Julia Redman, founder of consultancy BuyersEye and former head of buying for menswear, kidswear and homeware at value retailer M&Co, discusses the responsibility buyers have to support their suppliers through the Covid-19 crisis
The impact of Covid-19 is being felt worldwide, in every garment-producing nation, and on every high street here in the UK. The fashion and retail industry is facing extreme uncertainty, and sadly, it is likely to be a case of “survival of the fittest”.
Some retailers, and their suppliers, who were already weakened by the effects of reduced consumer spending, will find it very difficult to survive.
Buying departments, too, are suffering – entire teams are losing their jobs, some individuals are having offers of new positions withdrawn, and most retailers are furloughing staff and enforcing recruitment freezes to mitigate their losses.
Supply chain victims
It is further back in the supply chain, however, where even greater tragedy is unfolding. As retailers cancel and suspend orders to try to save themselves, it is the suppliers, and more critically, their workforce, who are bearing the brunt of the sudden halt in cashflow. Millions of garment workers will potentially lose their jobs and their means of feeding their families.
As buyers, we first need to act with empathy and compassion. The most successful buying departments are those that have built really strong, professional supplier relationships, and it is the strength of these relationships that will be tested now. We need to work together with our suppliers to ensure they still exist when the pandemic is (hopefully) over, and Christmas is upon us.
Retailers who have been unable or unwilling to pay for stock during the crisis will suddenly be tearing down walls and demanding faster turnaround to try to recoup their losses. If the retail industry wants a supply chain to return to, it must be innovative and creative in the way it deals with the crisis now.
We expect our suppliers to be socially and ethically compliant – should they not be able to expect the same from us?
Payment terms, which many retailers are currently extending to 120 days, and some taking increased discounts, or cancelling orders altogether, could be very problematic in the longer term. Factories and suppliers in Bangladesh, for example, will be unable to fund the purchase of fabrics and trims up front, when they have zero cash in the business.
Potentially UK retailers may have to consider returning to doing business on letters of credit, or buying the raw materials themselves, at least in the short term. Both options are more costly and more labour intensive, and could possibly be avoided if we make the right decisions now with the welfare of our suppliers in mind.
In the meantime, communication will be key and embracing Microsoft Teams, Zoom and Skype will help maintain that essential face-to-face contact when travelling is impossible.
You might find that this even brings advantages: having regular face-to-face critical-path and product-development meetings, for example, can only be a good thing, and you can involve the whole team, if you are not already
Effective retail product development technology such as a good PLM [product life management] system, and a pattern-creation, fitting and sealing system such as Optitex, will also be advantageous, to limit the need for actual fit sessions, and multiple sets of samples.
Retailers such as Next and Asos, which are already using this technology have seen a dramatic reduction in lead time and the number of samples required, further reducing cost and the impact on the environment.
Virtual trade shows, digital conferences and video tours are becoming the way forward – at least for the next few months. Shows such as Make It British and Kingpins Amsterdam stepping into the virtual arena.
These events are unlikely to replace the physical shows in the long term: we work in an industry which is based on the touch, feel and fit of the product. However they promise to drive innovation and creativity in different ways, and have the potential to enhance the experience.
So, is that the glimmer of a silver lining in all of this? Does it signal the end of over-production and over-consumption? Will we see reduced costs as a result of new technology, reduced travel and less inventory?
Our industry will inevitably be leaner, and it’s likely that we will all be more technically adept. The more pertinent question is: will we return with a business model that is kinder to the environment, our retail supply chain and its employees?