Amazons success is based on consistent and continuous innovation, such as its Prime Wardrobe service

Amazon's success is based on consistent and continuous innovation, such as its Prime Wardrobe service

Almost the entire US garment retail sector is in trouble, yet companies such as Amazon are moving ahead. Brick-and-mortar stores cannot compete with Amazon. Instead, in order to succeed they must out-Amazon, Amazon, writes David Birnbaum.

When we see Ralph Lauren, America's iconic brand, going into a state of decline, it is past time that we recognise almost the entire US garment retail sector is in trouble. 

I suggest this fundamental problem has an equally fundamental cause: The industry has failed to keep up with the changing demands of its customers.

We are just now being told that the answer to our problems lies in investing heavily in speed-to-market and moving product development from the customer's home country to their suppliers' home country.

Yes, these are necessary strategic changes, but in truth they have been necessary strategic changes for the past 20 years. The industry is failing because its players have been a day late and a dollar short. Consistently, playing catch-up is a strategy for failure. 

Yet even now, companies such as Amazon are moving ahead. Why them and not us?

We are told the market is being taken over by e-commerce and that in order to survive, brick-and-mortar must compete with Amazon by moving to e-commerce.

I suggest this is nonsense. It matters little where you are selling, but rather what you are selling. Brick-and-mortar stores cannot compete with Amazon. To succeed they must out-Amazon, Amazon.

Amazon's success is based on consistent and continuous innovation. It is able to solve today's problem, today. For example, fit is a $360bn problem facing e-commerce. Amazon's Prime Wardrobe solution is to allow each of its customers to order a box full of garments and, when the box arrives at their home, they have the opportunity to try-on each piece and to return free-of-charge those garments that do not fit. 

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The problem with the Amazon solution is that while it helps the consumer, it does nothing to solve the $360bn gorilla facing Amazon's suppliers.

The brick-and-mortar store can do better: Create a hybrid store. Move the inventory from the store to the central warehouse, together with the alteration department. The consumer goes into the store, tries on the garment they want to buy, at which point an in-house tailor takes measurements for alterations, which are carried out at the central warehouse. The garment is then shipped directly from the warehouse to the consumer's home. 

What is the problem? By not keeping inventory in each branch store, the brick-and-mortar operation actually reduces cost while giving the consumer personal hand-on service that Amazon cannot provide. Talk about win-win.

The small-guy factory

While this will work for the major brick-and-mortar retailers that buy thousands of units for each style, what can be done for the small guy with one or two stores, who buys 50-100 pieces?

We can find an answer that will solve the small-guy problem, if only we look: The small-guy factory. We start with 3D fit. We create an algorithm to reduce the data for 50 different fits into 10 sizes and create a 10-size marker, and cut. The people who make the stuff do not care about sizes.

What is the problem? We have the technology. The stuff can be made with no additional cost or increase in time. If government is looking to reshore garment production, the small-guy factory provides the right strategy. Do this correctly and the government will provide funding. After all, if governments are willing to provide hundreds of millions in funds to build an automobile plant that will employ 300 workers, a few million to build a factory that will employ 400 workers must be the deal of the century. Talk about win-win-win.

Moving forward, we can do more than solve today's problems, today. We can solve tomorrow's problem today. 

Ask yourself this: Why is Nike so successful? I think the answer is technology. Whatever the new technology, if it can be adapted to shoes, Nike is willing to invest millions to bring that technology to the footwear market. 3D printing and custom fit are but the latest advances that separate Nike from its competitors. We must adapt this Nike strategy to our industry.

Look ahead and ask yourself, where will the clothing industry be five years from now, ten years from now? And what must I do to ensure my company gets there first? 

Planning to be the next Zara is not the answer. 

The fabric of the future

Here is one idea. In the next decade, the clothing industry will be dominated by new hi-tech materials. There are literally hundreds of established companies, start-ups and universities working day-and-night to come up with the fabric of the future.

Their problem is that while they may know everything there is to know about the technical side – the chemistry and physics – they know little about the clothing trade.

A company large enough to put-up the necessary capital, with the vision to move in this new direction, can become the industry leader ten years down the line. At the outset, it must select existing materials (or materials in development). At the second stage it must start with a purpose that requires new materials and work with the specialists to develop the necessary special-purpose material. 

In business, we must accept that change is the only constant.

To succeed, we must be in the forefront of that change. 

Solving yesterday's problems tomorrow is a formula for suicide.

Solving today's problems today is good, but we have to do better.

The best strategy is to solve tomorrow's problems today.