A nascent trend of clothing start-ups bringing business back to American factories in under way. Over the past two decades, there was a 90 percent decline in apparel manufacturing industry in the U.S., from 940,000 jobs in 1990 to 136,000 in 2015. This has been in part due to the Trans-Pacific Partnerships, which provide incentives such as lower tariffs for companies that want to produce clothes overseas - though the merits of free trade have been hotly contested in this election cycle.
Analyst Insight: For online customers, the buy button is easy; everything behind that is complex. Eighty percent of omnichannel strategy is about inventory strategy. It comes down to making intelligent inventory allocation decisions across the network and building an infrastructure flexible enough to quickly realign inventory to meet customers where they want. The key to omnichannel success is offering the customer multiple options and incentivizing the profitable flows. - Jason Denmon, Apparel Industry Leader, Fortna Inc.
Challenged by fast fashion, prompted by speed to market and buoyed by thoughts of small runs/low inventory levels, reshoring or the return of manufacturing for a company and its brands to its country of origin (COO) has sparked continuing interest in the best strategies for market entry and what it takes to succeed once you are there.
Hermes, a provider of e-commerce and omnichannel services for fashion and lifestyle brands, has made available Smartful, a one-stop application that gives U.S.-based companies access to the same global, full-service options that the company has previously offered only to large online retailers.
Given the vicissitudes of the world's textile and apparel supply chain, China is changing its strategy to counter what Chinese experts describe as the "new normal." That has direct impact on textiles in the United States.
As most shoppers have experienced, ordering clothes online can occasionally be a shot in the dark – not every item fits the way they'd hoped, nor does every color match the description exactly. This not only annoys consumers, but also retailers when those disgruntled customers send their unwanted items back.
President Obama announced nearly $500m in public-private investment to strengthen American manufacturing by investing in cutting-edge technologies through a new, textiles-focused manufacturing institute competition led by the Department of Defense, and by sharpening the capabilities of small manufacturers through Manufacturing Extension Partnership competitions in 12 states. The White House, as detailed in a new report, is also launching a Supply Chain Innovation Initiative focused on building public-private partnerships to strengthen the small U.S. manufacturers that anchor the nation's supply chains.
Analyst Insight: Online retailers must make the returns process convenient for their customers which, in turn, increases the amount of product returned. But every company must find a balance between cost and customer expectations. Should you encourage customers to return products to the store? To the DC? To a 3PL? The answer depends on your brand, culture, infrastructure and average unit price. – Bruce Baring and Jason Denmon, Apparel Industry Leaders, Fortna Inc.