E-commerce is the bad boy for turning traditional retail inside out so says everybody, but the harsh reality is that the new kid on the block is only a part of the problem. XCEL Brands chairman and CEO Robert D’Loren assessed during a Sourcing at Magic panel , “Disruptive forces are impacting all sectors, the way people shop will continue to change and companies must move toward where things are going. E-commerce is only 20 per cent of the problem. At the root of the problem is consumer behaviour.”
Today consumer is king he/she decides trends, timing and what they’re willing to pay. Robert prophecises, “The only way you can win in bricks today is by bringing something new to the store every single week. And luring consumers can’t be about adding an experience just for experience’s sake. How many Zara stores have a Starbucks in them? How many salons have you seen in a TJX? The reason they’re winning is newness.” However, constant newness means much tighter supply chains, enhanced decision making and far more local for local production.
All things Sourcing Journal president Edward Hertzman says, “It’s really difficult for people to change. From a supply chain perspective [companies] know what they need to do, but they’re just not doing it.” Panelists were unanimous “It’s paralysis…”
Edward’s analyses of Zara is the store has been successful in selling fast fashion despite the fact that the retailer doesn’t trumpet a particularly special in-store experience, there’s nothing much that adds convenience and even online, there’s little by way of differentiation at zara.com, but ‘52 weeks of fashion’. “It’s the same thing that TJ Maxx does. They’ve created an environment that if I go in there, I have to buy now because it won’t be there the next time I go back. At Macy’s, it’ll still be there and if I wait long enough, they might give it to me for free with enough coupons.” Edward said it upfront. At both the above stores, the price marked is the price you pay. The obnoxious markdown is absent there.
