President’s Foreword | Ed Gribbin
When each of the last six years began and we recovered, albeit slowly, from the worst recessions in over seventy years, we still had a pretty good idea of what to expect. We were able to accurately predict stagnant household incomes, gradually improving employment percentages, rising wages in China, and low, single digit growth for apparel and footwear. We weren’t necessarily thrilled, but we were confident about what was going to happen. Not this year!
2017 looks to be the most unpredictable year since the global financial crisis ended an incredible run of growth and profitability for apparel, footwear brands and retailers. The political upheaval that brought us Brexit and Donald Trump will continue to confound and confuse us as we try to move forward with our businesses. Trade policies are sure to be upended, but replaced by what? Tax policy is sure to face “reform” but what does that mean? Whatever happens, points to tighter margins for retailers and brands, higher prices for consumers, and still few, if any, apparel and footwear jobs coming back.
Interestingly, in the eye of this hurricane, consumer confidence remains high. Interest rates remain low, the stock market is booming and unemployment is near record lows. Auto sales are strong and housing is bullish. But, with the rise in mobile technologies and e-commerce sales and the precipitous drop in mall traffic, retailers and brands are not nearly as confident as their customers. They have way too many stores, many in the wrong locations; they have not achieved the omnichannel objectives they have been investing in for the past few years and Amazon is stealing their customers. Add to the mix disruptive retail start-ups who customize, personalize and predict, through data analytics and clever algorithms, what consumers will want before they want it.
Yes, 2017 will be full of uncertainty. But that doesn’t mean we should wait and see what happens before setting strategy and defining the tactics that will allow us to achieve our objectives. Now is a perfect time, amid the chaos, for forward-thinking retailers and brands to take advantage of the confusion and build competitive advantage by:
- Embracing a customer-centric philosophy understanding that they call the shots now;
- Shrinking the product development process using 3D technologies and getting new products to customers faster and more frequently;
- Shortening supply chains but leveraging near-shoring opportunities;
- Encouraging decisiveness and risk-taking; and
- Developing an ‘Amazon-strategy’; whether it’s an offensive or defensive one, there are effective ways to compete in their on-demand, same-day, Prime-world.
Along the way, we at Alvanon are here to help. Our team of knowledgeable, resourceful industry experts can help with strategy, tactics, education, facilitation, guidance, leadership and just good old-fashioned advice. We hope to be of service to you and make 2017 a winning year, not an uncertain one.