The evolution of product life cycles coupled with market volatility is putting increased pressure on the lifestyle industry. This ever-changing landscape demands accuracy in planning and forecasting as well as seamless co-ordination to avoid instant obsolescence.
How lifestyle brands can manage the product life cycle for competitive advantage
What consumers want, and what they say they want, can vary drastically. Lifestyle companies must adapt their production and logistic capabilities to keep pace with these sometimes disparate expectations to ensure competitiveness.
Fashion retailing is all about speed. Brands must identify trends, replicate, produce and distribute on the high street at breakneck pace to be first-to-market. The rise of brand-owning fashion retailers, who can have varying degrees of “fast fashion”, reveals much about one of the pressures on the lifestyle sector. As it faces a constant battle to stay relevant and meet insatiable consumer demand, the sector’s supply chains must be able to react quickly to reflect the latest developments on the catwalk.
At the same time, the number of ways consumers can discover, browse and buy has exploded thanks to the growth of e-commerce and social media. “Lifestyle companies’ customer base is becoming more fragmented,” says David Newton, North America head of lifestyle and retail at Maersk. “They have their own websites and flagship stores, but they also sell to key retailers. They have to handle different product flows in different ways—single items on the one hand and bulk deliveries of multiple sizes and colours on the other. That makes it very complex and they lean heavily on technology.”
“We can see an increasing pace with which new products, technologies and innovations are introduced,” says Christiane Dolva Törnberg, head of sustainability at outdoor clothing company Fjällräven. This is leading to “super-short product life cycles”, she adds, and “there is a risk that people will no longer ‘invest’ in a garment which means they have no real connection to it, or, as we like to say, there’s no ‘emotional durability’.”
But a growing number of people are searching for longer-lasting alternatives, as seen in the rise of “slow fashion” and circular economy concepts such as upcycling.
Fjällräven has deliberately chosen to avoid short-term trends or products that become irrelevant after their first season, Ms Dolva Törnberg says. “We are not chasing short-term trends and hence we have kept our focus on developing products that can withstand the test of time. This is not only in physical durability but also in timelessness, ensuring they can be sold for multiple seasons.”
Wear and tear
Supply chains can be “very long, complex and messy,” says Ms Patsy Perry, reader in fashion marketing at Manchester Metropolitan University’s Fashion Institute. “It’s a very long way from where the fibre is grown through all the different stages of production to selling the finished garment. Producers face the dual pressures of price and speed, which creates a lot of problems.”
This is particularly true when the sector is simultaneously hit by an abrupt halt in demand and massive supply disruption, as happened this year due to the covid-19 pandemic. “To cope with a shock like that, you need a really agile supply chain,” Ms Perry says.
Combined with the ongoing threat of the US-China trade war, there is growing interest, she adds, in near-shoring production so that it is closer to end markets. “Production may be a bit more expensive, but there is less risk of being weeks out of sync and having to sell at a discount.”
Fast fashion is here to stay, Ms Perry explains, making it important that brands can predict trends more accurately. This is being done through innovations such as subscription models that not only give brands more data but also use tools such as machine learning and artificial intelligence to track what people are searching for and sending them suggestions as to what to buy next.
Supply chain makeover
Ultimately, though, the key to success is being able to leverage the most cost-effective labour markets in order to retain a competitive advantage, says Mr Newton. This means that brands are constantly looking for new supply sources and need their logistics infrastructure to respond accordingly. “If you’re moving your production from China to Vietnam, Indonesia or India—many apparel makers are looking at African markets such as Kenya and Ethiopia, too—you want your supply chain to run the same as it did in China,” he says. “We have to create and maintain infrastructure that supports brands wherever on the planet they are sourcing their products.”
This means offering more than simply a shipping service, Mr Newton adds. “That’s why we’re moving from containers to offering a complete service. The lifestyle brands have to be nimble and agile—and so do we. They can see information in a very granular way and their supply chain needs to respond to that.”
In tandem with these ever-growing demands for rapid response supply chains that can cope with the pace of fast fashion, there is growing pressure to become more sustainable and reduce environmental impacts in areas such as carbon emissions and the use of plastic and water. To achieve this fine balance, the adoption of emerging tech and greater co-operation with suppliers will be essential. “My focus lies especially on how to leverage new production technologies and close supply-chain partnerships to lower the environmental footprint of our products,” says Ms Dolva Törnberg.
“Technology plays an important role in many areas of our business. This ranges from the improvement of the product development process by using 3D patterns, for example, to how we can streamline our product master data, maintain contact and dialogue with end consumers and increase co-ordination and traceability in our supply chain,” she adds.
“We have new technology on traceability focusing on getting full transparency in a complex supply chain that affects the level of dialogue and openness we have with our suppliers.”
As lifestyle brands gain access to demand data much earlier, the supply chain can react faster, too. “There has been significant investment in the first mile and the last mile,” says Mr Newton. “That brings both the brands and their suppliers closer to their demand and gives them the ability to respond much more quickly.”
While product life cycles for some goods are becoming increasingly compressed, others are focused more on durability and sustainability. Lifestyle brands are also having to deal with multiple distribution channels that have very different requirements and time frames. To enable them to manage these often-competing trends, they need a supply chain that is flexible, reliable, transparent and nimble from the factory to shop floor.
The lifestyle brands have to be nimble and agile – and so do we.
We have new technology on traceability focusing on getting full transparency in a complex supply chain that affects the level of dialogue and openness we have with our suppliers.
Produced by (E) BrandConnect, a commercial division of The Economist Group, which operates separately from the editorial staffs of The Economist and The Economist Intelligence Unit. Neither (E) BrandConnect nor its affiliates accept any responsibility or liability for reliance by any party on this content.
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