Retail Speed-to-Market: Not New & Not Slowing Down
The retail industry has always had a “need for speed.”
In 1858, Rowland Hussey Macy founded Macy’s. Benjamin Altman and Lord & Taylor opened soon after, followed by McCreary’s and Abraham & Straus. These New York City “department” stores competed fiercely to be the first to advertise and deliver emerging fashion and trends.
In the 1950’s my grandfather, owner of a dress manufacturing and sales company, would fly (on PanAm) to Paris with his head designer, to attend couture runway shows. No cameras allowed, the designer would sketch trends as models walked the runway. They would fly back to the States, sketches clutched tightly, straight to factories in North Carolina to prototype, sample and produce “on trend” dresses. These dresses would be available one season later, concurrent with the arrival of the European couture collections, months, or weeks, ahead of the competition.
We need to move faster. Much faster.
Today’s consumer has an expectation of instant gratification. And, companies are lining up to service this desire.
The “need for speed” has accelerated, driven by consumer demand, “show now, buy now” fashion presentations, and further escalated by social media displaying product trends to a greater number of shoppers at a faster pace than ever before.
The fashion and retail industry is headed toward a “real-time” supply chain. This new value chain will leverage “test, measure and optimize” data analytics to target and service a large number of distinct niche markets on a time-sensitive, often direct-to-consumer, basis.
A quicker product cycle will increase our customer’s satisfaction, decrease our risk of surplus inventory, and yield higher margins.
Shorter, faster, and more frequent product runs are fundamental and disruptive changes to most retail business models, challenges for our supply-chain, and a shift in the acquisition and application of consumer data.
New tools are emerging to support this speed-to-market initiative. The proliferation and optimization of predictive analytics, vendor managed inventory (VMI), machine learning, artificial intelligence, micro-factories, 3-D printing, and enhanced direct-to-consumer delivery are bringing this “real time” supply chain to life.
To keep up with the blazing speed of innovation and go-to-consumer strategies, we need to make faster high-quality decisions. This increased speed of decision-making requires re-training and re-thinking our processes, guide rails and rules.
Fast Fashion
The Wall Street Journal tracked a coat with expressive hardware under development at Zara. Store managers, designers, and commercialization teams all worked closely, in the same office, to develop a concept. Then, pattern makers quickly prototyped a garment that spoke to the trend. It took them just five days to come up with a design. Then, manufacturers in the town made 8,000 coats in 13 days. Zara sent them to its logistics center in Zaragoza, Spain, then trucked them to the Barcelona airport. Within 24 hours, they arrived to JFK and were sent to a store on Fifth Avenue. Customers could buy the local “flavor of the month” in less than a month’s time.
The shortest distance between two points
Amazon has applied for a patent for “anticipatory shipping,” which uses Artificial Intelligence to predict which products will be popular among geographic niches of consumers, and then stores those products in warehouses nearby… before the customer places an order.
There’s retail water-cooler story about a man named Marco, who arrives home to find a package on his doorstep from Amazon. He’s puzzled, he didn’t order anything from Amazon. He enters his home and opens the box, he discovers a single light bulb. He sits at his desk and opens his laptop to send a complaint message to Amazon… just as the bulb in his desk lamp goes “pop” and burns out.
Last month, Amazon expanded same-day delivery & one-day shipping to 8,000 markets across the U.S. The expansion brings these services to large cities & smaller towns across the USA.
Also last month, Target Stores paid $550 million for Shipt, enabling same-day delivery at half of its 1,800 stores by next summer, and the entire chain by next Christmas.
Feel the need: The need for smarter, faster, frictionless commerce to satisfy our increasingly demanding consumers, and to generate better margins at lower risk.
The “need for speed” also applies to retail careers
The change in the retail landscape has led to many store closures, and the loss of many traditionally-defined retail jobs. However, the new landscape is creating new retail jobs in distribution centers, logistics, artificial intelligence, virtual reality, interactive display, and other disciplines. As the speed of retail transformation accelerates, job-seekers must seek new training and develop new job skills, with equal speed.
© 2018, David J. Katz — New York City
David J. Katz is chief marketing officer at Randa Accessories, an industry-leading multinational consumer products company, and the world’s largest men’s accessories business.
His specialty is collaborating with retailers, brands and suppliers to innovate successful outcomes in evolving markets.
David was selected by LinkedIn as a “Top Voice in 2017.” He has been named a leading fashion industry “Change Agent” by Women’s Wear Daily and a “Menswear Mover” by MR Magazine.
He is a public speaker, co-author of the best-selling book “Design for Response: Creative Direct Marketing That Works” [Rockport Publishers]. He has been featured in The New York Times, The Wall Street Journal, New York Magazine, The Huffington Post, MR Magazine, and WWD.
David is a graduate of Tufts University and the Harvard Business School. He is a student of neurobiology, consumer behavior and “stimulus and response.” The name Pavlov rings a bell.
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