From Kowloon to Kansas: Amazon brings it all back home again
If you have missed the story about how Amazon has just won a patent for a self-contained, on-demand apparel manufacturing process, then you will probably hear of nothing else in the next few days.
This is more than fast fashion, it is fastest fashion, because clothes are only put into production once an order is placed (actually, there is still some aggregation involved – we are not quite one-to-one, but we are close).
Once again, Amazon forces us all to rethink retail, and it’s worth exploring.
First of all, I hate to reference Trump talking about bringing American jobs back to America, but once the actual clothes are made within driving distance of the actual customers, then the economics of sourcing from China, then Vietnam, then Mongolia, and then who knows where next, suddenly fall apart.
Trump talks about car workers, but what about all the people who currently work in retail stores that are closing in the US at a rate not seen since 2008? Will they end up working in Amazon’s new utopia?
Secondly, most fashion retailers are still trying to escape the now-redundant four seasons model and ape the likes of Zara and H&M, but most have a long way to go; meanwhile, Amazon’s announcement sets them back even further, and I wonder if we will not see more casualties among the laggards.
Thirdly, most forecasting and replenishment models and their attendant software are no longer fit for purpose; they are predicated on channels, not customers, and even while retailers try to make the transition from one to the other, or at least some type of balance, most are doing it too slowly.
If you are still talking about leveraging your investment in legacy systems, trying to get merchandising and supply chain to collaborate, thinking your mobile web is so good you don’t need an app, or demanding cash for a major store refit programme, then it may already be too late.
What the CEO must now consider is, once customer demand is understood – and that’s a destination many retailers will never reach – then it will drive every single process in the business, from design and manufacture, all the way to delivery and returns.
And the reason many will never make it? This isn’t retail. Once supply serves entirely at the pleasure of demand, we need a new word to describe the activity. Any ideas?