Tomorrow’s apparel industry: Roger Lee, TAL Apparel Group
The apparel sector and its supply chain has undergone a major transformation over the last 15 years, and there’s no doubt the pace of change is continuing to accelerate. When it comes to the question of where the industry is likely to be in 2030, who better to ask than Roger Lee, chief executive of Hong Kong based ‘innofacturer’ TAL Apparel, who shares his vision for future.
With a strategy team solely focused on positioning the business for a more competitive future, and an R&D team dedicated to pushing forward on products, TAL Apparel Group has even coined the phrase ‘innofacturer’ to describe its ability to come up with innovative manufacturing solutions.
Some of its success stories include automated supply chain replenishment delivering stock directly onto retail shelves for customers such as JC Penney, as well as numerous patents covering wrinkle-free and stain resistant treatments. Most recently, the company has invested in new size and fit technologies, including the Metail virtual fitting room and Size Stream body scanners.
“We’re always trying to be at the forefront of thinking,” explains chief executive Roger Lee, adding that having the “best and the broadest-thinking team” stands the company in good stead when it comes to setting itself apart from its competitors.
When it comes to his vision of the changes and challenges likely to shape the apparel industry and its supply chain in 2030, Lee foresees a landscape where retailers and brands will have to differentiate themselves through exclusive products, exceptional service and a compelling in-store experience, with technology and the internet offering new opportunities for smaller and start-up brands to reach the consumer. And not surprisingly, manufacturing models are also likely to be very different from today, with the lowest price no longer driving sales or sourcing.
“I’m still trying to figure out what could technically throw our industry by 2030 – and it’s 3D printing,” Lee notes, adding: “It’s something no-one wants to say, but it will completely kill the manufacturing industry, it will change into something quite different.”
Based on current technology “we’re not going to have a product out of a 3D printer that’s going to be as soft as a silk or cotton shirt is today – but I’m not putting it beyond reality that in 20 years’ time someone could create a material that feels like fabric and can be 3D printed [by consumers in their own homes]. We never thought you could make a car out of 3D-printed components, so it’s not beyond the realm of possibility that you will eventually be able to replicate clothes.
“But none of us is facing the reality [that there won’t be a need for manufacturers any more]. We can’t stop what we’re doing today as more and more people are going to buy clothes – but monitor the 3D printing side very carefully.”
Lee believes 3D printing won’t be capable of producing “mass market” clothes for “another 20 years at least” while research into the technology focuses on non-apparel applications, “but a lot of research is happening.” He adds: “I’m trying to be optimistic here.”
One of the few upsides if this prediction comes true is that consumers “will still need someone to design for them. Even with a 3D printer that can spill out apparel, you will still need a brand to come up with the style that you can buy and customise yourself.”
And if 3D printing does not come along, then “custom-made clothing is going to be a big thing.” Consumers will be able to scan their own body at home, and send a scan to their favourite brand, and make custom clothing from it. “This I definitely foresee happening by 2030.”
Tomorrow’s manufacturing model
Headquartered in Hong Kong, and with ten factories in South East Asia, the TAL Apparel Group has 25,000 employees and an output of over 55m pieces a year. So it’s no wonder that the company is taking seriously the prospect that tomorrow’s business model will be very different from today, as shoppers seek more unique and customised items over mass-produced merchandise.
“We’re already seeing the order size get smaller and smaller, with a lot more styles, and each style a lot less pieces – that’s going to continue to happen,” Lee says. Likewise, cycles will continue to shorten, from the current 10-12 seasons a year, to 24 seasons as retailers try to entice consumers with a constant flow of new products and shoppers increasingly seek “instant gratification”.
“But if you miss a season by two weeks, the season has finished. So reliability is going to be key. And I think what large manufacturers bring to the table is having the infrastructure that allows us to have that capability and reliability. That would be hard for smaller suppliers.
“The question, then, is instead of having fewer mega-factories do we have a lot more smaller factories around the world, a network? That’s still in the back of my mind and might be something we look at in 10-15 years time; a different business model,” he admits.
Supporting this theory, Lee believes that “eventually there is going to be no cheap place for production. Maybe not in 15 years, but in the next 20-25 years pretty much every country is going to be about the same cost to produce.” And without that price differential between countries “it will come full circle; it will be viable to produce closer to point of sale. Then you can really decide last-minute where you want to produce.”
Just look at what has happened in China in the last five years. “China is trying to figure out how to have an industry that can feed more internal consumption rather than respond to external consumption. The Chinese government is already growing costs and wages; internal consumption will increase and absorb the output of production inside China. And that will continue to happen across all countries. It will take some time for sure, but eventually everyone’s going to do that.”
As far as fibres and fabrics are concerned, Lee suggests “it doesn’t really matter where the raw material is,” and that bigger issues are the cost and speed of transportation. Instead, he argues the whole textile process is ripe for transformation.
“It hasn’t changed in the last 30 years; it’s the same old processes - spinning, dyeing, weaving, finishing - although the machines have jumped generations in terms of innovation. Will that change in 20 years? Maybe. It’s really expensive to create a fabric mill today, so we need to make it easier to build fabric mills in the future at much lower cost.
“I always believe that when there’s a need, someone will come up with a solution.”
He also identifies “shortcomings in today’s apparel in terms of fibre. “The younger generation loves polyester, and the older generation loves cotton. People like the functionality of polyester but the hand-feel of cotton, but we do not have that fibre yet. I’m sure someone is working on the next generation of fibre that’s going to combine them together.”
Another issue likely to impact more heavily on purchase decisions in the future is sustainability. “It’s easier for consumers today to know when the product they're buying came from a sustainable source or a sustainable way of manufacturing. I think sooner rather than later people will start tagging their garments on how sustainable a product is, using a global rating.
“At the moment consumers say they won’t pay more for a sustainable product, but when energy or water gets scarce in the future then they will immediately pay a lot more attention and that will change the way people think about products, not just apparel but all products.”
Retail and product differentiation
As far as apparel retail is concerned, one of the main developments Lee foresees is that the current landscape is likely to “change significantly in terms of the lowest price in comparison shopping,” with the technology getting so good and so fast that companies will have to look at doing something completely different to get a competitive edge.
“It’s going to be so easy to compare prices in a few years’ time that automatically the lowest one will win. And when that happens, and when the product is available at multiple points of sale and you can see the cheapest one, it won’t be long-term financially viable [to compete on price]. It’s going to have to come from differentiation.
“Brands are going to have to figure out how they’re going to design differently for each retail channel. And that will change a lot in the next five to ten years.” On top of this, Lee also believes over-exposure means “consumers are getting tired of the big brands” because everybody has them, and the cycle-time from one “hot” brand to the next is getting shorter.
“Based on the internet, ease of delivery, and the amount of malls that you need to showcase your stuff, what’s going to happen is that it will be much easier for smaller brands to reach the consumer in five to ten years’ time. So consumers are going to be more and more interested in up-and-coming brands” – not just in their local markets, but able to seamlessly purchase from anywhere in the world.
“Customers, even in China, are looking for something new, which is why the smaller brands will have a really good chance in the future.”
Linking designers and suppliers
The flipside is that technology and connectivity will also open up new opportunities for small brands and designers to track down suppliers.
“Today the small collections are struggling to find someone to make for them. There’s definitely a factory in this world that would be happy to produce it, but there’s no platform to give these start-up brands a way to find these manufacturers.”
Lee envisages such a platform “where you can put your designs or collection on the web and someone will bid to produce for you, especially the smaller factories who need this connection. It’s going to happen, and it’s going to be seamless. It won’t matter where your things are produced, it can be factories anywhere in the world.”
Despite his strong beliefs in the developments likely to drive retail and manufacturing in the future, Lee admits there is one major unknown hanging over his predictions: politics.
“You never know when it comes to government policy and regulations, and there’s no way of knowing what may or could happen. That’s the only uncertainty in everything.”
But when it comes to planning for the unknown, the solution is a little easier. “The unknown will happen to all my competitors, not just to me, so the way to combat that is to have the best team on board. Then I’ll face the difficulties by being better than my competitors.”
This article is supported by Lectra, the integrated technology solutions company for the textile, fashion and apparel industries.
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