Recently, just-style published the ‘Outlook 2018: Apparel industry challenges and opportunities’. According to a panel of consulted executives, 2018 is set to be a year in which disruptive trends that have been on the horizon start to become the norm for the apparel industry and its supply chain. On behalf of the International Apparel Federation (IAF), Matthijs Crietee answered a set of questions. We gladly present a short summary.
Biggest challenges and opportunities facing the apparel industry
The main challenge and the main opportunity at the same time is to actually make the available technology work to take costs out of the supply chain. As we speak, many factors conspire to make the implementation of all the available technology in our industry very difficult. However, there will be a growing number of positive examples of technology implementation in 2018, ranging from semi-automated factories to the internet of sewing machines to digital samples. Another opportunity for brands is to sell across the world through the growing number of global online sales channels.
Getting the country-product matrix just right is the best way to source in 2018. This means taking into account the product’s physical requirements, but also matching the country’s geographic position and firms’ abilities with the particular creation cycle time required for each product. Speed is the new buzzword, but it has no value if there is no shop floor logic behind it.
Apparel firms and competitiveness
Winning buyers are active in forging longer term relationships with their suppliers. They are scrutinizing their buying behaviour’s impact on their suppliers ability to grow more competitive. Winning manufacturers are not waiting for production orders. Instead, they are offering production as part of a broader service package, for example being helpful in sourcing the right raw materials.
Concerns and expectations
A real threat is online retail dragging the industry into a low price spiral with renewed vigour. The price instrument seems to have been given a new and unfortunate prominent position. On the one hand, the industry is doing its best to give new value to fashion. On the other hand, globalization of online platforms, together with a growing competition among these platforms and still very high costs of returns, could fuel retail price wars that will again erode the consumer’s value perception of clothing. Translating value generated earlier in the supply chain to resonate with consumers is one of the industry’s big challenges for 2018.
Outlook 2018 in its entirety
If you would like to read the full answers, please visit the just-style website (subscription needed). There, you will also find the answers from other members of the executives panel, such as Marc Compagnon (Group President Li Fung), Achim Berg (partner McKinsey), Edwin Keh (CEO HKRITA) and Richard Helfenbein (President & CEO AAFA).