BUSINESS WITH CAUTION & INNOVATION WILL BE THE FUTURE
Dark…. This is the image in mind of most of the people irrespective of business segment they belong to at the moment. To kill this darkness and lit some light of hope TEAM PERFECT SOURCING recently organised a webinar with experienced sourcing experts of the industry. The objective of webinar was to find a way through this dark tunnel of uncertain business.
The key panelists of the webinar were Devender Gupta, Founding Partner, Asmara Apparels; Alpana Razdan, Country Manager, Falabella and Virender Sharma, GM Sourcing & Quality Apparel & Accessories, KAS Asia.
The session that started with formal introduction of the speakers took an interesting turn as and when the discussion went into details of what will be the future of fashion and retail industry; What is the situation of orders currently; what will be the major product categories; how online retail will take up a major chunk of business; how styles, volumes and designs will undergo extreme pressure on efficiencies, production and innovation, etc.
TOP SOURCING TRENDS
• Seasons – four seasons or lesser
• Two big seasonal developments
• Year round co-creation with partners
• Read and react models
• Test and chase models
• Digitalization of supply chain, sampling, presentation, meetings, negotiations.
• Fast lead times
• Finishes will become mandatory
• Home décor, textiles, kids and casual wear will be on top list of sourcing.
• 3D sampling will be catching up
“The business of apparel is shrinking not only from India but from all over the world; and we do not see the situation becoming better before the end of 2022,” said Devender. He pointed out that the online medium is going to see an increase of 30 to 40% and thus the retailer who has a strong online presence will not feel the pain much.”
Alpana said, “Huge inventory was one of the biggest challenges when the lockdown happened and strong digital and logistic network to facilitate online buying is the key. Buyers will be buying very close to the season; they are testing the market before piling up stocks and are not investing too much in huge inventories. Buyers are very cautious of what are they buying?” She further added, “Categories such as home textiles, home décor, kids’ wear is picking up now. Cash flow crunch is a biggest problem. Retailers are pushing for margins, price sensitivity and the seasonal buying has taken off for some time.
“Harsh reality is that Covid impact is still far from over. We are already seeing bloodbath in global retail industry. Big names like JCP, Jcrew, Neiman Marcus, True Religion, Modells, etc have filed for bankruptcy protection. Retailers are downsizing their teams, cutting their inventory cost, looking at liquidating existing stock and looking at all other venues to cut down their operating cost.There will be reduction in both demand & supply.” said Virender.
He further added, “closures, shrinking store footprint, rising level of unemployment and change in consumer behaviour will drive the demand. On the supply side, near shoring, on-shoring, trade barriers, factory closures, ability of countries to deal with Covid will impact the numbers.” They also mentioned that a big shift towards products with finishes like antimicrobial will happen in fact it would become a norm for any product.
As far as lead times are concerned buyers are not going to work on longer lead times as they do not want to get stuck with inventories. Shorter lead times and fast product cycle will have relevance more than any day before.
Changes are happening in trade very swiftly and new policies are being introduced every now and then as every country wants to safeguard interest of their own citizens. Many retail chains are already trying to shift sourcing closer to them. For instance European buyers are trying to work with manufacturers in and around Europe only so that they can buy close to season.
In terms of manufacturing, buyers want to associate now with companies who are well established, reliable and have pockets to invest with buyer as payment cycles will also be stretched. However, at the same time factories who can follow all norms of compliance related to Covid 19 are safe and hygienic will gain weightage as compared to other. Covid prevention conditions are more important today than any other.
Virtual showrooms, 3D sampling, e-negotiation, all are becoming a reality now. Product presentation will not remain the same and one-o-one meetings, exploring garment by hand is no longer possible so you need to be perfect in costing, negotiation, presentation and finally delivery.