26 May Where is the Apparel Industry Headed?
How apparel is defined and where it fits within the retail ecosystem will be an ongoing development in 2015 and for years to come. There really is no fixed pattern that suppliers and purchasers can take for granted. Changes in apparel take place every day, and apparel brands are always looking to stay one step ahead. Here are some of the market happenings we are already seeing.
What the Apparel Market Looks Like Today
The American Apparel and Footwear Association (AAFA) and Euromonitor International released their latest market statistics and findings related to the U.S apparel industry. Here are some of the noteworthy developments:
- The retail market is returning to health. On average, every American spent $907 on clothing in 2013, and furthermore, 2014 saw additional growth in spending. The market is at a much better place than it was nearly seven years ago, when the entire country was mired in a financial crisis.
- More U.S. creation of goods. Although overseas imports remain the norm, U.S. created apparel has seen a steady uptick over recent years. China is its largest apparel supplier, and at this rate, remains the biggest competition to the U.S. for global positioning in the apparel and footwear market.
Lead Time Reduction Continues to be a Top Priority for Apparel Companies
The challenge of reducing the lead time for goods manufactured overseas, while trying to reduce cost to import the product, is being weighed against the cost of manufacturing domestically in the US. These issues are driving the need for advanced software that will be flexible enough to shift based on the ever changing requirements in the apparel industry.
Collaboration Is An Essential Driver for Retail Going Forward
In a report PwC recently released entitled, Retailing 2015: New Frontiers, targeted collaboration was spotlighted as an important trend that will be pervasive across industry lines. Specifically, PwC explained that retailers and suppliers are working closer together to become trading partners and are exchanging details and processes.
What were some of the other crucial trends PwC sees taking shape in 2015?
Today’s consumer will continue to be a moving target for retailers to identify, as their buying habits and preferences change as quickly as their wardrobe. Consumers are not just wowed by the product itself – they are looking for personalization, and they want to take control of their purchasing decisions.
Interconnectivity, through Omni-channel or otherwise, will play a major role in how transactions start,stop, move, and ultimately land with the consumer – wherever they go, using the devices they prefer to start their buying destination. Social and mobile platforms in particular will play a more definitive role within the supply chain.
Try Information Technology On For Size
Whether it comes to clothes or shoes, technology is at the heart of the changes taking place in retail and apparel today. Technology is not only a critical cog to enhance customer experience; technology is also enabling retailers, manufacturers, and suppliers to stay on top of their operational efficiency with data as the principal agent of change.
According to PwC: “There is, and will be, an overwhelming need to effectively manage the business through business intelligence. Demand-based management can succeed only with real-time data information delivered through increasingly newer forms of technology delivery systems.”
ERP Systems Play a Vital Role in Information Flow
Manufacturers in particular are challenged to bring their applications and data together to get accurate inventory forecasts, determine if capacity is over or underutilized, and detect cost overruns. ERP systems help to close the gaps by consolidating the control and management of often-dispersed data so organizations can extract true value from their widespread information sources.
With deeper visibility into all of organizational activities and statuses from a single, unified platform, the Aberdeen Group found that ERPs deliver:
- 22% reduction in operating costs
- 20% reduction in administrative costs
- 17% inventory reductions (for manufacturing and distributing)
In our eBook, 5 Technology Shifts Sending Aftershocks to the Apparel Industry, we discuss five critical technology developments within the apparel industry that are compelling manufacturers, wholesalers and decorators to rethink their traditional processes and embrace new-age approaches.
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