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Winning at the Speed of Fashion

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An accelerating, customer-centric, omnichannel world has forced leading Apparel and Footwear players to deliver trend-right collections faster than ever while maintaining a cost-effective and globally-scalable organization. Take a look at how some of the best-in-class Fashion brands are investing in key Fast Fashion tenants to change how they manage product innovation, design, merchandising, sourcing, commercialization and more to win at the speed of Fashion.

Published in: Retail

Winning at the Speed of Fashion

  1. 1. Winning at the Speed of Fashion
  2. 2. 2Copyright © 2016 Accenture All rights reserved. KEY TENANTS. WINNING AT THE SPEED OF FASHION Traditional brands are applying the key tenants of Fast Fashion leaders to win in faster, digital, omnichannel marketplace BEING RIGHT. Bringing on-trend products to target customers BEING FAST. Delivering the product when it’s needed, faster than competitors BEING EFFICIENT. Creating lean, cost efficient, end-to-end operations KEY TENANTS ~ 10% ~ 5% ~30% REVENUE. through trend-right, customer-centric assortments COSTS. through smarter product component sourcing and reuse SPEED. through governed design and product development lifecycle processes LOYALTY. of lifetime customers achieved by being right and being fast AVERAGE BENEFITS
  3. 3. 3Copyright © 2016 Accenture All rights reserved. OVERVIEW. FAST FASHION VALUE STREAM Understanding which Fast Fashion tenant is most important to your brand informs where along the value stream you want to invest in first XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
  4. 4. 4Copyright © 2016 Accenture All rights reserved. VALUE STREAM CASE STUDIES Understanding which Fast Fashion tenant is most important to your brand informs where along the value stream you want to invest in first  INNOVATION. lululemon quickly brings innovations to market through their “lab” stores  PLANNING. Zara leads in fast and agile calendar management  DESIGN. Theory realizes the benefits of 3D design capabilities  DEVELOPMENT. Levi Strauss is on the edge of material development innovation  COMMERCIALIZATION. Brands continue to struggle with managing FOB and landed product costs across their value stream
  5. 5. Copyright © 2016 Accenture All rights reserved. 5 COMPANY OVERVIEW lululemon athletica has evolved into a global lifestyle brand for those seeking to live “happy, healthy, and fun” lives INNOVATION CAPABILITIES • Countries: 373 locations globally, headquartered in Vancouver, Canada • Leadership: CEO Laurent Potdevin is the latest successor to founder Chip Wilson • Fun Fact: The company was named based on the results of a 100 person survey; the “A” in the logo mismatching the company name is a remnant of the company’s original rejected name
  6. 6. Copyright © 2016 Accenture All rights reserved. 6 LULULEMON LAB In 2009 lululemon launched their “lab” stores: a brick and mortar retail location where designers test and get guest feedback on new innovations INNOVATION CAPABILITIES PRODUCT TESTING Test new color, materials, and even product lines, with as little as 100 units per SKU CUT AND SEW Styles are developed, engineered, and prototyped in an open workshop on the sales floor DESIGN IN MARKET Sales Associates are the actual Designers and Technical Developers in- store to get immediate feedback on what consumers are buying Source: http://www.instyle.com/beauty/lululemon-lab-concept-store-fitness-nyc
  7. 7. Copyright © 2016 Accenture All rights reserved. 7 INNOVATION MANAGEMENT Brands have to change how they go to market to take advantage of the customer feedback they get from test stores, like lululemon’s lab INNOVATION CAPABILITIES PRODUCT LIFECYCLE CONSIDERATIONS CALENDAR MANAGEMENT Create a go-to-market calendar that provides for a clear path for bringing innovations to market, in-season, based on results from the lab store DESIGN AND DEVELOPMENT INTEGRATION Rely on an integrated digital design and PLM platform to quickly turn innovations into technical blueprints that can be scaled for full commercialization MATERIAL CAPACITY PLANNING Have the ability to quickly scale material capacity plan, without losing your margin to the cost of doing business just in time
  8. 8. 8Copyright © 2016 Accenture All rights reserved. WHICH FAST FASHION TENANTS IS LULULEMON REALIZING THROUGH CONCEPT AND INNOVATION MANAGEMENT? Being RIGHT Being FAST Being EFFICIENT Bringing on-trend products to target customers Delivering the product when it’s needed, faster than competitors Creating a lean, cost efficient, end-to- end operations
  9. 9. Copyright © 2016 Accenture All rights reserved. 9 COMPANY OVERVIEW Inditex’s flagship brand Zara has positioned itself as the market leader in the world of Fast to Market Fashion • Countries: 88 Countries, headquartered in Spain • Fun Fact: Over 1 Billion products are manufactured at INDITEX owned factories Source: Planet Retail, Accenture Proprietary Framework PLANNING CAPABILITIES
  10. 10. Copyright © 2016 Accenture All rights reserved. 10 OVERVIEW. CALENDAR MANAGEMENT High performing fashion brands effectively compete in a fast to market environment by managing their lines of business on the “right” model Two season model that includes innovation as a part of traditional planning Two season model that spins-off innovation as a part of traditional planning Perpetual season model, delivering smaller collections to market versus seasonal assortments TRADITIONAL MULTI-TRACK PERPETUAL SEASON  In-Season Flexibility  Speed to Market  Cross-Team Coordination  In-Season Flexibility  Speed to Market  Cross-Team Coordination  In-Season Flexibility  Speed to Market  Cross-Team Coordination BASIC ASSORTMENTS FASHION ASSORTMENTS FASHION ASSORTMENTS PLANNING CAPABILITIES
  11. 11. Copyright © 2016 Accenture All rights reserved. 11 INVESTING IN CALENDAR MANAGEMENT Inditex effectively manages multiple business models based on the nuances of each collection MULTI-TRACK PERPETUAL SEASONPERPETUAL SEASON Repeated styles like shirts, tank-tops, and pants Weather-driven items like summer dresses and winter coats Cat-walk and editorial influenced styles like jump-suits and rompers Focused innovation team that develops products based on cat-walk, editorials, and celebrity trends Take on a “test/learn” approach where initial styles are released in limited quantities to see what sells before scaling a full go to market Foundational styles that are sourced well in advance of when they hit stores BASICS SEASONAL FAST FASHION 35% 25% 40% PLANNING CAPABILITIES
  12. 12. 12Copyright © 2016 Accenture All rights reserved. WHICH FAST FASHION TENANTS IS ZARA REALIZING THROUGH CALENDAR MANAGEMENT? Being RIGHT Being FAST Being EFFICIENT Bringing on-trend products to target customers Delivering the product when it’s needed, faster than competitors Creating a lean, cost efficient, end-to- end operations
  13. 13. Copyright © 2016 Accenture All rights reserved. 13 COMPANY OVERVIEW Theory has made a name for itself selling contemporary, high-quality, modern basics, reflecting the atheistic feel of New York City DESIGN CAPABILITIES • Leadership: CEO Andrew Rosen sold the brand to Japanese conglomerate Fast Retailing in 2009 • 3D Fun Facts: All of Theory’s FY17 Fall Seasonal collection will have been 3D designed Source: Optitex Case Study
  14. 14. Copyright © 2016 Accenture All rights reserved. 14 INVESTING IN 3D DESIGN CEO Andrew Rosen wants Theory’s operations to be as innovative as its materials and products DESIGN CAPABILITIES “ ” Theory as a company has always been on the forefront of what’s happening. For us, that is a big part of the DNA of our business. The innovation and execution of our clothing is what we stand for. – Theory CEO Andrew Rosen on partnering with OPTITEX Source: Optitex Case Study
  15. 15. Copyright © 2016 Accenture All rights reserved. 15 3D PRODUCT DESIGN BENEFITS 3D product design facilitates the coherent communication of concepts across the entire Fast Fashion value stream DESIGN CAPABILITIES XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX BRAND COHERENCE Visualize what a line is going to actually look like on the market PHYSICAL SAMPLES Have accurate renderings to support assortment adoption and selling to Buyers INNOVATION Design for what is possible through advanced manufacturing, versus just what you can sketch DESIGN INTENT Start with accurate Technical Packs and BOMs to communicate intent to vendors COLLABORATION Capture design and development edits both internally to the brand and externally with the vendors SPEED TO MARKET Use rendering for marketing, packaging, and commerce channels ahead of commercialization Source: Optitex Case Study
  16. 16. 16Copyright © 2016 Accenture All rights reserved. WHICH FAST FASHION TENANTS IS THEORY REALIZING THROUGH 3D DESIGN? Being RIGHT Being FAST Being EFFICIENT Bringing on-trend products to target customers Delivering the product when it’s needed, faster than competitors Creating a lean, cost efficient, end-to- end operations
  17. 17. Copyright © 2016 Accenture All rights reserved. 17 COMPANY OVERVIEW Levi Strauss & Co. first introduced blue jeans in 1873 and has since grown into a global apparel brand, with a footprint across 110 countries DEVELOPMENT CAPABILITIES • Countries: Sold in over 110 countries, across 50,000 retail outlets • Fun Fact: Belt loops were only introduced in 1922, decades after the first pair of Levi’s went to market in the late 1800’s
  18. 18. Copyright © 2016 Accenture All rights reserved. 18 INVESTING IN ADVANCED MATERIALS Launching in Spring 2016 is Project Jacquard: Levi’s joint venture with Google to bring fashion and the world of innovation one in the same DEVELOPMENT CAPABILITIES Launching Spring 2016 Levi’s will use a conductive yarn, weaved into fabrics, making any clothing item into an interactive, connected, digital surface This Isn’t a Gadget In fact, this should reduce the number of gadgets people have to carry to stay connected Create Something People Want to Wear Everyone has that one pair of jeans they love, this one just brings that pair into the digital world Foundation of Heritage Levi’s has been an apparel market leader for a century, they know what people want to wear Speed to Market Levi’s can incorporate Jacquard into their existing materials manufacturing seamlessly Source: Project Jacquard
  19. 19. Copyright © 2016 Accenture All rights reserved. 19 MATERIAL TIERS AND INNOVATION Brands are focusing innovation on advanced finished materials DEVELOPMENT CAPABILITIES FINISHED PRODUCT Assembled, final product ready for commercialization and consumer fulfillment FINISHED MATERIALS Treated, dyed, and composed materials ready for assembly into a finished product; these have become more complex and proprietary to a specific fashion house PROCESSED MATERIAL COMPONENTS Prepared inputs to support material production (e.g., thread, un-dyed fabrics) that can be sourced as a commodity RAW MATERIALS Cultivated inputs from a plant or animal INNOVATION FOCUS
  20. 20. Copyright © 2016 Accenture All rights reserved. 20 ADVANCED MATERIALS MANAGEMENT The focus on complex materials has changed how brands source and commercialize products DEVELOPMENT CAPABILITIES PRODUCT LIFECYCLE CONSIDERATIONS DEMAND TRANSPARENCY Use a product development platform like PLM to aggregate demand for an advanced material across categories, lines, color, and size mix IP PROTECTION Improve supplier management through incentives and premeditations to protect the intellectual property behind the innovation ECONOMIES OF SCALE Reduce costs by formalizing the process for negotiating and sourcing materials at an enterprise level, 3 years in advance
  21. 21. 21Copyright © 2016 Accenture All rights reserved. WHICH FAST FASHION TENANTS IS LEVI’S REALIZING THROUGH ADVANCED MATERIAL MANAGEMENT ? Being RIGHT Being FAST Being EFFICIENT Bringing on-trend products to target customers Delivering the product when it’s needed, faster than competitors Creating a lean, cost efficient, end-to- end operations
  22. 22. Copyright © 2016 Accenture All rights reserved. 22 PRODUCT COSTING Estimating and confirming the total cost of a product from an estimated FOB at the start of the season, to an ALC at the end of a season COMMERCIALIZATION CAPABILITIES reconcile ALC at the end of a season based on actual POs and invoices, compliant with SOX if necessary post-season SU 16 $ $ ALC use a multiplier based on historic freight, volume, labor, and engineering costs to determine the ELC commercialization calendar milestone > go to market SU 16 β $ ELC determine refined CBD based on layering in components (e.g. materials, colour, trims) design & development SU 16 $ CBD calendar milestone > category design review decision > “go” or “no-go” style based on if CBD > FOB calculate a Target FOB at style level on Line Plan based on historic performance of a similar style planning $ FOB SU 12 - 15 $ FOB SU 16 calendar milestone > line review decision > +/- target FOB based on merchant discretion • Clear decision-making governance rights and trusted data across functional silos • Scenario plan cost by changing CBD factors • Incrementally plan Line down- stream • Multiplier with analytics engine of historic cost data • Use ELC as a determining factor in “go/no-go” • Clear ramifications to Merchandisers for ALC > FOB KEY: Proposed Solutions
  23. 23. 23Copyright © 2016 Accenture All rights reserved. WHICH FAST FASHION TENANTS ARE BRANDS REALIZING THROUGH COST MANAGEMENT? Being RIGHT Being FAST Being EFFICIENT Bringing on-trend products to target customers Delivering the product when it’s needed, faster than competitors Creating a lean, cost efficient, end-to- end operations
  24. 24. 24Copyright © 2016 Accenture All rights reserved. KEY TAKEAWAYS Being RIGHT Being FAST Being EFFICIENT Bringing on-trend products to target customers Delivering the product when it’s needed, faster than competitors Creating a lean, cost efficient, end-to- end operations What are competitors doing to win in a faster, digital, omnichannel, fashion marketplace? INCREASE REVENUE with trendy, customer- centric assortments and innovations DECREASE COSTS through smarter product component sourcing and reuse INCREASE SPEED to market through smarter planning and streamlined process IMPROVE LOYALTY of lifetime customers achieved by being right and being fast What are the benefits of these investments?
  25. 25. QUESTIONS? Contact one of our Fashion Industry Advisors in the “Meet the Team” section of our website

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