Apparel software trends 2016 – Where to focus future spend

5 April 2016 | Features & Interviews | Source: Leonie Barrie

Where should apparel firms be focusing their software investments now if they want to remain competitive into the future? Recurring themes include tools for greater visibility and control across outbound and inbound supply chains, and technology that supports fast access to accurate, up-to-date information, allowing improved decision-making across multiple channels.

Paul Magel, president, Applications and Technology Outsourcing, CGS:
According to Gartner, by 2020 there will be 25bn devices and a plethora of data. But, making sense of the data from these devices will be the trick to outshine competitors. This means that actionable intelligence solutions are a key investment for apparel firms to ensure continued growth and catapult them ahead of their competition.

On the demand side, fulfilling orders across omnis will be essential to remaining competitive. Apparel firms should invest in warehousing, distribution strategies and order management/fulfilment technologies to better manage customer engagement, relationships and other processes.

On the supply side, apparel firms need to gain greater visibility and control across the entire supply chain. This means they should focus efforts on moving away from an environment with multiple systems, or dependence on spreadsheets and generic software, to a fully integrated ERP solution that offers the best opportunity for business improvement. It's essential for your software and service provider to know your business. Every industry has its own requirements; from terminology to specific functionality, and a one-size-fits-all ERP will leave you with many gaps and needed customisations.

Investments should also be made in integrated PLM applications, which pull together traditionally less-structured planning, design, development and sourcing processes. Additionally, special purpose web and mobile applications are gaining popularity and importance as they provide immediate results for often challenging areas, including shop floor control manufacturing, global quality assurance and product compliance.

Kurt Cavano, founder and chief strategy officer, GT Nexus:
The #1 challenge that retailers are facing today is out-of-stock inventory. It is the quickest way to lose customer loyalty and, as we know, it takes ten times the advertising spend to acquire a new customer as it does to maintain existing clientele. In this day and age there is no faster way to diminish brand value, potentially lose out on customer loyalty, expose consumers to competitive brands, and miss revenue goals than to suffer from stock-outs.

There's no doubt about the ever tightening strain the introduction of omnichannel shopping has on fulfilment, especially as most retailers silo their inventory on a channel-by-channel basis. The result is quite often unprecedented levels of out-of-stock inventory. Whether its holiday season or an unforeseen supply chain disruption, one out of three consumers blame the retailer for an out-of-stock situation they have experienced [according to recent consumer survey results with YouGov].

Most retailers prioritise the front-end technology investment such as beautifying customer facing websites and in-store promotions, but that means nothing to a consumer if they can't get their hands on products. Retailers who are behind in their ability to execute the movement of goods and respond to demand through greater inventory visibility and intelligence will lose out.

Target CEO Brian Cornell maintains a healthy supply chain is one of his top-three priorities for this year, after national focus groups revealed that out-of-stock inventory was diminishing the consumer experience with their beloved brand. To remain competitive, business leaders need to begin embracing cloud technology so that they can not only collaborate with their trading partners in real-time, but also respond to sudden bursts in demand or supply chain disruption.

Guido Brackelsberg, managing director, Setlog:
Apparel firms should focus their investment solely on the inbound supply chain as various and sophisticated business application lines already manage the outbound supply chain to the point of sale. It is importanr to structure, accelerate and streamline your inbound supply chain and the entire sourcing process. If apparel firms make an investment on this now, it will generate a ROI in the near future as better processes define better margins.

Peter Needle, CEO and co-founder, Segura Systems:
Apparel brands are under pressure to meet the multifaceted demands of the modern consumer, which for many may seem like an almost impossible task. Price and quality remain the primary drivers of consumer purchasing decisions, yet businesses are expected to offer greater individual choice, bring designs to market more quickly, and provide flexible delivery of goods, all while operating to higher ethical standards.

To succeed in this environment, businesses need to be able to operate more adaptable and efficient supply chains. This means introducing systems and processes that will help them identify areas for cost savings, make it easier to switch between suppliers as requirements change, and ensure all garments are shipped on time. By gaining greater oversight over their supply chains, businesses will also be able to invest in building strong relationships with a wider range of trusted vendors and making their supply chains more profitable for all involved.

Andrew Brown, group managing director, Fast React Systems Limited:
Investments should be focused on technology that supports fast access to accurate, up-to-date information, allowing improved decision making and driving improved business performance.

Specific requirements will vary, depending on the capabilities of existing systems. Implementing major projects, such as warehouse management, demand planning and ERP can bring huge benefits, but are also huge initiatives and take considerable investment, resources and time.

Priority should be given to eliminating heavily manual and disconnected processes, which are those often not well handled by systems such as ERP. Consider a 'best of breed' and 'point' solutions approach, which involve less cost, time and risk, and can deliver significant, rapid and sustainable improvements in business performance specifically in those areas which the market is demanding, such as cost and lead time.

Ultimately, investments of this type will deliver a more compelling ROI and more sustainable competitive advantage. For a retailer or brand, the priority is likely to be investing in a PLM or buying office solution; for a supplier or fabric mill, capable, visual planning tools (capacity, materials and critical path all working together) are vital to eliminate the many manual, disconnected processes that still exist. These tools need to work with, and are typically linked to, both the business (ERP) system and a good RFID (radio frequency) based shop floor system to provide 'end to end' visibility and control.

Mark Burstein, president of sales, marketing and R&D, NGC Software:
PLM 3.0, or "PLM as a Platform," is one of the most important investments that apparel companies can make. The ability to react quickly to information anywhere in the extended enterprise – upstream or downstream – is critical to helping companies achieve faster speed to market, increase full-price sales, reduce markdowns and meet profit goals. This can only be achieved by connecting all the systems and data in an enterprise and turning PLM into an enterprise hub, which we call PLM 3.0.

By definition, PLM is a planning system, but the ability to react is just as important. Companies need a feedback loop so that as things are selling in the stores, everyone has access to sales information. If products are selling quickly, make more of them; if the merchandise isn't moving, stop production on it and cut your losses.

Planning is very important, but reacting is even more important. The best-laid plans can be compromised because of unexpected circumstances. Materials may not arrive on time. The factory may be overwhelmed, causing schedules to slip. Quality samples may be rejected, or shipments may be delayed in customs or held up by labour strikes. Companies can only react through connecting systems and data, and that's what PLM 3.0 provides.

Céline Choussy-Bedouet, CMO, Lectra:
Innovation is the impetus of success. Brands, retailers and manufacturers must accelerate investments in innovation, selecting those that will give them a real competitive edge.

On the technology side, there is a proliferation of new digital solutions. Fashion companies should definitely accelerate investments in:

  • PLM platforms integrating dedicated fashion applications, in particular for design and product development, that improve time to market while encouraging creativity.
  • 3D/2D collaborative development solutions to test out new ideas visually, reduce the number of costly prototypes, and make pattern corrections more rapidly.
  • Training and support: a prerequisite to ensure successful implementation and a rapid return on investment.

Susan Olivier, vice president, Consumer Goods & Retail industry, Dassault Systèmes:
Today's consumers don't just buy products, they buy experiences. Many times consumers don't know what they want, and they may struggle to find the right products, categories and brands in a store. They become frustrated before ever entering a fitting room, and leave without spending. But a store that creates an inviting environment, an easy shopping experience and potentially different options for engagement also creates a positive emotional response, encouraging the consumer to shop longer, try and buy.

Digital solutions can turn this desirable shopping dream into a profitable reality. Investment in visual assortment planning and 3D merchandising allow brands and retailers to see the product collection as it evolves, and see the planned assortment allocation from the perspective of the consumer. They can assess how easy is it to navigate the actual store. They can also re-use digital assets for interactive experiences online and in-store. And even if the consumer ultimately completes their purchase journey online, the retail environment is still the place to build lasting emotional connections. So winning brands and retailers will be those that not only develop the right products but also engage us longer at the point of purchase with a satisfying retail experience.

Bill Brewster, vice president, general manager, Enterprise Software Solutions, Gerber Technology:
Apparel firms should be focusing on technology that supports business agility, improved profitability and allows them to stay on trend all while bringing their vision and inspiration to the market quicker. This includes a portfolio of fully integrated, best of breed technologies that enable and support communication, collaboration and visibility throughout the product planning, development and supply chain processes.

Christophe Therrey, EMEA sales and marketing director, Centric Software:
Many apparel companies already work with some form of PLM system, albeit with varying degrees of sophistication. Traditional PLM systems have been very appealing to those in design, merchandising and sourcing. Extending the value proposition beyond traditional PLM with a mix of mobility, new technologies and non-traditional thinking, can create powerful new ways of working to enable brands, retailers and manufacturers to create better products and grow.

Enlarging team contributions to include participants typically shut out of classic, traditional systems such as transportation, trade compliance, inventory management, warehouse operations and even finance, for example, allows for efficient decision making based on a "single source of the truth". Expand this now backward into your supply chain to allow enhanced, real-time supplier collaboration and economies can be had across the development process at a macro level.

Bob McKee, global fashion industry strategy director, Infor:

  • Move to the cloud and outsource the hassle of managing hardware, software upgrades, patches, fixes etc to gain agility and focus on IT adding strategic value. Incorporate new acquisitions or start new international operations in a matter of days and for a predictable cost
  • Invest in Digital Transformation and Information – the presentation of a brand to a given target audience and end-to-end near real-time information will be critical to getting in front of customers, winning business, confirming that business is profitable and ensuring customer loyalty.

Sander Schoneveld, managing director, K3 Software Solutions:
Looking at the whole business: Most important is to remain attractive to consumers.

Consumers are able to gather information concerning products from everywhere, and purchase goods making both rational (cost, speed and reliability) and emotional decisions. At the same time, the majority of cities deal with store vacancies and have difficulty attracting crowds. There are shopping centres that are completely deserted and more and more stores fall over, reducing the amount of available outlets for the (mid-level) brands.

Companies need to invest in building a great shopping environment that covers physical and non-physical consumer contacts, creating a single look and feel experience across platforms and channels, while ensuring that the products sold are the right products at the right price at an expected quality level.

The investment should support the creation of one single environment that handles all channels, creating a single look and feel and a positive consumer experience. Moving to a single IT environment, replacing solutions that support different processes, supporting product development and consumer sales and all the processes in-between, will increase the availability of information across different functions. It is much easier to share and make data available across functions and to consumers when they are all kept in the same system.

The effect of point solutions is that they split up the IT landscape into multiple fragmentations that need to communicate (mostly using overnight interfaces to load data). The IT infrastructure needs to feel like a single environment that holds one version of the truth and is able to provide correct data every second of the day, each day, and all day. A consumer wants product details, the best and right price, and to know where his /her purchases are and when to expect them. 

Click on the following links to read other reports in this management briefing:

Apparel software trends 2016 – Key supply chain challenges

Apparel software trends 2016 – Tools to tackle the issues

Apparel software trends 2016 – What else to watch?