America's Future webinar
Speakers: Apparel/fashion industry must continue disrupting after this disruption
Posted October 29, 2020
By Devin Steele (DSteele@eTextileCommunications.com)
During a two-plus hour webinar, “America’s Future,” organized by McKinsey Company this month, five “Captains of Industry” offered insights into the future of the U.S. apparel and fashion industry amid numerous trends – some accelerated by the COVID-19 crisis.
Speakers included Dr. Trevor Little, professor of Textile And Apparel Management, Wilson College of Textiles at N.C. State University, Raleigh, N.C.; Will Duncan, executive director of SEAMS, Wake Forest, N.C.; Dr. Mike Fralix, president & CEO of [TC]2, Raleigh, N.C., who also served as moderator; Anastasia Vouyouka, CEO of eTelestia in Greece; and Glenn Jackman, senior international trade manager, Economic Development Partnership of North Carolina (EDPNC), Raleigh, N.C.
Fralix introduced the program by reviewing some of the changes the pandemic has spurred, including social distancing, face masks, virtual meetings, the slowdown of hotel stays and airline travel, the rise in online shopping, the increase in digital supply chains and expedited advancements of on-demand microfactories and 3D technologies.
“It has caused disruption to all of us and caused us all to rethink things,” he said. “At [TC]2, we’ve been rethinking things for a long time, but now we’ve REALLY been rethinking. We’re totally committed to ‘cool.’ We want to do things that are cool. But in addition to that, we want to encourage companies to change and be cool, too. That is TC2.”
In his presentation, “What is the Future of Fashion and the Industry?” Little of N.C. State’s Wilson College of Textiles offered interesting insights into a number of factors and changing dynamics that are affecting everyone’s businesses and will continue to as we climb out of this crisis.
Among them are consumer demographics, noting the rising power of Generation Z, born roughly between 1995 and 2010. He noted that they have never known a world without internet, and currently represent 25 percent of consumers. By 2026, they will constitute 82 million people – a significant market.
“Their digital sophistication is advanced, so fashion’s future may be its digital sophistication,” he said.
Likewise, Generation Y or Millennials (born between 1980 and 1994) are equally influential, representing around 72.1 million people in the U.S. And though Generation X (born between the mid-1960s and around 1979) have the highest debt burden, they do have discretionary income and significant buying power, Little noted.
He then asked: Are you in the conversation? He cited two rules. Rule 1: Products are conversations that open up dialogue with the consumer and, in turn, consumers talk about your product. And Rule 2: Products have intrinsic and extrinsic attributes, with features built into the product being intrinsic and features external to the product are extrinsic.
“Extrinsic attributes create the image, while intrinsic attributes create the product,” he said. “The future will require both, and the corporate entity must show empathy toward a cause.”
As Fralix touched on, Little noted that the pandemic has affected everyone: consumers, businesses, supply chains and products.
“Maybe we needed a significant event to show how creative and resilient we can be,” he said. “Through this event, you will learn of continuing efforts and research to bring new thinking to our industry. As you may have deduced, the biggest change is how we interact with consumers.”
Interestingly, he pointed out that because teleconferencing has become the way many of us communicate these days, fashion design and development has turned its attention to upper-body garments that make web attendees look “professional.” And the lower garment, hidden from the camera, has now become the “comfort” garment, he added.
Also impacting the business and the fashion world are product development calendars, he pointed out. Noting that calendar times vary from one month to 14 months, he cited three findings along those lines: 1) There is no obvious connection between time and business success; 2) Making samples takes a lot of times nowadays; and 3) Time is related to the organization structure in place.
“We think that because samples take a lot of time, we can replace a ‘spiral’ or two in product development by using 3D prototyping,” Little said. “So, if sales samples are in your current practice, 3D prototyping may be in your immediate future.”
Other notable changes occurring fast include the workforce, with the future depending on how we attract and train employees; virtual events; and collaboration.
“We need to collaborate with our consumers, our customers and with each other,” he said. “Collaboration must extend from the designer to the consumers and all the touchpoints along the way. Collaboration and collaborative tools will be needed to fashion a future that is rewarding and exciting.”
Reshoring the supply chain
In his presentation, “The Role of America (Inland & In the World),” SEAMS’ Duncan noted that in recent weeks, his association has been surveying members to gain insights into how their businesses stand today compared to pre-COVID-19. Summing up results, Duncan noted that most companies polled were doing well leading up to the pandemic, but all were significantly impacted when it hit. The survey of cut-and-sew suppliers and technology providers – a mix of large, medium and small – showed that domestic and offshore sales were trending up or were steady for all companies prior to the crisis.
Duncan indicated that of late he and his staff are getting multiple calls a day from brands, especially emerging brands, that are looking to source fabric or for domestic cut and sew – which should be a good sign, except for the fact that multiple caution flags dot the road back to reshoring the supply chain.
“Let's face it: Pre-pandemic, only about 3 percent of the apparel and footwear made in this country was sold in this country,” he said. “So, where are we, really? We have a long way to go.”
He then noted key factors that are preventing significant growth of the U.S. sewn products industry.
“One is that brands and retailers must change from cost-based sourcing strategies to those that compare landed duty against manufacturing costs domestically,” he said. “We can't continue to do that. We have to measure it based on what's happening at the cash register, gross margin return on investment, and service. It has to factor in things like markdowns, stock-outs, and all the other associated costs such as the costs of DCs (distribution centers) when the factories can ship direct to consumer."
Another factor inhibiting growth onshore is cut-and-sew capacity and capability, the biggest bottleneck in the supply chain, he said.
“Most of the companies in our industry in this country have less than 50 workers, which is too small for many of the larger or even medium-sized brands,” he said. “If you have 100 workers in your cut-and-sew facility, you are considered very large today.”
Sewing labor operates on tight margins, and many cut-and-sew factories aren’t capable of supporting full package, he continued. And brands and retailers want the same full-package service that they received when they moved offshore, particularly to the Far East, he added.
“And I can tell you that the cut-and-sew companies here in the U.S. that are able to offer full package are turning away customers every day,” he said. “Some of them can't even return calls to people, they are so busy.”
In addition, many of the manufacturing disciplines that were common to the industry 25 years ago have been lost, he said.
“It's rare that I walk into a factory and observe two workers that were performing the same operation, where both use the same method,” Duncan said. “And formal training programs are rare to see within the factory. Plus, the factories are having a hard time attracting labor, and that's the biggie.”
Plus, he added, many factories still have traditional top-down management styles and very low employee involvement, which don’t necessarily work for the younger generation today.
“So for real growth to occur, it will require reinventing our factories,” he said. “Automation is one of the enablers. However, we're still a long way away from having fully automated, lights-out type of factories. Automation is improving. More and more money is being spent there, but not enough.”
Over the past several years, a lot of buzz has been generated around microfactories, or smart factories, Duncan said, adding that he thinks that concept will continue to emerge. Much of the front-end technologies, collaboration and digitization for the microfactory is already in place, and has been for years, but the problem with many companies when they try to embrace the microfactory is that they still have to cut and sew – “and they struggle mightily to get that put in place,” he said.
“However, I think the factory of the future will be capable of embracing all of the above (customization, direct-to-consumer) and more,” Duncan said. “It will be much more of a smart factory that will embrace robotics and other forms of automation where it's applicable and available. One of the things with automation today is it's not in most cases flexible enough to keep up with most of the demands of the consumer and the brands and retailers.”
The smart factory, he continued, will employ the latest manufacturing technologies regarding systems integration and real-time production control. It will embrace Industry 4.0, which includes machine learning and Artificial Intelligence to more accurately predict and manage performance and cost, he added. And it will employee Lean Manufacturing with lean business practices, lean management and extensive customer-supplier collaboration, he noted.
“This smart factory is basically going to be lean on steroids,” he said.
In a two-part presentation, “Explore Factors & Solutions to Make the Turnaround,” Fralix of [TC]2, and Vouyouka of eTelestia, discussed a number of disruptive technologies such as 3D modeling, waterless dyeing and customization that are and will continue to affect the fashion industry.
Fralix highlighted advancements in body fitting in areas such as realistic avatars to digital visualization and how the pandemic has accelerated online shopping and underscored the need for no-touch body scanning without touching the person. He also discussed robotics, automation and 3D printing – citing an example of KFC testing chicken nuggets made with 3D bioprinting technology in Russia.
“If we can print chicken, we ought to be able to print a T-shirt,” he said. “And that’s going to take place over time. It will be all about making it locally, making it in the U.S. or your hometown. Yes, disruption can be fun if you think about it differently.”
The premise of Vouyouka’s presentation was: How can we help future designers and patternmakers avoid producing badly cut or bad-fitting garments? Her talk covered such areas as sustainability, attracting and training people into the profession and understanding body measurements and differing body shapes.
Jackman of the EDPNC closed out the event by going over available government support options for companies, particularly those exporting or are looking to. His group offers financial assistance to companies for trade show exhibition and other types of support such as market research and help in finding agents or distributors abroad.