Apparel Companies Narrow Focus on Technology
Despite some consolidation on the retail front, technology companies have been holding their own during the economic downturn, indicating that retailers and manufacturers are still looking to technology despite their constrained budgets.
A number of deals have been struck between vendors and retailers and brands in recent weeks, but technology executives said it would be remiss to describe the tech sector as business as usual, as the recession has forced companies to re-evaluate their thinking on all aspects of business.
Apparel companies are taking a more “holistic approach,” investing in products that provide value and durability, explained Bob McKee, industry strategy director for Minneapolis-based Lawson Software. Lawson this week announced it will outfit Norcross, Ga.–based Alternative Apparel with its business-intelligence and sales-planning software.
Other recent deals include Wet Seal partnering with SAS for a business-intelligence system that helps map out size profiling, Billabong signing on for New Generation Computing’s PLM and sourcing applications, and Urban Outfitters using Merkle’s business analytics system to help its multi-channel marketing efforts.
The companies that are looking for technology are focused, McKee said. “Most of the organizations out there looking are serious about technology, and there is a fair amount looking. There are new requirements for controlling business now. The task of turning inventory into cash is paramount right now.”
Ray Hein, executive vice president of PLM supplier Centric Software, added that there is also a group of “hide out in the bomb shelter and wait ’til it’s over” companies.
“It’s easy to understand this thinking, but we truly believe it’s shortsighted and in fact think that it’s a path to failure. Then, on the other hand, you’ve got the companies who realize they’ve got to invest and improve their efficiencies, control their costs, gain visibility, achieve compliance management—all of the capabilities that we deliver—now, more than ever,” he said.
Hein said Centric has closed on a significant amount of business during the first half of the year in addition to add-on business from existing clients.
“We think these achievements are due to three factors—our ability to deliver enterprise-level impact; our significant new product offerings that have brought truly unique capabilities to the marketplace; and our ability and focus on bringing rapid value to customers, usually within six to 12 months.”
Retailers and manufacturers are seeing value in products such as PLM and business-intelligence applications as well as any product that helps improve speed to market.
“The truth is, manufacturing is not coming back to the U.S,” acknowledged Roxy Starr, chief information officer for Malibu, Calif.–based Shapely Shadow Inc., which develops and markets FastFit360.com, a visual-collaboration tool for fit sessions and other design scenarios. “Technology is the only way to grow and speed up our process communicating in multiple languages,” she said. “Technology is the key to job growth.”
The apparel industry has a history of adapting technology at a slower rate than other industries, but concepts such as “SaaS” (software as a service), which is hosted over the Internet, have lowered the barriers to entry. SaaS applications are significantly less costly, quicker to implement and easier to learn.
Atlanta-based merchandising-software provider Predictix has been able to grow during tough times due in part to its SaaS model.
“It changes the stakes,” said Executive Vice President Rafael Gonzalez Caloni. “Traditionally, you would have these very long bake-offs where the stakes are high, and then you’re talking about another year [of implementation] after you made your decision.”
Predictix provides a system that helps manage allocation, pricing, forecasting, markdowns and replenishment for retailers at one-fifth to one-tenth the cost of traditional systems. Similary, Shapely Shadow’s FastFit is also offered on an SaaS basis, allowing clients to pay monthly. Starr said the company is growing exponentially as a result. FastFit allows designers and production staffers to collaborate by viewing samples on a model or body form to get feedback on how a garment fits. The technology enables users to zoom in and turn subjects around. —Robert McAllister
