The Need for Speed ... to Market

Excess inventory. Losing pace with shifts in customer behavior. Erosion of gross margin. Selling on markdowns. Missing forecasts. No time for innovation.

What do these have in common?

These are the symptoms of a retailer suffering from a lack of speed.

Speed to market, that is.

If you skim recent headlines, this is what you’ll find:

• Excess inventory woes of familiar names like Target and Walmart.
• A third of footwear executives are now citing shifts in customer behavior as their biggest issue for the remainder of 2022 — a variable not addressed in previous quarters.
• Supply chain disruption continues to linger, resulting in inflated lead times.

The fact is many brands still plan assortments 12 months to 18 months in advance, despite the headlines. And the assortment planning timeline hasn’t changed much from when I began my retail career over 20 years ago.

Unless you're a fast-fashion retailer. Zara and Shein have the capacity to hit the market in less than a month with new product. This is done with localized manufacturing and staying ahead of customer shifts with influencers and insights; the speed from concept to market is unprecedented.

We can see that fast can be done.

Naturally, the question becomes why retailers are bogged down to begin with. Here’s what I’ve seen:

1. Cross-functional teams aren't always involved at critical moments throughout the product creation journey. They frantically work on tasks directly in front of them and are unaware of how their actions affect one another.
2. Some teams are more advanced than others. One could be working with new digital tools while another is sending tech packs to factories via emailed zip files. Or, in my experience as a merchant, digital marketing teams are using data analytics to drive personalized promotional activity while merchants/planners are using Excel to build assortments.
3. There's an inherent resistance to change. People have been working the same way for years, with the same teams, the same calendars and processes.

Here’s the story of a brand I worked with that missed production deadlines and was late to the selling season: A change in fabric used for a garment was switched out during proto review. Design made a switch but was unaware that the material it chose had a lead time of 300 days. It would have known that if the materials team was invited to the proto review meeting.

Design, product development, sourcing and materials teams were forced to stop and scramble. They went back and forth to find a replacement; revisiting an already made decision.

The result: the style was delayed, and profitability was immediately impacted while the goods were still in the factory.

So, what can brands do to start accelerating their speed to market? We offer the following suggestions:

1. Evolve the relationship of functional teams from service providers to partners. This is especially valuable in changing relationships with factories. By viewing them as partners, tasks including materials testing and product fittings can be delegated from retailer to factory.
2. Increase collaboration at critical milestone moments across functional teams. Doing so eliminates the “Start and Stop” activity arising from revisiting decisions already made.
3. Clarify ownership and accountabilities of key calendar activities and process steps. The intent is to eliminate redundancies within the calendar so that teams are spending their time on high-value tasks.

As the product creation calendar is cleansed and teams harmonize, customer insights and innovation can be woven into the process. This is where brands can buckle up and slam on the gas. Keeping pace with a dynamic customer while preserving full-price sales and gross margins.

Lastly, brands should look at the current economic climate as the best time to improve their speed to market. Think of it this way: Consumers are re-prioritizing what they buy.

But this won’t last forever.

Consumers will shift their spending habits when the good times roll, and brands must be in position to rapidly capture demand. Not with the same old, same old, but with creative product assortments and innovative items that are delivered to market when the customer wants them.

Hence, the need for speed.

Liza Amlani is the principal and founder of the Retail Strategy Group, a retail consultancy that helps brands and tech companies to achieve dramatic growth and experience breakthrough results.