winning at the speed of fashion

Winning at the Speed of Fashion

2Copyright © 2016 Accenture All rights reserved.

KEY TENANTS. WINNING AT THE SPEED OF FASHIONTraditional 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


OVERVIEW. FAST FASHION VALUE STREAMUnderstanding which Fast Fashion tenant is most important to your brand informs where along the value stream you want to invest in first

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VALUE STREAM CASE STUDIESUnderstanding 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

Copyright © 2016 Accenture All rights reserved. 5

COMPANY OVERVIEWlululemon 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


LULULEMON LABIn 2009 lululemon launched their “lab” stores: a brick and mortar retail location where designers test and get guest feedback on new innovations


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


INNOVATION MANAGEMENTBrands have to change how they go to market to take advantage of the customer feedback they get from test stores, like lululemon’s lab


PRODUCT LIFECYCLE CONSIDERATIONS

CALENDAR MANAGEMENTCreate 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 INTEGRATIONRely on an integrated digital design and PLM platform to quickly turn innovations into technical blueprints that can be scaled for full commercialization

MATERIAL CAPACITY PLANNINGHave the ability to quickly scale material capacity plan, without losing your margin to the cost of doing business just in time


WHICH FAST FASHION TENANTS IS LULULEMON REALIZING THROUGH CONCEPT AND INNOVATION MANAGEMENT?

Being RIGHT Being FAST Being EFFICIENTBringing on-trend products to target

customersDelivering the product when it’s needed, faster than competitors

Creating a lean, cost efficient, end-to-end operations


COMPANY OVERVIEWInditex’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


OVERVIEW. CALENDAR MANAGEMENTHigh 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


Speed to Market



Speed to Market


BASIC ASSORTMENTS FASHION ASSORTMENTS FASHION ASSORTMENTS



INVESTING IN CALENDAR MANAGEMENTInditex 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%



WHICH FAST FASHION TENANTS IS ZARA REALIZING THROUGH CALENDAR MANAGEMENT?





COMPANY OVERVIEWTheory 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


INVESTING IN 3D DESIGNCEO 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



3D PRODUCT DESIGN BENEFITS3D product design facilitates the coherent communication of concepts across the entire Fast Fashion value stream

DESIGN CAPABILITIES

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BRAND COHERENCEVisualize what a line is going to actually look

like on the market

PHYSICAL SAMPLESHave accurate

renderings to support assortment adoption and

selling to Buyers

INNOVATIONDesign for what is possible

through advanced manufacturing, versus just

what you can sketch

DESIGN INTENTStart with accurate

Technical Packs and BOMs to communicate

intent to vendors

COLLABORATIONCapture design and

development edits both internally to the brand and externally with the vendors

SPEED TO MARKETUse rendering for marketing, packaging, and commerce

channels ahead of commercialization



WHICH FAST FASHION TENANTS IS THEORY REALIZING THROUGH 3D DESIGN?





COMPANY OVERVIEWLevi 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


INVESTING IN ADVANCED MATERIALSLaunching in Spring 2016 is Project Jacquard: Levi’s joint venture with Google to bring fashion and the world of innovation one in the same


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 GadgetIn fact, this should reduce the number of gadgets people have to carry to stay connected

Create Something People Want to WearEveryone has that one pair of jeans they love, this one just brings that pair into the digital world

Foundation of HeritageLevi’s has been an apparel market leader for a century, they know what people want to wear

Speed to MarketLevi’s can incorporate Jacquard into their existing materials manufacturing seamlessly

Source: Project Jacquard


MATERIAL TIERS AND INNOVATIONBrands are focusing innovation on advanced finished materials


FINISHED PRODUCTAssembled, final product ready for commercialization and consumer fulfillment

FINISHED MATERIALSTreated, 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 COMPONENTSPrepared inputs to support material production (e.g., thread, un-dyed fabrics) that can be sourced as a commodity

RAW MATERIALSCultivated inputs from a plant or animal

INNOVATION FOCUS


ADVANCED MATERIALS MANAGEMENTThe focus on complex materials has changed how brands source and commercialize products


PRODUCT LIFECYCLE CONSIDERATIONS

DEMAND TRANSPARENCYUse a product development platform like PLM to aggregate demand for an advanced material across categories, lines, color, and size mix

IP PROTECTIONImprove supplier management through incentives and premeditations to protect the intellectual property behind the innovation

ECONOMIES OF SCALEReduce costs by formalizing the process for negotiating and sourcing materials at an enterprise level, 3 years in advance


WHICH FAST FASHION TENANTS IS LEVI’S REALIZING THROUGH ADVANCED MATERIAL MANAGEMENT ?





PRODUCT COSTINGEstimating 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


WHICH FAST FASHION TENANTS ARE BRANDS REALIZING THROUGH COST MANAGEMENT?





KEY TAKEAWAYS




What are competitors doing to win in a faster, digital, omnichannel, fashion marketplace?

INCREASE REVENUEwith trendy, customer-centric assortments and innovations

DECREASE COSTSthrough smarter product component sourcing and reuse

INCREASE SPEEDto market through smarter planning and streamlined process

IMPROVE LOYALTYof lifetime customers achieved by being right and being fast

What are the benefits of these investments?

QUESTIONS? Contact one of our Fashion Industry Advisors in the “Meet the Team” section of our website

https://www.accenture.com/us-en/service-winning-speed-fast-fashion?c=prod_retailsldshr_10000002&n=smc_0516