Survival Of The Fittest Means Faster Innovation For Retail
Photo taken in Chiang Mai, Thailand
Charles Darwin once famously wrote, “It is not the strongest of the species that survive, not the most intelligent, but the one most responsive to change.” When I read this, I immediately related it to the environment we all face as an industry right now.
The traditional retail industry was, in my opinion, slowly and begrudgingly innovating pre-Coronavirus. This was largely in response to consumer appetite for fast fashion and rising competition from direct-to-consumer brands. Still, nothing cemented the need for change like COVID-19 as it magnified the manual, time-consuming practices that hamstrung so many retailers and crippled their ability to move in unison with consumers — from product design to line reviews and beyond. Recent social injustices also amplified how retailers are out of touch with consumer expectations and preferences.
We as an industry have reached an “evolve-or-die” moment. Countless retailers continue to file for bankruptcy and shutter stores. Yet even when faced with imminent peril based on huge gaps in consumer understanding and inefficient processes, very few retailers or brands have taken up the mantle to truly innovate. Right now, my guess is that about 10-20 percent of retailers are doing something to innovate and prepare for the next phase in retail.
What retailers must realize, and fast, is that what the Coronavirus has given us is an opportunity, a much-needed moment in time to start fresh. Even as more stores reopen, it will likely be months or longer before consumer demand returns to prior levels, and that demand is likely to be very different from before.. It is time to revisit everything we thought we knew about customers and the market, and evolve by embracing technology solutions that have been ready and waiting for years.
Here are three things that retailers and brands should be innovating right now to leapfrog competition and align with the new retail world. The key will be implementing customer analytics, strong data-driven product strategies, and strategic digital solutions.
3D Design: Even as the economy begins to open, there will likely be much less travel and fewer in-person meetings. This is an opportunity for retailers and brands to innovate by embracing virtual technology solutions that can accomplish and expedite the same outcomes. According to a recent story in Vogue Business, 3D digital design is emerging as a crucial lever for the industry. “It allows brands to design items quickly and remotely; once created, 3D assets — which are three-dimensional, photorealistic digital models of products — can be used in myriad situations, from creating marketing materials and virtual showrooms to customer-facing e-commerce pages and augmented reality experiences.” The piece also noted that 3D digital design can decrease waste while increasing production speed. 3D fashion design software solutions like Browzwear, Optitex, and CLO are leading the 3D digital revolution to help innovate the fashion industry across the supply chain, design, development and merchandising functions to increase speed to market. Brands like DVF and conglomerates like Kering are investing in digital design to increase efficiency and decrease waste, especially while working remotely.
Voice of Consumer Analytics: While consumer preferences and behavior may have changed, one thing has not: they are still in the driver’s seat. This means it is more important than ever that retailers and brands get to know them, and fast. Voice of the Customer (VoC) tools are able to quickly gather data and feedback directly or indirectly from customers which can help retailers make more informed decisions. Capabilities could range from a simple survey on a product and its features to transforming data into future insights with predictive analytics. As we move forward into the new retail world, consumer disconnects will prove fatal and fast as consumers settle into their new selves and a new price-value equation begins to take shape.
Digital Line Reviews: Retailers and brands traditionally have performed line reviews by first conceptualizing a product, creating a sketch or CAD, producing a sample and having it sent to the office where it is reviewed by merchants and shot on a form or model, and then testing in-store before they decide whether to proceed with a full-scale purchase. COVID-19 has moved product line reviews – like most everything – to Zoom, Skype or MS Teams. However, according rue21’s chief analytics officer, Dr. Mark Chrystal, this shift has left merchants struggling. Instead the company has moved to digital line reviews, which lean heavily on VoC analytics. They have streamlined the process by having the vendor utilize 3D or 2D CADs or shoot the image on the form or model, upload it to the VoC platform and have it tested. The platform applies analytics and synthesizes the data into an easy-to-read dashboard. rue21 then decides how to place their buys for an optimized assortment. According to Dr. Chrystal, “It’s a lot more efficient. We’re forced to rethink how we operate and digitize the process… [COVID-19] was the catalyst to push it to the next level.”
It does feel like a dog-eat-dog world right now. But to mix metaphors for just a second, retailers and brands that are able to innovate through digital technologies will not only survive, but thrive. Even as the Coronavirus subsides in the coming months and years, the improved technology toolkits and streamlined processes that will have been put in place will remain a strong part of the backbone of the new retail world. And much like Darwin stated in his theory of evolution, this variance may dictate a retailer’s ability to compete and survive – and sooner than we may think.