Fashion Frontline "Why the Supply Chain is Broken" Part Two
In Fashion Production, It Is Not Business as Usual Anymore
Part two of our great interview with Unmade sales director Bruno Mattia continues this week with a more detailed look at why fashion production is evolving and the role technology can play in addressing what needs to change.
Q. One of Unmade’s core tenets is reimaging the fashion supply chain. What’s broken about the current system? Why does it need to change?
“The fashion supply chain of today has been built by successive layers of changes started 50 years ago. It was driven by a need for bigger volumes and cost reductions, and a seasonal approach (sometimes two collections a year, sometimes four) and long development cycles. The wholesale business method applied - produce in advance and sell in advance.
“Sustainability was not even on the agenda. No one cared.
“But this started to change over ten years ago.
“Seasonality began to change towards permanent changes in the collection, capsule, limited edition and unique items - customisation.
“Mass production is now a blocker to this approach. Now, brands want to order just 100 of a particular item but if manufacturers are still using the old system and old processes of mass production, they can’t do the short run at the same cost that the brands want. Changing the process is very difficult.
“What is new however is the digital revolution.
“Digital is changing the landscape and what we can do within it. Clearly, the balance is changing between wholesale and direct to consumers - in fact some brands are doing only direct-to-consumer now. The risk has shifted from the retailer to the brands. The brands are now the decision makers. Before they were selling in advance, now demand is unpredictable.
“The vast majority of industry still wants to plan in advance but this is totally incompatible with consumer demand now.
“The supply chain was broken a long time ago. Building an on-demand supply is the answer.”
Q. McKinsey’s latest ‘State of Fashion’ report for 2019 predicts change will continue to accelerate across the year and that only companies with the foresight to ‘self-disrupt’ will stay ahead. Do you agree with this view?
“Yes, totally. We’ve said that before McKinsey.
“By changing nothing, nothing changes. It is not business as usual anymore and it is a matter of re-imagining ourselves.
“This is a new paradigm that can only become real if we think differently, which requires the courage to embrace disruption.”
Q. Embracing technology such as Unmade’s is one part of the response to change, but culture and vision must play a role too. Do you think that companies are waking up to the cultural changes required of them to stay relevant and competitive?
“This is changing very quickly. More and more companies are creating new digital and innovation functions that didn’t exist two years ago. Now they are looking at acquiring startups, disruptive innovation, sponsoring events - and this is accelerating. Change is accelerating.
“For Unmade, it’s a good fit for our customer partnerships when we share this vision.
“Some companies better at adapting to change and some are not changing at all.
“Globally, I see differences. Truly, the US is more willing to take more risks to test innovation and disruption. Europe is a little more conservative.
“Attitudes can be quite entrenched in the fashion industry, which is slowing down change.”
Q. Customisation is increasingly in demand by discerning fashion consumers. Are brands responding to this demand?
“Customisation is the ideal starting point within this new paradigm. If you want to offer customisable items, you must do on-demand manufacturing. Customisation is the perfect test case to start.
“Some brands are doing it but in a very limited way. In most cases it’s more embellishment on a finished garment than a true customisation.
“What is key is to be able to do that at scale in a profitable way in a way that creates engagement.
“But today, we are seeing some industry players and brands that are struggling to do that.”
Q. Engaging the connected customer is becoming more challenging but more urgent. What do you think are the key ways that brands should be investing in their customer experience?
“At Unmade we believe customisation is the best way forward. It fosters customer engagement in a unique way.
“There are many ways to create engagement, in-store experiential initiatives, for example but these are very expensive and ultimately disconnected from what the customer gets at the end.
“The desire to share an experience with the brand is very powerful. Making a customer a co-designer with digital tools offers a great experience.
“More and more brands are launching customisation initiatives.
“I really think the future of the fashion business is to move to on-demand to gain adaptability, speed and efficiency, to unlock low volumes, restock and customisation.”
Q. What do you view as the future of fashion manufacturing?
“Agility is key. We need to be able to think quickly in an unpredictable environment.
“Today the supply chain is rigid, answering to circumstances of 10 to 20 years ago. Now it needs to be flexible to answer today’s and future challenges.
“The good news is that if other industries are able to respond to the challenges of digital disruption, then fashion can too.
“In fashion, it's hard to predict what the next move will be but embracing a disruptive mindset and investing in the customer experience in the long run is really the only way to stay competitive.”