Get radical, focus on data and AI and recognize that sustainability is now a must for consumers, not an option.
Those were among the key themes that emerged on the second day of the WWD Virtual Apparel and Retail CEO Summit on Thursday.
Anne Pitcher, managing director of Selfridges Group, believes retail should be “radical,” and take the lead with regard to issues as diverse as culture, the environment, the consumer, and the shop-floor experience. Pitcher said instead of relying on past experience, retailers need to “focus on what will work in the future,” and “do the right thing for people and the planet now, instead of waiting for legislation to force us into it.”
She added that retailers need to be hypersensitive to big cultural shifts, too, and not treat them like “student politics that the younger generation ‘will quickly grow out of.’”
Pitcher made some radical claims herself, arguing that stores should adopt “a way of thinking that puts creativity and innovation back at the heart of retail. I’ve been a shopgirl since I’ve been 16 years old. Retail has been my life’s work, and recently I have come to feel that the left side of the brain lives in the shadow of the right in our industry. We have become too finance-led. There is far too much head, and far too little heart. COVID-19 is offering us an opportunity to rebuild ourselves in radical new ways.” Pitcher argued that creativity needs to be “part of the essence of what we do — not just the gloss on top.”
Federico Marchetti, chairman and chief executive officer of Yoox Net-a-porter Group, made a case for data, saying it could empower sustainability efforts by reducing waste; improve day-to-day business by fine-tuning customers’ profiles and preferences, and help determine pricing strategy. He also said data helps creatives to develop an understanding of who they are designing for, and what those customers need.
Marchetti talked about data-based projects at YNAP, including an AI-powered virtual mirror app that allows customers to dress digital avatars of themselves. He said YNAP is also working on a digital ID system for merchandise that will launch in the near future. Items will come with a QR code that customers can scan with a mobile phone to reveal details such as materials used, the story of the artisan and how to care for, and repair, the item.
Patrice Louvet, president and ceo of Ralph Lauren Corp., said: “We’ve seen years of digital adoption in a matter of months and the pace will only accelerate. In fact, we’ve just started.”
It’s a journey that will have fashion figuring out new ways to engage consumers, building on what Louvet described as the “emotional connection between what you’re wearing and the brand.”
While the industry has been adept at making those connections in real life, the trick now is how to do it virtually. “How can you make people at a moment of isolation to connect with your brand?” Louvet said. “The challenge, the opportunity is to now be able to answer [that question] digitally.”
In the “How AI Improves COVID-Era Forecasting and Merchandising Planning” session, Katie Darling, Puma’s vice president of merchandising, and PVH Corp.’s Kate Nadolny, senior vice president of business strategy and innovation, joined Impact Analytics’ Prashant Agrawal for a conversation about how the pandemic accelerated the need for artificial intelligence.
For Nadolny, the health crisis put what had been an interest into sharper focus as an essential.
“We started out our journey with AI about two years ago. We identified the clear need and opportunity for us to be smarter about how we’re making our forecasting and prediction decisions,” Nadolny said. “But we weren’t really sure about what the tools and capabilities were that we needed.”
Initially the company looked for partners that could help think through the ways AI could be used. Plenty of attention was put on things like assortment and allocation, but the priorities shifted as the pandemic took hold. Swift decisions and responsiveness became critical — with stores opening, closing and sometimes reopening, while consumers’ shopping behaviors changed. Suddenly, the emphasis was on knowing where and how to shift inventories or change pricing in real time.
Puma’s Darling added that planning at the store level for multiple doors is impossible without artificial intelligence. The tech also offers a key benefit: “It can find patterns you’re not looking for,” she said, especially when compared to the way people dig through spreadsheets.
Nadolny acknowledged that it can feel like a loss of control, but “the machine can really learn more quickly and adapt to what’s happening in the space — more so than we can in our Excel-based toolset that we have today.”
David Sykes, head of Klarna U.S., also talked about technology as well as sustainability, saying the pandemic is reshaping the way people shop.
“We’re definitely seeing shoppers getting smarter,” said Sykes. “What they’re buying, but also who they’re shopping from.”
The companies and brands that will have the most success in the future, Sykes said, are those that prioritize social issues and sustainability. (In a Klarna survey, 79 percent of shoppers said it’s important to shop sustainably); sell categories that focus on health, such as activewear, beauty and wellness, and those that embrace technology as the path forward. (The same Klarna survey found that 47 percent of shoppers feel more comfortable when more one than one payment option, such as buy online, pick up in store, is available.)
“The brands that do well, it wasn’t overnight,” Sykes said. “For a long time, they have been positioning their businesses to be more digitally oriented, to embrace new technologies — whether it’s through mobile payments or mobile apps — they had been thinking about technology for a while. When COVID-19 struck, they were in a position to move quickly and adapt faster than others.”
Rising designers Kevin Germanier, Reese Cooper and Susan Fang chatted with WWD style director Alex Badia about incorporating sustainability into their brand DNA, how flexibility — and family — have been keys to business success during COVID-19, and how they want to see the fashion industry change.
“Sustainability is not a trend, people need to stop thinking of it as a trend…we need more action. If we can do it, why not the bigger brands?” said Paris-based Germanier who proves that upcycled and responsibly sourced materials can result in sexy, glamorous clothes. During the pandemic, the designer leaned into family (12 family members work on his brand), created an Essentials collection for his e-commerce launch and has been seeing success selling artful hand-painted, foil-appliquéd upcycled T-shirts and jeans.
“Sustainability is so built into the brand DNA of younger people coming up…it’s going to be just a few years until brands that aren’t done that way are going to be outdated and corny,” added L.A.-based sportswear designer Cooper, whose mother, Leah, is his company president. “Flexibility is key and being able to pivot is the only way I got through this year,” said the designer, who came up with the idea in April to shoot a video on how to sew a chore jacket and sold 1,500 kits with all the supplies.
Fang also focuses on waste reduction. “Our textiles are very innovative where we create this air weave that can be one-size-fits-all, two-dimensional and three-dimensional, and we create bubble accessories made with recycled crystal glass,” said the mathematically minded designer on-screen from Shanghai.
“Because we are a handmade studio that involves my mom, childhood friends, uncles and aunties, we could still hand make at home when quarantine was serious,” she said. “We tried to be flexible to what the market was wanting…the European buyers were asking if we had a pre-collection, so we made one in one month.…Then we created a main collection in October. The result was a really healthy growth.”
In the end, the second day of the summit showed that, despite all the troubles of today, there is also the sense of an industry on the move.
“These next several months and years ahead provide significant opportunities for all retailers,” said Michelle Gass, ceo of Kohl’s Corp.
The retailer is seeking to grab those opportunities by putting the consumer at the center of its decisions, doubling down on active and casual and going big in beauty with its new Sephora partnership.
“By 2023, we will have Sephora at Kohl’s shops at 850 stores,” said Gass, adding that the partnership “will instantly transform Kohl’s into a formidable player in the beauty industry.”