
C O N T E N T
Zara gets the shopper’s
attention four to five
times more often than
other retailers and the
other retailers want to
know how they can keep
up. It’s important to keep
in mind, though, that
speed for speed’s sake,
is not what matters.
Customer engagement
is what matters. How do
I capture and keep my
customer’s attention?
How do I get them excited
with anticipation? How do
I get them to check back
daily or weekly to see
what’s hot, what’s new?
How do I create enough
buzz that I’m getting new
visitors every day?
Customers are no longer willing to wait around
anymore for those four, six or eight new deliveries
a year when they have so many more choices, and
they are inundated with so many more enticements.
This is why speed really matters.
New product, continuously released in smaller
increments, is certainly a
better tactic for increasing customer engagement
than promotions and
markdowns in the long
term. Smaller collections,
delivered more frequently
are not only a reason for
the shopper to look more
often, they also bring numerous ancillary benefits,
as Zara has proved.
Higher full-price sellthroughs, fewer markdowns and closeouts,
and higher inventory
turns all go right to the
bottom line.
STRATEGY FOR
SPEED
There are many tactical
ways to get faster. One
large U.S. retailer bought
two 747 aircraft and flies
them weekly back and
forth to Asia to bring new
product to its stores faster
and more frequently than
its competitors who take
two to three months by
Continued on Page 5 >>
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>> Continued from Page 4
These key principles of
process reinvention, if
successfully executed, will
result in sustainably faster
product development
and greater competitive
advantage.
1. Product development is
not an art; it is a science,
driven by data, with timely
customer engagement as
the primary focus.
boat, train, and truck to
get product into stores.
Another large U.S. brand
has shifted the majority
of their jeans production
back from China to
Central America and
the Caribbean, partially
because of rapidly rising
costs in China, but mainly
to get new product into
stores faster than their
competitors. Other retailers have implemented
new PLM technologies
that have streamlined
their product information platform, improved
information accuracy
and accessibility, and cut
weeks out of product
development lead times
in the process. Burberry,
Tom Ford, Tommy Hilfiger
and about a dozen other
brands have announced
that they are realigning
their development
calendars to have new
in-season product
available for immediate sale when it’s shown
on the catwalks. These
tactics can all help, but
improvements in logistics,
or near-shoring, new
technologies, or calendar
shifts may only yield incremental improvements.
Real speed to market
is more complex and requires strategic, structural,
and cultural change. Retailers and brands cannot,
and should not attempt
to, copy the Zara business
model. They can, however,
radically and methodically
reinvent their product
development process to
remain relevant, survive,
and thrive in this new
retail landscape.
2. Product development
is a team sport, but not
everyone is on the field at
the same time. Designers
design. Merchants select
and assort. Technicians
execute. There needs to
be a hard stop at each
process step so that the
next team member can
do their job quickly and
without interference,
and this only happens
with clear ownership,
trust, and accountability
at each step.
3. Product development
utilizes technology, but is
not a slave to technology.
PLM and 3D virtual
product development
technologies can combine
to dramatically reduce
cycle times, but they
can also become a costly
distraction or a black
hole. Plan, map, and
test carefully; then
implement decisively.
With 3D, it’s not necessarily an all or nothing
proposition. Implementing
3D technologies in one
part of the process at a
time can yield incremental
time-savings while
demonstrating proof
of concept.
If a company’s entire
product hierarchy—
designers, merchants,
technical and sourcing
teams—continue to work,
as they have in the past,
bound together in a
collaborative process, for
12, 16, 20 months to fine
tune, tweak, and perfect
a seasonal launch, that
company may be out
of business very soon.
Speed does matter and
it will matter even more
as we move forward
into this new, unfamiliar
landscape of consumer
empowerment.
Edward A. Gribbin
President, Alvanon Inc.
Ed Gribbin leads Alvanon teams around
the globe helping apparel industry clients
develop and implement robust data driven
growth strategies and solutions in disciplines
ranging from marketing and merchandising to product
development and supply chain. He has worked with most of
the world’s leading apparel organizations and is the eminent
authority on strategic apparel practices and processes.
Retailers and brands cannot, and should not attempt to, copy
the Zara business model. They can, however, radically and
methodically reinvent their product development process to
remain relevant, survive, and thrive in this new retail landscape.
4
Case Study:
S P O N S O R E D
The CrossFit Factor
How Reebok Used 3D Body Shape Analysis to Reach
By Don Howard
New Heights in Apparel Performance
I
n 2011, as CrossFit® was becoming
one of the fastest growing sports
in America, it signed a 10-year
partnership with sportswear
giant Reebok. As the relationship
evolved, Reebok took a closer look
at the body shapes and sizes of
CrossFit elite athletes. It revisited
pattern blocks and grading rules and
successfully launched the Rebook
CrossFit® line of apparel.
CrossFit is a registered trademark ® of CrossFit, Inc.
As Andi Archer, apparel designer
for the Reebok CrossFit line, explains,
“Reebok is the leading fitness brand.
We strive to be that and we want
our apparel to fulfil the needs of
our consumers across all ranges of
fitness.” Michael Morganti, director
of pattern apparel, adds: “At the time,
there wasn’t a lot of information
about the body types of the
CrossFit athlete.” As a result, Reebok
determined to gather CrossFit data.
It tasked Alvanon to implement a
3D body shape survey of CrossFit
athletes and apply that information
and knowledge to the fit of the
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Reebok CrossFit line of apparel.
Specifically, Reebok wanted to know
what the average CrossFit body
looked like, its average size range
and how the CrossFit athlete’s body
shape and size differs from the
average athlete or gym-goer.
Alvanon embarked upon an infrared
body scan project during which it
scanned the bodies of 300 CrossFit
athletes, many of whom were competing in the Reebok CrossFit games.
The scanner’s 16 infrared light points
scanned each body, generating over
80 measurements. It also scanned
findings into the fit of our product.”
The implications of the scan data
are far reaching. Archer explains,
“Worldwide we can range from ages,
shapes, sizes, and across all different athletic abilities, and at different
places on a CrossFit athlete’s journey.”
He concludes, “We want to make
sure that we’re providing the CrossFit
community with the strongest and
most functional product we can—
product that does not restrict
movement while performing a
CrossFit workout. The more people
we scan, the more measurements we
get, the more data we collect, the
Reebok wanted to know what the average CrossFit
body looked like, its average size range and how the
CrossFit athlete’s body shape and size differs from
the average athlete or gym goer.
each person’s horizontal and
vertical measurements. From these
data points the computer automatically generated a 3D avatar of each
person’s body shape.
The avatars showed the Reebok
design and pattern-making teams
exactly where the body measurements were marked. Archer explains:
“We used this information to advise
us on where to put cut seams, where
a garment needed unrestricted
movement and where we should
insert more specific zoning in
terms of heat regulation or
anti-abrasion protection.”
Reebok CrossFit could have resorted
to a traditional tape measure method
of surveying its consumers, but as
Morganti observed: “The advantage
of using the scan technology over
traditional tape measures is that
you can get much more accurate
information. The data can be
gathered very quickly and we can
immediately begin to implement the
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better our product will be.”
Reebok has successfully demonstrated that fit can, and should, be a
major factor in garment development.
Indeed the fit factor can make the
difference between a dissatisfied
consumer who will never buy from
that brand again and a satisfied
customer who will reward good fit
with repeated business.
Don Howard
Executive Director,
Alvanon Inc.
Don Howard has over
25 years’ experience
in apparel retail,
design and manufacturing. He joined
Alvanon in 2010 and heads its global
team of consumer insight and business
strategists. He established the Group’s
renowned Professional Development
Series training programme and is one
of the world’s foremost apparel process
and product development experts.
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CASE STUDY: ELLIE KAI
Why buy a dress when you can make one in three weeks?
T
raditional retail is being
disrupted. The consumer
has too much choice,
too much information
to get through, and too
many channels in which to shop.
However, the consumer now
demands to have an experience
that is personalized with an
emotional connection.
In the past year we have seen a
lot of talk around omnichannel
retailing, local delivery programs,
and why experience matters.
But at the end of the day with
fashion apparel, it is about getting
a garment that fits and flatters,
that serves an occasion, and that
makes one feel empowered with
each wear.
Enter made-to-order brand Ellie
Kai. We first met Elizabeth “Liz”
Hostetter, founder and president
of Ellie Kai, in 2014 in Hong Kong
where she was living with her
family. She told us about her experience of “being your own designer,”
and how good it felt to be living in
Asia designing unique product that
suited her personal needs. Liz told
us about her small business where
she knew her clientele intimately.
When the customer walked in, she
knew the number of children she
had, which school they attended,
and what the family dog loved eating. “She might love V-necks, hate
her triceps and prefer 3/4 sleeves.
She doesn’t think that mid-thigh
dresses flatter her; although the
sales person thinks her legs are
her best assets,” said Liz. We were
intrigued. The marketing departments of major apparel brands
would be hyperventilating to have
this level of detail on their clients.
What Liz didn’t mention then
was how her small business had
6
By Janice Wang
already served 7,200 women,
that she made customized product,
and that she had shipped 25,000
garments in 2014 alone! So what we
had assumed to be a small business
really had operational legs. When
we dove deeper, we recognized
that there was a great business in
the works. According to Liz Koons,
U.S. style consultant, “Ellie Kai
has it all: great products, talented
women and strong corporate and
philanthropic values. In addition, the
clothes make women feel great.”
HOW IT WORKS:
PERSONALIZED
ON-DEMAND FASHION
Timeless
silhouettes
Choose a silhouette
to fit any occasion
Countless
Customizations
Personalize your
look in countless ways
Impeccable
Craftsmanship
Sewn to order & delivered
to you in approximately
3 weeks
Liz has driven Ellie Kai to embody
a new model of direct selling; one
that provides direct access to
on-demand, personalized fashion
by defining, and thus controlling,
the entire supply chain. Unlike other
direct sales companies, Ellie Kai’s
just-in-time manufacturing model
owns every part of the process—
from design concept, fabric
sourcing, and production (overseen
by Liz herself), all the way to the
company’s own sales network
and clients.
CREATING PASSIONATE
BRAND AMBASSADORS
At Retail’s BIG Show 2016, digital
marketing expert Kristy Sammis
explained the power of authentic,
customer-led storytelling to
enhance brand awareness and
influence purchasing decisions.
Reflecting this idea, most, if not
all, of Ellie Kai’s sales force were
customers first. Sales consultants
who run the social shopping trunk
shows work directly with clients to
select and customize each style.
And since they are also customers,
they intimately understand how to
sell the merchandise. The garment
is then ordered online through the
website, www.elliekai.com, and
sewn on-demand to a client’s
specifications at Ellie Kai’s ethically
monitored facility in Shenzhen,
China. The garment is shipped to
the client in just three weeks.
Prices range from $115-$200.
Ellie Kai’s collaborative model
empowers women to be “partners
in design” and encourages them
to build their own businesses as
sales consultants. “Our typical Ellie
S P O N S O R E D
Kai style consultant is somebody
who never thought she would be
in direct sales yet loves the idea
of fashion, personalizing garments
for clients, being busy, and getting
back to work. She is someone who
is very switched on and dialed up
within her community,” says Liz.
She adds: “The other key motivator
is that women feel really empowered to be part of an organization
that is mission driven—that focuses
on not exploiting workers, reducing
waste, and providing the best
working conditions for all our
employees in China.”
THE STUDIO EXPERIENCE
Today, Ellie Kai is headquartered
in Boston, MA, designed, sourced,
and manufactured in Asia, and sold
through trunk shows across the
United States. The brand is also
available through the company’s
website, and through two seasonal
studio showrooms in Nantucket,
and Boston, MA. By opening physi-
C O N T E N T
cal studios, the brand aims
to increase awareness and forge
closer customer relations. The big
benefit of a physical pop-up space
is that it’s a terrific marketing
vehicle. These stores tend to be
economically successful on their
own and generate a huge lift in
incremental shopping online. For
Ellie Kai, having a pop-up store
in Nantucket brought in new
customers who could size and
sample the collection. It also
created a sense of anticipation
among customers, while offering
the instant gratification of an
immediate sale. Customers can
buy a light cashmere shawl, which
they can take away immediately
and wear in three weeks with
their customized Ellie Kai dress.
In 2015, Ellie Kai’s business grew
by 68 percent, with similar growth
in personalized trunk parties; plus
they shipped 40,000 customized
garments. The company has
demonstrated consistent growth
with its unique business model. Ellie
Kai is now looking to increase its
network of style consultants from
90 to 160 by the end of 2016.
In today’s modern global retail
environment, customers and
businesses alike are increasingly
empowered by digital technologies
and channels. At Ellie Kai, customers
can expect a seamless, relevant and
personalized experience across all
channels of communication. Liz has
demonstrated that a traditional
small business with great customer
service really can pivot in a digital
age to being an omnichannel
success.
Janice Wang
CEO & Co-founder,
Alvanon Group
Janice Wang, a
member of Alvanon’s
founding family, joined
Alvanon in 2002 as its CEO. Under her
leadership Alvanon has attracted and
nurtured top-tier apparel analysts,
business strategists and technical
experts. The Group now works with
clients across multiple apparel sectors
in over 89 countries and has evolved
into one of the global apparel industry’s
most sought after business consultancy
organizations.
Note: In late 2015, Ellie Kai became Alvanon’s second mentee company under the Dr. Wang Mentorship Program. Under the
program, Alvanon will strengthen Ellie Kai’s existing business competence with statistical sizing data, technical design tools
and training in key areas of the art and science of fashion, including production, supply chain issues, fit, marketing and sales.
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Case Study:
MACY’S LATIN EXPLOSION:
The New Thalia Sodi Collection Targets Rapidly
By Jessica Binns
Growing Hispanic Market
S
he has 45 million albums
sold. She is followed by more
than 24 million people across
Facebook, Instagram, and
Twitter. She stars in eight
telenovelas that are watched by more
than two billion viewers in 180 countries.
With numbers like these, it’s little wonder Macy’s jumped at the opportunity
to collaborate on a fashion collection
with beloved Mexican superstar Ariadna
Thalía Sodi Miranda, better known as
just Thalía. With Hispanics accounting
for 15 percent of adults and 22 percent
of millennials in the United States,
wielding purchasing power estimated
to reach $1.5 trillion this year, retailers
have been paying particular attention
in recent years to this fast-growing
and influential demographic. This is
evidenced by Kmart’s Sofia by Sofia
Vergara collection and Jennifer
Lopez’s partnership with Kohl’s.
Before even considering design
elements that would speak to Hispanic
shoppers, Macy’s knew that perfecting
the fit of the collection would be half
the battle. The retailer reached out to
fit firm Alvanon, which took more than
20,000 body scans to help develop the
right size and fit. “We also sent crossfunctional teams to Mexico City
to learn more about this customer
and her fashion needs,” says Marcia
Haimbach, executive vice president
of ready-to-wear and intimate apparel
for Macy’s merchandising group.
Fit research spanned 18 months and
yielded key learnings about specific
8
body attributes for the target customer.
“The Thalía fit caters to the woman
who has less curve between her waist
and hips with shorter rise,” Haimbach
explains. “She also has a fuller upper
body. She shops our stores but for
different brands and fits, so our goal
was to create a one-stop shop for her.”
Once Macy’s had established the ideal
fit, it was time to get down to brasstacks with Thalía, who Haimbach says
was very involved in the overall look of
the collection, from color and print to
design (and even fit, too). “She meets
with our team for color and print reviews and to give feedback on what’s
important for the Latina customer,”
notes Haimbach. “She identified animal
print as a neutral for this customer that
should be in the collection at all times.”
From shoes and jewelry to apparel
and accessories, the Thalía collection
features vivid colors, eye-catching
prints and versatile, flattering silhouettes
that Macy’s hopes will appeal to millions
of women globally in addition to the
Hispanic shopper. When the time came
to unveil the collection, Macy’s leveraged
Thalía’s status as a digital influencer and
used social networking platforms to
tap into the Hispanic market. In recent
years, the retailer has fine-tuned and
shifted more of its targeted marketing
to the Hispanic consumer, away from
traditional media and into digital media
platforms, especially mobile. “Over the
past few years, we’ve seen dramatic
increases in consumption of media
by Hispanic customers across digital
platforms,” says Haimbach. “Thalía is a
highly followed social media influencer,
with millions of fans worldwide.
“Offering a preview of the collection
through the first-ever Facebook launch
of a new brand via a live stream fashion
show was the perfect opportunity to
allow her fans access through a platform they are already using daily,” she
continues. The runway preview aired on
Thalía’s Facebook page in January and
has now been viewed by more than 3.5
million fans globally since the collection
officially launched on March 5, 2015.
As the Hispanic demographic will only
continue to grow in size, importance,
and influence in the United States,
Macy’s expects to have an ongoing and
productive relationship with the blond
bombshell, who has been named one
of People Magazine’s Most Beautiful
(Los Más Bellos) a whopping nine times
(a record!) and one of the top 25 most
powerful Latinas by People en Español.
“We see Thalía as a long-term brand
at Macy’s with growth opportunities,”
Haimbach concludes.
Jessica Binn
Contributing Writer
for Apparel Magazine
Jessica Binns is Contributing Writer
for Apparel Magazine. This article is
reprinted with permission from Apparel
Magazine’s 2015 Top Innovators Issue;
Copyright © May 2015. All rights
reserved. To see the Top Innovators
Issue in its entirety visit apparelmag.
com and click on the “Magazine” icon.