Sourcing Journal Radio

Apparel demand has reached a new level of unpredictability. During the pandemic, the purchasing behavior pendulum has swung from weak sales amid early lockdowns to revenge spending in 2021. Historical data is therefore no longer a strong predictor of market performance. Retailers are also contending with supply chain disruptions, including expanded lead times and shipping schedules that threaten on-time arrivals of goods. The major risk has shifted from overstocks to understocks, and retailers have adjusted their buying strategies accordingly. In AlixPartners and Sourcing Journal’s recent “2021 Fashion in Focus” survey report, industry executives said they were planning for delays by buying earlier and ordering larger volumes of goods. But buying far out essentially means “buying blind,” explained Joe Schmitt, a managing director at AlixPartners. As the industry adapts and learns from pandemic pressures, there are still uncertainties in how to navigate planning. “I don't think anyone has a clear game plan moving forward around what exactly they need to do,” Schmitt told Sourcing Journal founder and president Edward Hertzman in a recent podcast conversation. “I think the theme is really, ‘How can we be as flexible as possible while still being differentiated in the market?’ And that balancing act is what everyone's trying to figure out right now.” Learn more about your ad choices. Visit megaphone.fm/adchoices

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. Learn more about your ad choices. Visit megaphone.fm/adchoices

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. Learn more about your ad choices. Visit megaphone.fm/adchoices

Robert McMillan of Dearborn Denim discusses the appeal of Made in America denim, and how it makes for a more sustainable product. Learn more about your ad choices. Visit megaphone.fm/adchoices

Blackhorse Lane Ateliers founder Han Ates discussed the ways in which his brand is practicing social sustainability and creating a London aesthetic. Learn more about your ad choices. Visit megaphone.fm/adchoices

Kings of Indigo’s Tony Tonnaer discusses how his sustainable foundation helped him navigate the pandemic, and what he has in store for 2021. Learn more about your ad choices. Visit megaphone.fm/adchoices

Jeanologia’s CEO Enrique Silla discusses the company’s contributions during Covid-19 and what it learned from the pandemic. Learn more about your ad choices. Visit megaphone.fm/adchoices

Rudolf Group’s Alberto de Conti discussed Hub 1922’s latest innovations launched during Covid-19 that will have a lasting impact on the denim industry. Learn more about your ad choices. Visit megaphone.fm/adchoices

Maurice Malone of Williamsburg Garment Company talks about the state of diversity in denim and the benefits of DTC beyond a pandemic. Learn more about your ad choices. Visit megaphone.fm/adchoices

The fashion supply chain is infamously opaque, but brands and retailers are increasingly heeding calls for greater transparency and traceability that gets to the heart of their social and environmental impact. The shift can’t come soon enough. According to a 2019 survey by Ipsos MORI, four in five Americans want fashion brands to provide more information about their environmental commitments and the measures they are taking to curtail pollution in their supply chains. Roughly three quarters believed that brands should be responsible for what happens in the manufacturing process, and that they need to take appropriate action to ensure clothes are produced in an environmentally friendly way. Similar studies show that consumers not only value information related to a company’s supply chain, but many are in fact prepared to pay a premium for greater transparency and visibility. In this episode of the Sustaining Voices podcast, Sourcing Journal sustainability reporter Jasmin Malik Chua speaks with Jamie Barsimantov of SupplyShift, an end-to-end supply chain data management, responsible sourcing and supplier engagement platform, and Tai Ford, chief marketing officer at Retraced, a transparency solution that enables fashion brands to visualize, verify and communicate their supply chains, about the importance of transparency and traceability, the reasons behind their growing prominence and the obstacles that stand in the way of ensuring a socially and environmentally just industry. Though traceability and transparency are sometimes interchangeably used, they’re not the same, and “we need to separate that,“ Barsimantov said, though he admits that because people have their own definitions, the confusion isn’t going to go away. With transparency, “we usually think of a brand lifting the veil off where their manufacturing sites are and information about their practices,“ he said. “When people say full traceability, they’re usually talking about where this bit of cotton came from versus that bit of cotton, which is extremely challenging, expensive and in some cases, doesn’t even provide the right information to provide that transparency to the consumer.“ Traceability and transparency don’t make a brand more sustainable, but they’re a “means to help you along that journey,“ Ford said. “Traceability doesn’t necessarily say that you have sustainable materials in your supply chain, but [it] at least gives you points of reference to then set to start action plans and to communicate those action plans... with people in your company, other certification agencies and other members of your supply chain.“ Listen more to the podcast to learn how much of the fashion supply chain we can confidently map, if some materials are easier than others to track, how much transparency and traceability efforts might cost and how calls from governments and human-rights groups to divest from the Xinjiang Uyghur Autonomous Region will impact the cotton supply chain. Learn more about your ad choices. Visit megaphone.fm/adchoices

Carbon neutral. Climate positive. Carbon negative. Net zero. Today, it's no longer enough for an environmentally conscious brand or retailer to simply be "sustainable." And no wonder: The fashion industry is responsible for anywhere between 4 percent to 10 percent of the world’s carbon emissions, depending on the source—too much, no matter how you look at it. But what do these terms mean, exactly? What is this "hierarchy of mitigation" companies like Gucci are talking about? And are businesses, by purchasing offsets to neutralize their emissions, simply "paying to pollute"? In this episode of the Sustaining Voices podcast, Sourcing Journal reporter Jasmin Malik Chua speaks with Pauline Op de Beek, who engages with the apparel sector for The Carbon Trust and Saskia van Gendt, head of sustainability at Rothy’s, about fashion's burgeoning impact and the role that carbon neutrality can play in promoting a planet-friendlier fashion. Indeed, carbon neutral declarations have ramped up over the past couple of years. H&M wants to become climate positive by 2040; the G7 Fashion Pact, a coalition of 150 brands, from Adidas to Prada, have pledged to collectively achieve net-zero emissions by 2050; and Allbirds slapped a carbon tax on itself to neutralize its own footprint. There’s a reason for this trend. “I think carbon neutral declarations are, in part a response to the urgency of climate change, but also the increased awareness around fashion’s footprint,” van Gendt explained. “And in the past, I think companies could be wasteful because there was no reason for them not to be—the awareness was low. But now both consumers and companies themselves are becoming much more aware of fashion’s footprint.” At the same time, brands and retailers should be careful of brandishing the term like a talisman that solves all of fashion's ills. “I think the main thing is that it is part of a wider strategy,” Op de Beek said. Carbon, she noted, is not the be-all and end-all of a sustainability strategy. “In and of itself, it is a continuously evolving process where companies move to reduce their emissions year on year,” she added. “[But it is also about] driving change throughout the supply chains and changing the way we interact with our apparel when it comes to the use and end of life. And that kind of business change is what we really need to focus on.” Learn more about your ad choices. Visit megaphone.fm/adchoices

The COVID-19 crisis has resulted in a period of unprecedented upheaval for the retail industry, which has fielded a battery of hits due to shuttered storefronts, retreated foot traffic, shrinking discretionary incomes and mounting economic uncertainty. Brands and retailers have to contend with collapsing revenues, rent payments and mountains of unsold merchandise. Does something need to change? In this episode of the Sustaining Voices podcast, Sourcing Journal reporter Jasmin Malik Chua speaks with Gregory Schlegel, founder of the Supply Chain Risk Management Consortium, and Nikki Baird vice president of retail innovation at Aptos, about how the retail supply chain can adapt to a post-pandemic landscape that will look markedly different from the one that came before. Inventory and pricy real estate have long been two of retail’s biggest albatrosses, but they haven’t changed because there’s been little motivation to change them. COVID-19, however, is presenting them through a fresh lens. “Those are the places where the pain is the greatest right now,” Baird said. “There’s a lot of, ‘Well, we’ve always done it that way’ in the apparel supply chain, but the pandemic has really exposed the weaknesses in the way we’ve always done it.” Brands and retailers, for one, can no longer muddle along with the limited visibility they’ve always had, Schlegel said. “The retail supply chain is in need of massive investments in people, flexibility, visibility and automation to survive, thrive and become more resilient,” he said. “As retail and apparel move through COVID-19, [they can’t bring] these historical supply-chain inefficiencies along with them.” Before the pandemic, fashion businesses were experimenting with inventory-less stores that trafficked in experiences and branding rather than saleable merchandise. The pandemic may accelerate such innovations, including those borne out of necessity, such as buy online, pick up in store and enhanced ecommerce platforms punched up by video-enhanced bells and whistles and personalized assistance. Many of these changes are likely to have staying power, and as the borders of online and offline begin to blur, consumers will increasingly look to stores—even physical ones, whenever they reopen—to be more than repositories of merchandise. “There’s no future for stores, whether they have inventory or not, without that aspect of entertainment or expertise or some kind of guidance or interaction,” Baird said. Learn more about your ad choices. Visit megaphone.fm/adchoices

Sustainable sourcing begins with raw materials. Experts agree that a “sustainable materials mix” should be a priority for the fashion industry because they can reduce its reliance on fossil fuels, pare back water and carbon footprints and pose less of a burden at the end of their lives. But what makes a material sustainable? And should we look to the past or the future for answers? In this episode, Sourcing Journal reporter Jasmin Malik Chua speaks with Rebecca Burgess, executive director, and Jason Kibbey, CEO of Higg Co., about how novel materials such as synthetic spider silk derived from yeast stack up against agricultural systems both conventional and “regenerative.” “I would say we’re at the very earliest phase of this and few of the new, interesting and exciting materials have come to scale,” Kibbey said. “But we also have to support innovation and try to find these new materials that do reduce impact, and do allow us to give optionality in a changing world.” Burgess cautions, however, that the current regulatory system is ill-suited to managing the growth of synthetic biology and its waste streams. “I think...we have is a history of launching things into our biosphere, without having measurement frameworks or scientific analysis about potential impacts to dynamic ecosystem function,” she said. “So I have concerns and I'm not the only one.” Regenerative agriculture, she explains, increases soil fertility and biodiversity, helps with sequestration of atmospheric carbon and helps the land “self-renew without synthetic inputs...just the magic of biology.” Kibbey agrees that a balance between old and new is necessary to clothe the people of the future. “It’s very important that we both have to support innovation and support new ways to look at clothing...but we also have to be very careful of the unintended consequences of those materials as we develop them...and carefully try to understand and reduce or ideally eliminate those unintended consequences.” Learn more about your ad choices. Visit megaphone.fm/adchoices

G-Star RAW's denim and sustainability expert, Adriana Galijasevic, has a wealth of knowledge she wants to share with the industry. Learn more about your ad choices. Visit megaphone.fm/adchoices

While the ultimate impact of COVID-19 won’t be known for years, apparel has already begun to assess the damage, as businesses across the value chain chart a course through the pandemic. From a rocky start filled with cancelled orders and fractured relationships, the industry is now looking ahead to the initiatives, technologies and culture shifts that could finally transform it. In this episode of Sourcing Journal Radio, Steve Hoffman, partner at McKinsey, discusses the results of an industry-wide survey the consulting firm conducted in collaboration with Sourcing Journal. The findings, which were published in the company’s report “Time for Change: How to use the crisis to make fashion sourcing more agile and sustainable,” details the damage that’s already been done to liquidity and partnerships as well as how fashion firms plan to battle back—and the likelihood that they’ll successfully achieve their goals. While the survey found that the pandemic may be the catalyst for the industry to finally put initiatives like speed and flexibility in place, Hoffman says, the landscape is likely to be bifurcated, with those he dubbed “immediate and bold” as the winners. “The new normal is really what's going be a key factor here, because if in the new normal certain things play out such as a reduced assortment… that will help accelerate speed and flexibility because the complexity of doing that will be a lot easier," he said. "There's a couple of factors that we would wait to see if they could be enablers, but by and large, you're going to see the retailers or apparel wholesalers who are currently more advantaged, probably more advantaged coming into the crisis, that will be able to sort of double or triple down on those speed and flexibility aspirations. And I would say the vast majority the industry will sort of be left a little bit behind, and maybe doing a handful or a more limited kind of speed and flexibility push, but I think will be far outpaced by the folks that are more advantaged.” For the time being though, Hoffman said the winners will be those that quickly pull back and focus on managing cash in the short term before aggressively jumping on new opportunities once the dust settles. Listen to the episode to learn more about how retailers can overcome the “distracting” financial concerns that might make them hesitate rather than move forward, the root causes holding much-needed initiatives like on-demand manufacturing back and why funding sustainability will continue to be a challenge. Learn more about your ad choices. Visit megaphone.fm/adchoices

Are biosynthetic materials made from engineered yeast or pineapple skins hype or hope for the fashion industry?

Kontoor Brands senior director of global sustainable business Roian Atwood is somewhat of a wonk for denim sustainability. Learn more about your ad choices. Visit megaphone.fm/adchoices

Warp + Weft founder Sarah Ahmed talks inclusivity and building a direct-to-consumer. Learn more about your ad choices. Visit megaphone.fm/adchoices

Outland Denim founder James Bartle dishes about his decision to dabble in crowdfunding. Learn more about your ad choices. Visit megaphone.fm/adchoices

Jason Denham, founder of Denham, talks quality, premium jeans and preparing for pandemics. Learn more about your ad choices. Visit megaphone.fm/adchoices