A Q&A with John Squire and Ron Offir
As our friends at Vogue recently reported, it’s no secret that fashionistas around the globe tend to travel in packs or “fashion tribes.” At this year’s Fashion Weeks, several new fashion tribe trends emerged, ranging from “the bloggers” to “DJ’s” and “The Models Off Duty.” These groups not only describe a physical “look” for the group but also reflect their lifestyles.
Much like their trendsetting counterparts, fashion retailers can also be put into certain “technology tribes.” Historically, this industry tended to fit in the traditional commerce “tribe,” but in recent years the movement to be more multi-channel or omni-channel has become the norm. Retail insiders and influencers tell us, however, that 2015 will be (or should be) the year for fast followers to join the “all-channel commerce” and “advanced analytics” tribes.
After teaming up for the keynote session of Fashion Digital New York in October, entitled “Lessons from the Other Side: How Retail’s Innovators are Dispelling The Ghost Economy – An $800B Issue of Vanishing Profits,” John Squire, president of OrderDynamics, sat down with Ron Offir, a retail visionary and advisor who led digital transformation at Michael Kors, The Jones Group, Coach and Gap. They explored the topic in more depth, discussing the struggles facing the fashion retail industry and why it is so critical for these retailers to become associated with game-changing “technology tribes.”
Squire: You’ve spent years at the helm of some of the most innovative fashion retail organizations in the world. Do you feel that the fashion retail industry is struggling more than other retail industries when it comes to connecting data and organizational silos to enable truly “all-channel commerce?”
Offir: There certainly are unique challenges in the fashion retail industry that stem from our model of continually delivering new seasonal product assortments that lead to nearly 100% turnover of SKUs from one season to the next. So, compared to other segments of the retail industry that do not have as a high a seasonal turnover rate, we have to deal with a higher degree of complexity. Given this complexity, it is then logical that our segment has the most to gain from the opportunities that exist from leveraging current trends in big data analytics and shared inventory. In fact, there are a number of progressive multi-channel fashion retailers who have launched, and continue to perfect, omni-channel retailing to the delight of their customers and shareholders. For me, that is not at all surprising given that the best operators in our segment know that in order to maintain their lead they need to continually innovate in ways that keep them in tune with the shopping needs and desires of their target audiences. The digital evolution of the in-store and online customer experience is paramount to these best-in-class operators, and they continue to deploy technology and operations improvements that delight customers and improve operational efficiency. As these best practices are being established, it is up to the fast followers in the industry to jump-start these important initiatives before they fall too far behind.
Squire: We talk a lot about the concept of "The Ghost Economy" - the $800B data and inventory disconnect that is plaguing retail businesses. What does this mean specifically for fashion and apparel retailers and why should they be concerned?
Offir: Given today's highly competitive retail landscape, fashion retailers cannot afford to miss sales and disappoint customers due to inventory or operational disconnects. We are living within the stark reality that our competition is just one click away and ready to delight our customers if we let them down. We simply cannot afford to be delivering sub par customer experiences online or in store due to a lack of data connectivity or poor visibility to operational issues. Retailers need to be deploying next level analytics and decision intelligence tools that can quickly and consistently point out opportunities. Best-in-class brands are currently leveraging these tools to identify where they might have suffered from an operational oversight, spotlight where they are mis-allocating marketing dollars and to highlight for them where they have opportunities to chase seasonal best sellers while there is still time to get them back in stock. What I find exciting is that the data to drive improved merchandising, marketing and customer satisfaction is already resident in our companies - it's just that many of us have not been leveraging the latest advancements in data analytics and artificial intelligence to shine a light on these opportunities.
Squire: What advice can you give to your peers in the way of short-term and long-term goals, in order to achieve their omni-channel or retail transformations?
Offir: I have been designing, deploying and optimizing omni-channel solutions for the better part of the past decade and a significant number of best practices have emerged. One foundational best practice is the need to properly align the corporate and field incentives of the cross-functional teams that will be launching and maintaining the omni-channel operation. What I have found is that as long as everyone across e-commerce, retail ops, planning, merchandising, allocation and fulfillment realizes benefits (and no one loses) from the potential shifts in channel sales - then these initiatives have a tendency to launch smoothly and with immediately positive gains.
Looking ahead, it is exciting to see how mobile is shaping future omni-channel best practices. For example, there are real opportunities to leverage GPS technology to improve the buy online and pick up in store experience. Additionally, the use of location aware devices will enable the just-in-time delivery of relevant, location-specific product details and promotions.
Furthermore, I believe that the industry will begin to leverage the exciting opportunities emerging from the proliferation of wearables such as the iWatch, mobile apps and iBeacon type of technologies to revitalize their loyalty and rewards programs. The ability to reward customers for a visit to a store, or a particular section of a store, and to then deliver a tailored message or promotion will be a real game changer.
In memoriam
Oscar de la Renta: July 22, 1932 – October 20, 2014
“The great thing about fashion is that it always looks forward.”
