The Third Eyesight Knowledge Series© comprises of workshops designed and developed to help functional heads, line managers and executives refresh and upgrade functional and product expertise.  

Third Eyesight’s next workshop in this series is focussed on Creating & Managing Lifestyle and Fashion Brands.

IS THIS FOR YOU?

This workshop will be useful to you, if you are 

• a brand owner wanting to look at growing your scale
• a manufacturer wanting to add value to your products and to gain additional margins
• a retailer wanting to invest in your own brands / private label
• a brand manager looking to expand the footprint of your brand over more products
• an entrepreneur wanting to launch a new brand
• an investor who wants to understand how brands create value 
• an exporter or buying office professional wanting to understand your customers and markets better
• a brand owner and believe that your business is undervalued
• a designer wanting to scale the business beyond yourself
• a marketing or sales professional looking to add value to your skill-base
• a service provider working with the lifestyle and fashion sector
• a teacher or researcher looking at understanding the process of brand development

THE WORKSHOP CONTENT

This workshop will help participants in understanding:

• the basics of lifestyle brands and their positioning in the lifestyle consumer goods industry
• the development of the brand ethos
• how to translate the brand intangibles into reality,
• how to attract and retain new customers in the competitive environment, and
• how to sustain and nurture the brand value over a period of time

REGISTRATIONS

Click Here or Call +91 (124) 4293478 or 4030162

The Third Eyesight Knowledge Series© comprises of workshops designed and developed to help functional heads, line managers and executives refresh and upgrade functional and product expertise.  

The Soft Goods Series is specially focused at the Clothing, Textile and the Fashion Industry. Within this, the Textile Facts & Fabric Sourcing module is aimed at developing a working knowledge of fabrics commonly used by the apparel industry; identifying the domestic and international source markets for these textiles; understanding the costing of textiles based on the value add and finishing processes;  and familiarizing participants with the common and varied end uses of these fabrics.

                 Dates:                4^th & 5^th July 2008

                 Duration:           10 a.m. to 5 p.m.

                 Venue:               PHD Chamber of Commerce
                                           August Kranti Marg, New Delhi.

                 Workshop Fee:   Rs. 5,500 per participant (plus service tax)

Other modules in the Series cover topics related to Product Development, Supply Chain Management, Merchandise Buying and Planning, Business Communication and Fashion Brand Management.  The workshops have been designed as an integrated series. However, each module is complete and self contained and participants have the flexibility to select independent modules based on their training requirement.

Participant profile: Production Managers and Coordinators, Merchandisers, Retail buyers and Product Developers, Buying House Merchandisers.

For further information please contact us at +91 (124) 4293478, 4030162. 

India has a rich tradition of textiles which dates back many centuries. The history of the Indian readymade garment industry, however, is very recent and can be traced back to the Second World War.

During the Second World War, as a contribution to the wartime needs of British rulers, clothing units for mass production were set up to manufacture military uniforms. With India’s independence in 1947, the industry stagnated as the policies of the Government were now diverted towards building a new nation. However, the industry began to expand after 1959 with the revision of the textile policy to allow the import of machinery for manufacturing.

The 1960s witnessed social shifts as a whole generation of young people questioned the very basis of their existence, and the hippie movement was born. Tired of their materialistic ‘man-made’ lifestyle, these young people began to seek answers in communing with all things natural, love and peace being the anthem. They began traveling, to explore, to seek the ancient philosophies of the East.

This voyage of discovery not only led to a change of lifestyle, but also the way they dressed. Natural fibres were rediscovered, and principally amongst them “Cotton”. India, with its natural abundance of this fibre, was an automatic choice of a supply source. Simultaneously, the growing settlement of Indian abroad led to a ready outlet for a variety of India merchandise and clothing textiles as an article of trade because of its growing demand.

This sudden demand for cotton garments resulted in the Indian industry growing by leaps and bounds in a very short period. Export of “High Fashion” garments from India started off with the cheap cotton kurtas and hand-block vegetable dye printed wrap-around skirts in cotton sheeting to meet the demands of the western youth.

Cashing in on the boom any and everybody got into the manufacture of clothing. The Government, realizing the potential of earning foreign exchange for the country, announced incentives and tax exemption for exporters. The fallout was an industry that grew in an unorganized manner and developed a reputation for producing low cost, low quality, volume merchandise.

The 1980s established that the industry was here to stay but, in terms of product profile, India still had not been able to move out of the lower end of the world market and continued to have an average unit value of under US$ 5.

The 1990s saw the industry make a conscious effort to shake off the image of being producers of cheap, low-quality merchandise with unreliable delivery schedules. The second generation had begun coming into the business, and contributed to reorganizing their firms for clearer structure and professionalism. Funds were ploughed back into the business with the emergence of large and modern production facilities. Even though most of the export houses were family-owned, trained professionals were inducted into the business for clear-cut departments and areas of functions. Consolidation and retention of business was the focus of the late nineties as the abolition of quotas planned for the new millennium became a reality.

The industry was euphoric but at the same time apprehensive of what the post quota era would bring. Many of the producers looking for a synergy in the business and also to sustain the large production facilities began tentative forays into domestic retail. The face of the Indian consumer was changing. Exposure to the western society via the electronic media helped in creating a ‘borderless’ world for lifestyle products, and contemporary fashion merchandise found a ready market in domestic retail.

The new global consumer over the years has evolved as a demanding and yet discerning individual. The novelty factor along with price and quality has become the watchword of the new millennium consumer. As consumers around the world change, so does the product strategy to keep consumer interests alive and ensure loyalty.

The new millennium has seen the emergence of the ‘Quick Response’ or ‘Real Time’ merchandising in fashion as a strategic solution to nurture, retain and grow the business. ‘Fast Fashion’ was born. Retailers could no longer work on the concept of two major retailing seasons with a couple of promotions thrown in. Product planning and the merchandise on the racks had to be constantly current and trendy.

Fast Fashion is not simply a solution to increase consumption by introducing greater product variety but a strategy to retain, consolidate and sustain the market through proactive product development and efficient product delivery to consumers, and thereby grow the market by increasing market share or developing new markets.

However, fast fashion has been tried and tested in different avatars through the years. In the 1960s and 1970s it was present in the quick reaction time of the unorganized sector to service the demand for block-printed ethnic clothing merchandise. In the 1980s and 1990s it was represented in the proactively researched product development at the source market level by wholesale importer/designer buyers (like Rene Dehry, Giorgio Kauten, Diff and Steilmann). Today it is technology-aided product research and development techniques (practiced by Anthropologie, Rampage, Zara and H&M), coupled with responsive buying processes.

In product design terms, India has moved on from producing and selling ‘fashion basics’ to ‘basic’ merchandise, and now back to ‘fashion basics’ once again. History says that this is where India’s inherent talents and strengths as a source market lie. Rather than reinventing the wheel or try to catch up with other competitors strengths, India should cash in on its strengths to practice and master fast fashion.

I had the privilege of bringing the Prime Source Forum in Hong Kong (April 1-2, 2008) to a close.  As in the previous year, the Forum had senior executives from companies based in the Americas, Europe, and Asia, as well as government officials and highly respected academics. The discussions covered wide-ranging topics, and with the variety of people on the panels, there was also some amount of difference in opinion.

8 issues came to my mind as key themes for the global industry, as I was preparing my closing speech, and I thought that those who were not present at the event may also be interested in these. Some of these are views expressed in the panel discussions, others are just my musings. Hopefully thinking through these 8 things can improve the fortunes of the industry around the world (8 being a lucky number in China). 

1. Costs vs Prices – Rising costs were a big theme, running through the various panels.  Chinese labour costs, power costs, the increasing costs of fuel, new costs of doing business (compliance) – more cost heads were discussed than I can possibly remember.

Once upon a time prices used to go up when costs went up. But that has not been the case for at least the last couple of decades. Even as costs have climbed, retail prices and FOBs have remained steady or even declined. Clearly, the question is whether this is a sustainable situation – though consumers and retailers have been winners so far, how long can factories and labour be squeezed without impacting the very survival of the business?

The interesting contrast is luxury goods, where production costs have come down due to outsourcing and manufacturing in low labour cost countries. (So even in that area, prices and costs don’t show a correlation!)

2. Where next? – Dr. William Fung (Li & Fung) clearly struck a note with most of the audience in his opening keynote address, as he tackled the BIG question: with costs significantly rising in China, and the risks of a concentrated sourcing basket, which other countries could companies look to. According to him, “within the next 3 years, the follow-up country to China is…China”.

After all, which other country’s industry has poured billions of dollars in up-to-date manufacturing capacity and supply chain infrastructure? So even while the Chinese government’s move to push factories to the north and west of China may be producing results as quickly as they may have hoped, buyers clearly have limited options on the table.

Certainly, other countries such as India and its neighbours, as well as Indonesia, Vietnam etc. are an option, but a lot more needs to be pushed through.  According to Dr. Fung, India shows higher product differentiation and development skills that make it a logical place for buyers to invest time and energy.

I believe that what buyers did in China 15-20 years ago, is probably what is needed in South Asia and other supply bases now.  At that time, China had neither the production capacity nor the supply chain and other infrastructure that it has now. But intrepid buyers opened the Chinese frontier and created the demand pipeline which pulled the supply base up. Would retailers have a similar focus on the other supply bases today, to balance their exposure in China? This is not a new question – in fact, in the last few years it has come up several times when there has been a hurdle or barrier to cross with China (quotas, SARS etc.).  But now, with the Chinese government also wanting to turn the industry’s focus away from low-value products such as clothing and textiles, could this be the opportunity for buyers to push their initiatives in other countries ahead?

3. Fashion is about change…but are we prepared for change? – Speed to market is not just about producing quickly and shipping fast, it is about responding to change in the market. The very nature of the fashion business is “change”.

Though benchmarks of 2-week turnaround and even 2-day turnaround exist, by and large the industry works over a lead time of months rather than weeks. We know that it is humanly impossible for even the best buyer to predict with 100% accuracy as to what will sell 6-12 months in the future.

So the answer, especially in these uncertain market conditions, is to take product decisions closer to the sell-date, rather than try and forecast accurately. The only way to reduce the risk is to respond to market needs, rather than to try and predict what the market will need in the future.

4. Neither free nor fair! – There was enormous debate (although mostly in polite terms), about whether free trade and fair trade meant anything.  

What is very clear is that trade barriers continue to exist. Even as import tariffs fall, non-tariff barriers remain in place. While thousands and tens of thousands of people around the world are actively working to bring trade barriers down in all countries, within their own markets there are others who are actively lobbying to keep trade barriers up, or to erect new ones.  A very interesting perspective shared by one of the panelists was that to a protectionist, “protectionism” isn’t a dirty word! Such a person will have a clear justification for keeping or putting up trade barriers.

So while the vision is that of free trade between nations, we are probably some way off from that.

5. CSR & compliance pressures – “Compliance pressures” are here to stay. Yet, even after years of debate and discussion, it is evident that there are wide gaps between the perceptions of the various players.

Ever since the industrial revolution in the 1800s, talk of more humane conditions in factories has been prevalent. It took European and American companies decades (at the very least) to move up health & safety and labour standards. However, the industries in the current supply countries do not have that luxury any more, since the pressure on prominent brands and the risk to their image is too high – whether you like it or not, compliance standards are being and will be pushed through aggressively.

The key is to understand how to do it most efficiently, and a critical element in getting there would be to have a set of common standards and database of audits and certifications.

However, let’s not underestimate the challenge in getting diverse interests and competitors to agree to sign on to common standards, and to share information about their suppliers.

6. Consolidation (?) – Consolidation may be a model among mature retailers and mature suppliers, but there is enough organic growth in the market to attract and sustain smaller companies, especially in the case of the “emerging economies”.

Developing markets are breeding grounds for new businesses, each of which feels that they can be the next big thing, and in such an environment, being acquired by another company is the farthest thought from the management’s mind.

Another factor against consolidation on the supply end, comes from the inherent development-oriented nature of fashion products – excellent and innovative product development is not the privilege of large companies, and the cost of entry remains low. So we should question the logic of viewing consolidation as an unstoppable juggernaut.

7. Vertical Integration / Control (between suppliers, brands and retailers) – When companies sit across the negotiating table, they are clearly vying to gain the most margin. Retailers are closest to the consumer, and they have the most margin. The downside is that they also bear the most risk or markdown. So when manufacturers look at becoming brands, and brands look at becoming retailers, they need to keep in mind, there is a cost to moving downstream, even with the extra margin being available.

Over the last few decades retailers have also tried to grow their private label to gain extra margin (in effect, to replace some of their suppliers) – but there is a cost to doing that as well. It is not as simple as just stripping out an intermediary’s cost, since the product development and sourcing operation still needs to be managed.

Vertical integration is the holy grail – perfect vertical integration is what people wish for, but it’s impossible to achieve. The best one can hope for is as much vertical control as possible over the chain from raw material to consumer.

8. Victims of our own success – We treat globalisation as a new phenomenon – the fact is that many thousands of years ago, the Egyptian civilization was trading with the Indus Valley civilization, the Chinese and the Romans had discovered each other way before US department store buyers landed in Hong Kong and Korea.

As Nayan Chanda describes in his excellent book – Bound Together – traders, preachers, adventurers and warriors have created bridges across continents for tens of thousands of years. So retailers and importers in the west, are only following in the footsteps of those pioneers, albeit helped by the communications and travel revolution in the last 30 years.

However, lately, companies’ business models are victims of their own success.

Too much has been outsourced too far. Where earlier, buyer and supplier were next to each other, today there is a physical and cultural distances between them, that sometimes seems impossible to bridge. Where earlier, a buyer and designer could pop around the corner to the pattern room to check the fit, and discuss the quality with the factory, today they sit at opposite ends of the earth, and work in a phase difference of day and night.

The costs related to bringing the skills back certainly are prohibitively high. But clearly bridges do need to be built.

Recreating or transferring the skills that have been lost, or are being lost in the US and Europe is absolutely vital for the industry to survive profitably.

Through training & education, through more frequent travel, through internships and gaining work experience in each other’s environment, or through technology, buyers and suppliers need to invest in reaching something of the sort of understanding and close collaboration that used to exist when buyers and suppliers lived in the same city.

A lot to chew on, and many unanswered questions, which I am sure will bring hundreds of industry executives together again next April at Prime Source Forum 2009 in Hong Kong.

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