Apparel & Retail 2011 Market Outlook – and how PLM can help

We recently spent a few days in New York City at the National Retail Federation (NRF) show.  Our partner TCS was there showing our product Teamcenter for Softlines, Hardlines, & Footwear, and we worked with the Siemens Brazil team to sponsor a roundtable discussion on the future of technology in retail.  We presented, along with SAP, IBM, and Microsoft, our solution and vision for the market to approximately 100 Brazilian retail executives.

Through the course of this discussion, and the NRF show in general, a common theme was, how do you effectively integrate enterprise technologies so they talk to each other and retailers can adopt new technologies seamlessly?  And not only from a technology standpoint, but also a business process, and people standpoint; this is why we focused so much time making our solution very usable, and easy to learn (i.e. simple UI, and Microsoft office look and feel), and on ensuring Teamcenter was built in a service oriented architecture with a unified data model (i.e. rapid, secure, global information access across the value chain).

Other key needs I heard throughout the show, many of which were echoes from NRF 2010:

• Decision Support: Having visibility into the performance of people and processes, both inside and outside the company, to improve new product development and launch time to market and time to value. 

 

• Value Chain Collaboration: Enablement of better communication and product development efficiency with all members of the team – co-workers, outsourced designers, and suppliers/vendors.

 

• Cost management: Leveraging resources at the right time, sourcing the right amount of material, and creating the ideal assortment of styles for a season that meets customer needs while keeping costs low and margins high, are paramount, especially during a bad economy.

 

• Green design: Retailers are focused on designing stores now in a sustainable way, which over the long run are more sustainable (less energy used, fewer CO² emissions, less water used); Makes sense since buildings, much more so than cars, are the biggest offender of CO² emissions.  The next step for branded and private label manufacturers and retailers is green product design: I think once we come out of the recession, both consumers and retailers will increase their appetite for sustainably made, “green” products. 

 

• Customer Needs Management: Understanding the voice of the customer, and making smart decisions at each point in the product lifecycle will never go out of style with the rapid change in seasons and trends that occurs in “fast fashion”.

 

• Analytics and business intelligence: This topic continues to be a hot topic, as it was last year.  Apparel, Footwear, and private label manufacturers and retailers need to understand the performance of their development process, their suppliers, their product, and of course their sales.  I did not hear a lot about how to leverage this knowledge at the front end of innovation – so new designs can get to market quickly while a trend is hot, and so line plans can be tweaked, not just for future seasons, but current seasons as well. If your product isn’t driving sales, or customers are reporting quality issues, or requesting a particular design, you want to know about that ASAP so your assortment can be adjusted.

 

• Social Networking: The advent of social networking has enabled retailers to more quickly and clearly understand what consumers think of their brand – the good, bad, and ugly.  It’s a phenomenon that’s not going away, rather, branded and private label retailers are using it to better understand and nurture the customer. Question is how to leverage this knowledge for new designs/styles, and to improve existing line plans and product assortments.  The way this is managed now is there is a person, or persons, in charge of trolling Facebook, Twitter, etc. for conversation on their brand, and managing a Facebook or Linked in page – but rarely is the tie made back to the product innovation process.  I’m attending the AAFA Executive Summit currently in D.C., and this is the topic they kicked off the event with – great best practice exemplified by retailer The Wet Seal, which I’ll post more about.

 

All of these areas present a lot of opportunity for PLM providers.  If not to directly provide functionality to support, these systems need to be able to easily integrate with multiple, global stores of data whether customer data from CRM, environmental impact information from an LCA system, or planning information from a supply chain solution. Fundamental to keep in mind is that PLM is not simply just a data management tool; it is a business, product, and supply chain planning platform on which to improve current and future new product development and launch.