Here’s a Disruption the Retail Industry Is Embracing

Risk is a necessary step

Author: Andria Cheng

October 12, 2017

The traditional retail industry has been practically overturned by outside forces. Now it faces a new kind of disruption: self-disruption.

Take Levi Strauss & Co., which made its first blue jeans in 1873. The company’s new Virtual Stylist personalized product recommendation tool went live online in the US in August 2017, just a few months after the idea got the budget in April, said Claudia Roggenkamp, vice president of eCommerce Europe at Levi Strauss, at a Shoptalk Europe panel in Copenhagen this week.

Not only did the tool come to market rapidly, she said, it wasn’t subjected to so-called A/B testing, and it was built in partnership with a smaller startup firm rather than the larger vendors Levi normally works with. In fact, it required Levi’s legal team to draw up a different type of contract.

“Traditional companies are risk-averse,” said Roggenkamp in an interview with eMarketer Retail. She and her team were “all pleasantly surprised” at the speed of the rollout, given that a company like Levi is not really set up for that. “It’s very unusual for big companies in general. We wanted to bring something to market fast and put something in front of consumers fast. Rather than 100% tested or even overtested, we prefer to bet on speed rather than making it perfect—which I think is a big cultural change.”

Still, she acknowledges Levi still has plenty of work to do.

"Branded companies need to move from product to experiences."

“Twenty to 30 years ago it was enough to have iconic products like 501 [jeans to win a consumer],” she said. “Now a lot is about unique experiences. Branded companies need to move from product to experiences. ... The more consumers are on their mobile phones, the more we have to think a lot bigger about [their] experience and location.”

Roggenkamp’s sentiment was shared by many others in the industry.

At global sourcing and logistics giant Li & Fung, which works with some 8,000 retailers and 15,000 suppliers, including many traditional apparel retailers and brands, one big goal is to get the fashion industry’s traditional cycle time of some 40 to 50 weeks down to at most five to six weeks, said Group CEO Spencer Fung at a keynote talk at the conference.

“With some startups, it’s a few days [of cycle time],” he said. “I feel I’m a turtle racing against others. ... Speed is our top priority. Almost every single conversation I have with [customers] is now about speed and not about cost.”

His game plan for that also involves self-disruption and getting its customers connected on a cloud-based platform.

“We want to digitize the entire supply chain [before someone else does it],” he said. “In apparel, the whole supply chain is very analog. We still use phone calls, faxes and Excel to do business.”

"We’d rather disrupt ourselves than other people disrupting us."

In the future, everything will be connected digitally. “We’d rather disrupt ourselves than other people disrupting us.”

The urge to self-disrupt can be seen across the retail spectrum, from retail giant Walmart, which this week unveiled plans to scale back growth of physical locations so as to focus on ecommerce, to mall developer Westfield, which is advocating that the industry do something that would have been unthinkable in the past: share data.

“It’s time for us to come together and share data,” said Steven Lowy, Westfield’s Co-CEO, at another presentation. “Every retailer on their own only deals with their own business. They don’t know what customers did yesterday [for instance]. Retailers that are physical in nature need to figure out how to collaborate.”

Photo by Matthew Hamilton on Unsplash