The fashion industry is changing - faster than ever - as firms face intense pressure to produce more styles in less time, without losing sight of quality, fit and cost. On top of this, the growth of new fashion markets in emerging countries, and increasingly connected consumers, add additional challenges. Helping unravel this complexity is Lectra, which is focusing its expertise and software on making sure brands, retailers and manufacturers have the tools to deliver into the future.

According to Edouard Macquin, executive vice president of global sales at Lectra, change is a constant, and should not be feared. "The economy is moving with or without us," he told delegates at a recent seminar at the company's headquarters in Bordeaux, adding that a key challenge for fashion businesses is to adapt so they can stay competitive and grow.

"Changes in a business model bring more sustainable value than technological evolution. This means it's not only a question of changing technologies, or adding a technology, it's also a question of changing business models," he explained.

Shifting economics of global manufacturing
So what exactly is changing? For one thing, "there's still growth, there's still opportunity," according to Luis Velazquez, Lectra’s director of business development.

In 2000, the global fashion industry was worth US$720m and grew to around $1.1trn in 2010. By 2020, this figure is forecast to soar to $1.7trn. In terms of sales, clothing grew 5% year-on-year between 2000 and 2010, and is set to increase 4% year-on-year to 2020.

Breaking it down into market share, producer countries such as China, India and Brazil are also becoming more important as consumers. With a 10-11% market share of the fashion industry in 2000, these three countries combined are set to control a third of the marketplace by 2020.

Although China, India and Brazil spend less on apparel, they are witnessing higher growth than traditional markets such as the EU and US. Between 2012 and 2025, Brazil’s apparel spend is predicted to increase 39.9%, China 71.1% and India 73.9%.

The industry’s supply base is also starting to shift. Although mature markets - including China, ASEAN and the Indian region - still manufacture around 90% of the apparel produced globally, proximity sourcing - seeking suppliers closer to core consumers - and dual sourcing - having the bulk of products made in the Far East and replenishment from locations closer to shoppers - are growing in popularity among brands and retailers. The main advantage being improved speed to market; a necessity for today’s fast fashion businesses.

"The cost competitiveness of [supplier] markets around the world is actually changing," explains Velazquez, noting that: "In reality, there are both high and low cost manufacturing options in almost every region of the world. This is actually really important...what's starting to happen is you have both producers and consumers in every part of the world, and [companies] are having to reorganise themselves to take advantage of this fact."

There is also the changing role of suppliers, who are now embedded earlier in the product development process, especially when it comes to social responsibility. "This is a trend we can see today with our customers," Laetitia Hugé, business consultant at Lectra, noted.

Add to this the fact that social media and omnichannel are creating a much more informed consumer who is constantly comparing and sharing prices online and more often than not goes with the cheapest, and it makes for an increasingly complex environment. These ‘connected’ shoppers largely fall within the millennial demographic - consumers born between the 1980s and early 2000s, who represent a third of the world’s population.

This category will account for around 40% of all retail sales by 2020 - and is a population "everyone needs to take into account", according to Laura Gelis, the company's global marketing manager for fashion. Fashion brands and retailers need to find ways to capture their attention because they're fickle, they "go from one product to another very easily", she explained.

And consumers in different markets want different things too, including fit. Return rates for online clothing retailers currently stand at around 30%, and Gelis believes it’s important is to understand why shoppers return clothes - largely because of poor fit.

"At Lectra, we think that if the product is the hero then the fit is its weapon," she emphasised. Citing a recent survey that showed some 62% of people are not happy with the fit of clothes, but 85% of consumers say they will buy from a brand if it fits well, Gelis said: "One size does not fit all", adding: "Here is the opportunity for brands to get loyal consumers by putting emphasis on fit".

Changing business models
Although these changes are "nothing new", the level of intensity of the challenges they present is increasing, according to Hugé.

Lectra believes that in order to respond, businesses need to have organisational agility; fast decision making; team alignment; individual efficiency; and real-time data accuracy and visibility so they can manage complexity in a changing environment.

And it's an ongoing cycle. "You need to change, but you will need to change again tomorrow and again the day after, and again the day after," she said, adding: "You cannot set a new business model and keep it forever, because you don't know how the fashion industry will be in five years. So you need to be agile."

The key focus for Lectra is to make sure fashion firms have the right technology and business processes in place to deliver on these challenges. Ultimately, the technology firm is helping brands, retailers and manufacturers to adapt their business models - be it implementing changes around design or product innovation, to meet strategic objectives.

Its Fashion PLM (product lifecycle management) solution can help reduce time to market and increase productivity, break down internal data and process silos, enhance quality and regulatory compliance, improve supply chain collaboration, and drive innovation - essentially enabling companies to create better products, faster.

The end-to-end solution aims to help companies build a profitable collection while addressing seasonal trends, consumer expectations and time constraints. Specifically, its new calendar management enables managers to survey and adapt calendar milestones to constantly carry development cycles forward.

One company that has embraced Lectra’s Fashion PLM is Italian luxury men's wear brand Brioni. With the aim of being able to better control information flows between different groups within the business, Brioni integrated the product development and ERP modules into its business in March.

The company, which is part of French luxury, sports and lifestyle group Kering, has subsequently been able to manage the entire fashion development process by optimising costs and facilitating deliveries across different distribution channels.

Lectra's Modaris 3D design and prototyping system, meanwhile, is designed to enhance the fit, style and quality of garments. By applying pattern making techniques to a virtual fitting room environment, Modaris helps to streamline and standardise the fit process - helping to boost speed to market.

Tesco’s F&F clothing brand is seeing the benefits 3D virtual prototyping can have. After investing in Lectra’s Modaris 3D software, F&F cut the number of samples per style from 1.9 to 1.5 in six months.

"3D is not a gimic, 3D is a business reality today," Philippe Ribera, software marketing director at Lectra said, later adding: "3D could become the engine motor of the processes of PLM." But 3D is as complex in terms of change management as a full PLM project, he concedes. It’s not just about adapting a process to a new technology, companies instead "need to resync [their entire] process, which is much more complex".

As part of its mission statement for 3D to help customers dress a body with the right fabric, Lectra plans to establish an innovation lab inside its headquarters next year.

"Technology, retail, mindset are evolving fast, so one of our challenges is to evolve as fast as the market," Ribera said. With many companies experimenting with various technologies, Ribera believes the complexity of developing different products means one of the future challenges will be integrating them all.

Lectra's vision
Not only is the fashion business changing, but so, too, is Lectra's business model. Over the last five years, the French firm has invested EUR50m (US$56.5m) in its business, adding another 200 people to its team of 1,500, hiring 40 new R&D engineers, and putting EUR8m into marketing. Of its 1,500 employees, the company has changed more than 800 to "be ready for the next 20 years".

"Technology is nothing without expertise and approach," said Anne-Laure Louis, fashion PLM marketing manager. "We do believe that we have the best technology on the market...but even if you have the best technology on the market, if you don't have a good approach [or] good processes in your company, it will be a failure."