facet in the e-commerce era: customization.
Shoppers want what they want when they want it. And so, legacy retailers and online stores alike have focused on artificial intelligence and other technologies to better find the customers who are looking to buy what they sell. But that trend also applies to the factory shop floor. Whether it’s keeping up with the sometimes flighty whims in fashion design or a sudden shift in consumer demand, apparel makers can only adjust if the manufacturing process on the front end is as agile as sales and marketing at the point of sale.
“You can track the work in progress,” Magel says. “You don’t have to wait for the order to be finished at the end of the line.”
If demand drops or shifts, apparel makers can make adjustments on their end in order to match those customer expectations, he adds.
Magel says this kindle of nimble manufacturing is going to become even more important as Amazon (NASDAQ: [[ticker:AMZN]]) expands its own line of private-label attire. Of Amazon’s 74 private labels, 66 offer apparel, according to a Coresight study cited by trade publication RetailDive.
And it’s not just the Seattle-based retail giant’s foray into producing its own apparel that creates competition for other clothing makers. By virtue of its platform and all of the information on it—which products sit in our carts unbought, our search history, user reviews—Amazon has a unique window into what we want to buy. The company’s recommendation algorithms could just as easily point to an Amazon-made shirt as one by a traditional retailer.
Large retailers like Walmart (NYSE: [[ticker:WMT]]) and Target (NYSE: [[ticker:TGT]]) have also recently beefed up their own private-label offerings. “A lot of retailers are doing more design and sourcing and building out their own private brands,” he says.
Following Amazon’s lead, traditional retailers are morphing to become more like platforms, both selling their own merchandise as well as that made by vendors. Making that transition, however, requires a blending of operational lines. “There are no pure-play retailers and wholesalers now,” Magel says. “You have to participate in every channel.”
To that end, he says he believes that technologies like those sold by CGS can help these traditionally separate operations communicate with each other. “Traditional retailers don’t speak wholesale,” he says.
