April 23 - U.S. retailers are playing catch-up in the fashion speed race, cutting turnaround times and using technology to better compete with foreign rivals. Bobbi Rebell reports.
Fast fresh and new is always in style at a slew of overseas-based fast fashion chains including Uniqlo, H&M, and Zara that have taken up residence in the U.S. Since the recession H&M and Zara have doubled their marketshare according to Euromonitor International. Traditional U.S. retailers like Gap, and American Eagle are responding by speeding up product cycles- placing smaller orders with more factories, buying fabrics but then waiting until the last minute to make decisions on styles, and getting apparel out of warehouses faster. Matt Katz of The Boston Consulting Group: SOUNDBITE: MATT KATZ, PARTNER, THE BOSTON CONSULTING GROUP (ENGLISH) SAYING: "There are plenty of companies who have made great strides and have reduced supply chains from 14 months to 12 months to 10 months to 9 months and I think there are capability of teams to get back into product pretty quick 3 months, 6 weeks." U.S. retailers are also leveraging technology and inventory management tools in new ways, hoping to maximize the speed to which they can get the right product to the right place at the right time. Brian Kinsella of retail consultants Manhattan Associates: BRIAN KINSELLA, SENIOR DIRECTOR OF PRODUCT MANAGEMENT, MANHATTAN ASSOCIATES (ENGLISH) SAYING: "We are also seeing a trend and a movement toward holding some of that inventory back one layer away from the customer because rather than taking this big bet and distributing all the product out to the store in the first fell swoop. It makes more sense to say we are going to take our best shot with 70% of the inventory, hold 30% of it back." REPORTER BRIDGE: BOBBI REBELL, REPORTER, REUTERS (ENGLISH) SAYING: That way, a store like Loft has inventory ready to add quickly if say a top is selling well at full price here in New York - and keep inventory lean in areas where they've had to mark down merchandise. Stores like American Eagle say they have cut down on large inventories- selling fewer items but selling out. Macy's has said it is also planning to speed up decisions on buying and stocking clothing- especially for the key younger demographic- the millennials. It's an economic group that rivals the baby boomers in spending power: SOUNDBITE: MATT KATZ, PARTNER, THE BOSTON CONSULTING GROUP (ENGLISH) SAYING: "Many folks are thinking about how do I deal with this millennial customer and how do I compete in an environment where the here and the now is so important." But American retailers still have a tough sell. They may be able to get faster, but industry experts say their sourcing remains too bureaucratic compared to their foreign rivals. Bobbi Rebell, Reuters.