Sourcing Journal Radio

Amid the retail disruptions of the pandemic, consumers began shopping online more than ever before. But escalating e-commerce sales are not solely a positive for retailers’ profitability.

In AlixPartners and Sourcing Journal’s recent industry survey: “2021 Fashion in Focus: Investing in a Future Forged by Adversity,” respondents were largely split on whether the growth in online sales had an accretive or dilutive effect on their business, and a number were unclear on the impact. Serving a customer in store has a different cost structure than fulfilling online orders, and the labor, operational and other expenses for the latter can add up. This makes it more difficult to calculate the actual net financial result of digital sales, explained Bryan Eshelman, a managing director at AlixPartners, in a recent conversation with Sourcing Journal founder and president Edward Hertzman.

“It is a hard, tangled web of costs and activities to untangle and really truly understand,” said Eshelman.

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Online retailers have a recurring returns problem, especially in the footwear category where they can be as high as 30 to 40 percent. As e-commerce continues to grow at an exponential rate, this challenge will unfortunately only become more prevalent. But, one company is combining 3D foot scanning and artificial intelligence (AI) in an effort to eliminate the issue entirely and give consumers the right shoe fit every time.

Aetrex recently unveiled FitGenius, an AI platform that is now integrated into their foot scanning technology. The program works by matching shoppers’ unique foot profiles, which are gathered from a foot scan in store, with a retailer’s footwear catalog. 

In a chat with Sourcing Journal, Larry Schwartz, CEO of Aetrex, spoke about the data that can be collected during a foot scan.

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For sourcing professionals, the pandemic has served up a seemingly never-ending series of logistical quagmires. Factory shutdowns, transportation capacity constraints and cost spikes, and raw material shortages forced companies to adopt plan B, C or even D.

Outside of the direct effects of Covid-19, environmental disasters and geopolitical upheaval threaten to abruptly cut off supply or derail shipments. And when time is of the essence, it pays to have planned ahead.

“Companies have to start thinking about developing their own contingency plans and risk-mitigation playbooks,” said Murali Gokki, managing director at AlixPartners, who leads the company's apparel and fashion services as part of the retail practice. “These need to be institutionalized; they no longer have the luxury of waiting for an event to happen and then putting their best brains in a room to think through a solution.”

Listen to this episode to learn how to navigate freight hurdles heading into the holiday season, what it will take to scale nearshoring and onshoring, the hidden impacts of inflation that are hurting bottom lines, where to start with digital design and production management tools and how companies should approach the supplier-buyer relationship.

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During the pandemic, home goods sales have soared as consumers prioritize spending on their living spaces. At the same time, shopping migrated online and individuals gained more time to investigate their purchases, leading them to invest in quality, organic and sustainable goods.

Eco-mindedness is not solely a millennial or Gen Z trait. During a recent conversation with Sourcing Journal founder and president Edward Hertzman, Corinne Bentzen, CEO of bedding and bath product retailer The Company Store, explained that consumers across all generations are considering the environmental impact of their purchases. “The baby boomers are becoming more responsible as they are bringing grandkids into this world and they want to leave a better footprint behind,” Bentzen said.

Discover more about how consumers are weighing sustainability in their home purchases and why TENCEL™ is a fit for The Company Store’s promise of conscious, comfortable linens.

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For fashion to break out of its disposability rut, it needs to focus on quality. And quality begins with using materials that can last.

A key tactic to reduce a garment’s impact is to get more use out of it. Being able to wash and wear something 40 times instead of five times makes a huge difference in the overall calculation of its environmental cost, explained World Textile Sourcing (WTS) CEO Luis Antonio Aspillaga during a recent discussion with Sourcing Journal founder and president Edward Hertzman. “Sustainability works when the garment has a longer life,” Aspillaga noted.

Hear more about WTS’ experience working with TENCEL™ and how quality relates to sustainability.

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Sustainability has been a top talking point for the apparel supply chain in recent years, but it’s safe to say that mere awareness doesn’t cut it anymore. Results are a must.

To get there, brands have to set “measurable and quantifiable” goals, according to Min Zhu, Ph.D., technical director, U.S. and Canada softlines at SGS North America Inc., a testing, inspection and certification company. But when the sustainability conversation extends beyond the brand, suppliers typically need more explicit directions and training to set these goals in motion.

“The training that we provide to the supply chain should not just end at the Tier 1 supplier,” Dr. Zhu said in a conversation with Edward Hertzman, founder and president of Sourcing Journal. “We should go as far as we can reach to ensure the mutual understanding of the brand’s commitments, goals and expectations—this is critical.”

Listen to hear about SGS's Sustainability Ambitions 2030 roadmap.

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Got data? Of course, you do. Most companies are drowning in it.

But useful data? That’s a different story.

“Talk to brand executives or decision makers today and no one’s really saying they don’t have enough data,” said Dan Leahy, co-founder and CEO of retail product decision platform MakerSights. “But ask people within a brand responsible for bringing products to market: ‘Do you have the data at your fingertips important to guide the actual decisions you need to make?’ then the results are a lot more mixed.”

In this chat, Leahy discusses why the need for actionable data is more urgent than ever.

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While the Covid-19 pandemic hit most retailers hard, it created uniquely intense challenges for Hotter Shoes. The vast majority of the footwear retailer’s sales were to older customers who patronized the company’s brick-and-mortar stores. These customers, who are not digital natives, were among the least likely to shift to buying online. Hotter needed to build up its e-commerce presence and appeal to a new group of shoppers at the same time.

While the company implemented First Insight’s “Voice of the Customer” predictive analytics to make more accurate design, buying and pricing decisions back in December 2019, the comfort footwear manufacturer and retailer has since gained a longer-term benefit of its deep digital transformation: attracting newer, younger shoppers.

In this chat, Ian Watson, CEO of Hotter Shoes, and Greg Petro, CEO of First Insight, talk with Sourcing Journal founder and president Edward Hertzman about how Hotter Shoes has expanded into a younger customer base.

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Sustainability doesn’t always have to be a hefty investment.

For apparel brands that don’t know where to begin tackling sustainability, starting small can be a great way to build out a more eco-friendly supply chain.

As brands prioritize using more sustainable raw materials, adopting circularity initiatives or setting science-based targets, they often overlook labeling as an area for quick improvement.

And while sustainable labels may be a cost-effective means to reduce waste, developing these labels also reflects a deeper, more holistic commitment to brand sustainability goals, according to Jimmy Christopher, group sustainability officer at apparel labeling and packaging solutions provider ITL Group.

In this chat with Sourcing Journal founder and president Edward Hertzman, Christopher and Sabine Watson, ITL Group’s global brand manager, discuss how to make labels more sustainable.

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Marks & Spencer is listening to its customers.

Five years after enlisting First Insight to assist in determining design, buying and pricing for lingerie products, Marks & Spencer (M&S) has scaled up the company’s “Voice of the Customer” product testing.

The U.K.-based retailer has since expanded the consumer-driven predictive analytics software platform to more than 50 departments in apparel and footwear, covering both its own private label brands and third-party brands, according to Elaine Wheeler, head of digital product development at Marks & Spencer.

In a chat with Edward Hertzman, president and founder of Sourcing Journal, and Greg Petro, CEO and founder of First Insight, Wheeler noted how testing has been fruitful for M&S.

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