The COVID-19 pandemic has forced retailers and brands to fundamentally rethink business models, including how they discover, create, make and sell new products. Retailers and brands should focus on four goals as they rethink their models for product development:
Faster: Significantly reduce the time between product inception and the point of consumption to better align with consumer demand and avoid committing to unnecessary inventory
More Virtual: Make the jump to discover, create, make, and sell new products via digital product creation (DPC), leveraging 3D design tools, digital avatars, material digitization and more to collaborate virtually across the globe and leverage 3D assets throughout the business
Smarter: Use predictive analytics to make better decisions, especially style selection, pricing, and quantity decisions
Globally Sourced: Spread the sources of production across the globe, enabling on-shore, near-shore and off-shore production capabilities based on segmented product development tracks
However, at a time when product leaders have never had more clarity around the need to make strategic changes, they have never had less discretionary money to spend on making them.
So, what can leaders do now to make practical, less expensive commitments to updating product development models? We have identified lessons learned in three key areas. Product leaders can use these immediately to begin to improve their product development models.
1. DPC Costs
The costs for DPC technology (3D licenses, asset storage, rendering, hardware, etc.) at scale can add up to a considerable investment. There is a cost to build this new capability, and the state of the market (disconnected, non-platform, interoperable) causes higher costs for brands in the short-to medium-term.
Some tactics we’ve seen retailers and brands use to mitigate costs:
Partner with factories to invest in 3D licenses so that they can play a role in digitizing and fabric scanning.
Set up COEs in liaison offices – they’re closer to source, with a lower cost of talent, and can be more efficient than US-based teams.
Consider Asia-based services that have scale, who may be able to offer 3D as a service at a lower cost than investing.
Share costs with other functions within the organization that may also benefit from the investments. For example, rendering and DAM costs can be shared with omnichannel or marketing teams. This requires cross-functional alignment, collaboration, and roadmapping.
Maintain high utilization of licenses and hardware – if investments are made, they must be used. It’s not sustainable to invest in licenses and hardware for a US-based team that still works with legacy tools and processes.
2. Digital Asset Storage/Retrieval
The early adopters who have been most successful here have built their own cloud asset repository. These include viewers that allow users to visualize apparel 3D file formats and integrations that drive efficiency and connectivity with other tools and data systems.
The challenge in the industry right now is that retail PLM systems are not currently capable of managing these heavy file types at scale, and content management systems have been built for media (photos, movies, documents, etc.), so they struggle with native 3D apparel files.
Here are a few leading practices for digital asset management (DAM):
Establish a library strategy that includes:
Storage plan for color, materials, trim, etc.
File naming conventions
Statuses connected to PLM data
Require integration or connection of metadata between PLM and the 3D software. It needs to carry in style numbers, material IDs, categories, seasons etc. that are included in PLM. This allows connectivity back to a line or line plan, and is critical for filtering.
Require integration or connection of shared library/DAM to the 3D software.
3. User Adoption/Scaling
Since DPC in apparel has the potential to be the most significant change in many people’s careers, there are many questions about the impact to training, roles, and responsibilities within end-to-end product teams today.
As companies roll out 3D capabilities, we have seen the following practices be highly successful:
Identify intent and scope. Define and broadly communicate what you want to achieve through DPC. Define, prioritize, and communicate the uses cases associated with these goals. We have seen our clients achieve success by focusing on the 80%: 80% of styles in 80% of the categories for 80% of the use cases. To achieve scale and realize benefits, companies must have a roadmap for more than just one or two use cases.
Always start with solid, tried-to-true organizational change management (OCM) practices, including stakeholder mapping, What’s in it for Me (WIIFM), communication planning, and executive engagement. These are important for any implementation but critical for something as complex and cross-functional as digital product creation.
Staff a dedicated transformation/activation team. This group – usually made up of functional experts (design, merchandising, art, technical design) who have an interest and aptitude with the new technology – can drive the change throughout brand teams. As DPC is rolled out in waves, this team works closely with the implementation throughout to ensure that the right behaviors occur.
Focus on value realization. Create a clear business case, identify financial, operational, and strategic metrics, and focus resources on measuring, tracking, and reporting the value created by the program. This will validate the program successes with leadership and with teams.
By drawing on lessons learned in these three areas, product leaders can start making practiced, impactful changes to their product development models, while also laying the foundation for more significant strategic changes which may happen in subsequent waves.
Will is a Director at Kalypso and leads the firm’s digital capabilities for consumer clients. He focuses on advising clients on strategies and tactics that will increasing the capability, scale, and value of end-to-end Digital Product Creation (DPC).
Steve has dedicated his entire 30-year career to consumer companies and their suppliers, first as a retail executive and more recently as a partner and practice leader for several prominent consulting firms.