Thursday, June 3, 2021

What Pearl S. Buck Knew About Arab-Israeli Relations



Why a lesson from her 1948 novel “Peony” should be applied to this ongoing, deadly conflict


The conflict between Israel and Palestine is a powder keg for the world with a short fuse. Now the fuse is (temporarily) blown out, and we are led to believe that a new government in Israel (maybe) will solve the problem. History tells us that it won’t. 


In researching for my book about US-Chinese relations, I came across a passage in Pearl S. Buck’s 1948 novel that I believe applies to the current situation in the Middle East and reveals the plain truth about the nature of the situation in Israel/Palestine; recognizing the plain truth is the only route to a solution--in all cases and always


Pearl S. Buck (1892-1973) was the daughter of Christian missionaries in China, where she was born and lived until 1934. She is best known for her Pulitzer Prize-winning book “The Good Earth” in 1932. Her work earned her the first Nobel prize ever given to a woman in 1938. After coming to the US, she wrote, taught and advocated for Chinese and minority causes.


The book for which she is most acclaimed is the story of the travails of a Chinese peasant family. 


So what should she know about this current, seemingly unending conflict that inflames the rest of the world with its flash fires, simmering forever under the surface and never being put out. What is the solution to the problem? Many Presidents and diplomats have tried, for decades, and still, it defies resolution. Worse, in today’s connected world, the information is available to everyone on video and, like a California forest fire, throws its embers everywhere, becoming an instant global conflagration.


So why should Pearl S. Buck know anything about Jews and Arabs? I believe that her later novel, Peony, about a Jewish family in Kaifeng, China, points directly at the cause of the conflict, which is necessary for a resolution-if there can be one.


She was born and grew up in China, so what did she know about Jews? Were there Jews in China at the time? The answer is yes. The Kaifeng (Henan) enclave is notably famous, but there have been Jews resident in China since the 8th Century AD, who were known to trade in China up to 6 centuries prior. China is part of the Jewish Diaspora; it started to figure during the Han Dynasty after the Silk Road was created to facilitate trade between China and the Middle East. Waves of Jews later followed this route between 618-807 AD, having been blessed to interact by the Tang Dynasty Emperor. Later, during the Song Dynasty, the Kaifeng community began to be formed. 


Let’s note: In contrast to many other parts of the world, Jews were accepted in China, despite their physical, racial and religious differences.


Buck’s novel, Peony, written in 1948, is the story of a Jewish family, the House of Ezra, in the Kaifeng community. Peony is a bondmaid whose only job is to take care of the only child and son of the family, David. David’s father, while observant of Judaism, is half Chinese, which makes David one-quarter. Ezra is a respected merchant in the community, with a Chinese partner named Kung Chen. Throughout the book the internal struggle between the traditions of Judaism and the open-minded and accepting Chinese community is a main element. David sees and falls in love with Kaolien, daughter of Kung Chen, and wishes to marry her. This is not acceptable to Naomi, David’s mother, who wishes David to marry Leah, the daughter of the local rabbi, so that he can personify the perpetuation of the faith. She moves the rabbi’s family into her house to promote the relationship between David and Leah. 


Significantly and notably, the rabbi is blind. 


The exchange that relates to the current Arab-Israeli situation takes place in the synagogue between the rabbi and Kung Chen (note that, when this incident takes place, Kung Chen has already accepted that his daughter marry David).


Kung Chen meets David on the street, and David informs him that he has come from the synagogue but will go back there. Kung Chen asks to accompany him, which David happily accepts. In his previous visit, David has observed inscriptions written by congregants which emphasize the inclusion between Judaism and Chinese culture. One inscription said, 


“Worship is to honor Heaven, and righteousness is to follow the ancestors. But the human mind has always existed before worship and righteousness.” 


Another, which both Kung Chen and David read, says,


“From the time of Abram, when our faith was established, and ever after, we the Jews of China have spread the knowledge of God and in return we have received the knowledge of Confucius and Buddha and Tao,” 


This is a message of inclusivity, not exclusion. Both David and Kung Chen are happy with this message. But, when the Rabbi becomes aware of their presence in the synagogue, including the Chinese non-Jewish man, he sings a different tune. The exchange that follows is the significant allegory for the current Arab- Israeli conflict.


The rabbi becomes angry when he discovers that Kung Chen is in the temple. He berates David and tells him he should not have brought a Son of Adam into the holy place. Kung Chen responds with the statement, “I am no Son of Adam. There is no such name among my ancestors.” The rabbi retorts that all heathens are sons of Adam, and only Jews (David) are sons of God. Kung Chen says that he does not want to be called the son of a man of whom he has never heard. 


The exchange heats up between them as Kung Chen becomes insulted and angry. The interaction goes as follows (soon you will get my point, be patient and read on):


Kung Chen: “Moreover, I do not like to hear any man call only himself and his people the sons of God. Let it be that you are the sons of your god if you please, but there are many gods.”


Rabbi, trembling: “There is only one true God, and Jehovah is His name.”


Kung Chen: “So the followers of Mohammed in our city declare, but they call his name Allah. Is he the same as your Jehovah?”


Rabbi, yelling: “There is no god beside our God. He is the One True God.”


Rabbi, loudly, responding to Kung Chen’s statement that beyond this earth we cannot know: “Beyond this earth we can know! It is for this that God has chosen my people, that we may eternally remind mankind of Him, Who alone rules. We are gadfly to man’s soul. We may not rest until all mankind believes in the one true God.”


Kung Chen, in a kind voice: “God--if there is a God—would not choose one man above another or one people above another. Under Heaven we are all one family.” 


This is an allegory for the past and current situation between Palestine and Israel. Both, in their purest state, are religions of exclusion, claiming that theirs is the one true faith and that all others can be heaped into a group. Some Jews call them Goyim or Gentiles, while some Muslims call them Kafir or Infidels. Notably these are not all or maybe even most Jews or Muslims; but they are the primary actors in this conflict (who may be using the religious differences to their own political end).


So here we are: two strong, passionate, exclusionary cultures, living next door to each other through a legislated nationhood, facing off in a battle that has been going on for ages. Either/Or, not Both. Only now it gets more dangerous with each flareup, creating enmity, hate and misunderstanding worldwide.


Imagine if, in Peony, the rabbi were having this argument with a Muslim, maybe an Imam, rather than Kung Chen. Would it have come to blows? Probably. 


David, who is physically and spiritually part of both cultures, doesn’t know how to feel at first, but then remembers the inscriptions about the human mind, and the free exchange of cultures, and decides to marry Kaolien rather than Leah. Kung Chen actually remarks earlier in the work that the hybridization of the two cultures, whether by marriage or interaction, makes both stronger.


In Peony, cultural understanding and compromise is juxtaposed with a clear and fanatical exclusionary mindset, and is what wins out in the end when David marries Kaolien and gives birth to (mixed) children, happily prospering in Kaifeng as part of the community of Jews and Chinese living and working together. Had he married Leah and become a proselytizer of the religion as superior, special and exclusive, the outcome in his life and in Kaifeng would have been very different. Not better, just different.


The current story of Israel and Palestine can be imagined to be an ongoing argument with no compromise or end between the Rabbi and his Muslim counterpart, both insisting on their religious culture as superior, to the exclusion of the other, and all others.


Israel and Palestine can never conclude this battle if each insists on cultural, religious supremacy and doesn’t recognize the the other culture as different but equal. Given that their lingering hate spreads like a virus around the world, there is an imperative for a real, lasting solution that is much bigger than both of them. Cultural compromise, fueled with genuine caring about children’s lives and welfare, is a small price to pay for what would be considered a monumental victory for peace and understanding.


Changing the government won’t do it.


[1] Wikipedia.com, “History of the Jews in China,” https://en.wikipedia.org/wiki/History_of_the_Jews_in_China

[1] Buck, Pearl S., “Peony: A Novel of China,” (New York: Moyer Bell, 1948) p. 147.

[1] Ibid., p. 149.

[1] Ibid., p. 150.

[1] Ibid., p. 152.






Sunday, April 4, 2021

Economist: “Sweatpants Are A Designer’s Worst Nightmare”—Is dressing up another casualty of the Pandemic?


 Economist: “Sweatpants Are A Designer’s Worst Nightmare”—Is dressing up another casualty of the Pandemic?




Are we doomed to be sloppy?

 

An article in The Economist 1843 Magazine written in March 2021 thinks so—maybe.

 

What do you think?

 

There is no doubt that the year of the Pandemic took a grave toll on apparel, maybe more than any other industry.  Let’s look at some numbers:

 

First, of all retail sectors, apparel and accessories have suffered the most, almost diving 100% last year and still seriously in deficit.


 


Next, let’s take a look at the total sales picture. From a peak of about $34 billion in November 2019 pre-Christmas, sales sunk to about $7 billion in May 2020 and only could recover to about $30billion at Christmas 2020, after operating in serious deficit for almost a year:

 




 

The kids didn’t get new clothes, either. Family clothing stores followed the same trend, but even worse; the nadir in May 2020 was about $700 million from a peak of almost $15 billion.



 

Some major companies did well during this period, and some did not. Take a look at the following graph and tell me what the common denominator is for those who saw increases:


 

Crocs. Eh? You don’t wear those to the office or on a date. Wolverine- Moccasins, Hush Puppies? See the point now?

 

So, dressing up is dead and we all fall down in sweats? Hoodies for dinner? To a meeting, though? The author of the Economist article entitled, “Fashion Victim: Sweatpants are a Designer’s Worst Nightmare: The Shape of Things to Come,” [i]says, “The rise of sweatpants represents the demise of fashion as we knew it.”[ii]

 

So, is this true? Are we going to see hoodies in restaurants? In offices? My answer to that is no and no. And it has been for more than a year, which I have expressed in my isourcerer.com article in February of this year, my informal poll of nearly 100 students from the US and other countries begs to differ:

 

My students will happily shed their hoodies and sweatshirts to dress up when person-to-person and person-to-group interactions are permitted and safe. They were nearly unanimous about that. One student went so far as to say she felt like she would throw out her entire wardrobe. Bright colors, happy clothes that actually fit and don’t make you feel like taking a nap will come roaring back. 

 

Those of us who have experience in the world of retail (pre-Pandemic and pre-Ecommerce) and have a good merchant’s sense of trends incoming all agree that the lack of buying clothes for a year (except online which seems to have been Crocs and Mocs) will have a snapback some are calling “the roaring 20’s (100 year anniversary which we hope will not end the way the last 20’s did), insofar as it will constitute not only wardrobe additions, but wardrobe replacement).

 

In fact, here is my contribution to the chorus, my solo as it were: I believe we are going to see a new attitude toward dressing that has been in remission since the jeans craze of the 1980’s and subsequent approval for casual dress in offices (because the boss wanted to wear jeans too). No, we won’t have dress codes to wear a tie and suit to work as we did in the 1970’s; if there is any code to come, it may be that offices set limits on how sloppy you can look. 

 

The real trend will be a reaction to the Year of the Pandemic where people began to recognize that a sloppy you is not your ideal presentation to the world; in fact, it is pretty damn embarrassing. And that you are what you wear; look good, feel good (Ricardo Montalban vintage: “I feel mahvelous, dahling”). Wait-will “dress for success” come back into people’s psyches? It could be…

 

This revolution will also be a quality revolution. Renewed pride in your appearance will require your clothes don’t look cheap; this will spell trouble for those purveyors of disposable clothes like Inditex and H&M (I have complete faith that they will respond but it may take some time and rocky roads).

 

One more blow to the fast-fashion brands will be that people not only won’t want to look cheap, they will NOT want to look just like the person next to them (and also on the other side); so we will see a drive for Individualism in apparel, a definite departure from the cookie-cutter fashion that ruled the world pre-Pandemic.

 

We merchants had solemn responsibility to not only spot the fashion trends—fit, silhouette, fabric, the Black Swan (actually, significant fashion changes can come from the Unknown Unknown), but when we bought merchandise to populate our t-stands and round racks, we had better figure out the right color. There could be few worst disasters than having thousands of the right style in the wrong color. So here I go with another risky prediction, one which I have said before: Bright Colors can do the best job of externalizing our psyche and will have the most robust response both physical and online.

 

None of this is written in stone or on tablets (stone ones). And world events could easily get in the way of my predictions (such as European countries like France bungling the vaccine response and prolonging the pain of Pandemic). But I think, all things considered and not considering Black Swans (which you never get to consider until they show up at your door), my predictions are accurate.

 

The one thing that I can virtually guarantee is that the Economist column writer is wrong about the enduring influence of sweatpants on fashion. If anything, their influence will be a reverse effect. 

 

The author backtracks and covers his butt at the end of the article. After a headline that pronounces sweatpants the Wicked Witch of fashion, he backtracks and says, “One day we will go out again and we won’t be wearing sweatpants.”[iii] So which is it, then? I guess it depends on when “one day” is. I can speculate on that: One day is 2021 Fall season to 2022 Spring season, the start will be fast and the momentum will leave many retailers in the dust.

 

And, therein lies the biggest danger to the revival of the fashion business: That retailers get lazy, or lack vision and merchant abilities, thus failing to prepare the inventory when the customer wants it, or blindly following the Pandemic Trend as if it were going to last forever. Google sweatpants and you will see that everyone from designer to mass market is rushing to compete in the Red Ocean of sweats. From the online merchandising, it would see that the Economist writer is correct.

 

Again, I don’t agree and think that stores are lobotomously missing a key post-Pandemic trend. That enduring incompetence can scotch this recovery; however, for those of us who have the right merchandise at the right time, it IS the Roaring Twenties. At the other end of the spectrum, the Grim Reaper will be invited to the party, as he was so many times in 2020.

 

Send me your opinions! You are part of the customer base. Then, when we get enough opinions, it will be more than opinion—it will be proof.

 

Copyright 2021 Michael Serwetz

 

(Origin of all graphs are documented on the graph itself and text quoted is duly footnoted below)

 



[i] www.economist.com/1843, “Fashion Victim: Sweatpants are a Designer’s Worst Nightmare: The Shape of Things to Come,” https://www.economist.com/1843/2021/03/17/sweatpants-are-fashion-designers-worst-nightmare?utm_campaign=the-economist-today&utm_medium=newsletter&utm_source=salesforce-marketing-cloud&utm_term=2021-03-19&utm_content=article-link-7&etear=nl_today_7

[ii] Ibid.

[iii] Ibid.









Tuesday, February 23, 2021

Exclusive: Not a Crystal Ball: A Look into the Fashion Industry’s Post-Pandemic Future

 


 


In my last article for Fashion Mannuscript, “E-commerce’s Great Leap Forward” I wondered about the Post-Pandemic future of the Fashion Industry. Which, as we all know, suffered greatly during the Pandemic when everyone was sequestered, stores and offices closed.


In addition to 50 years in the industry, I teach university students who are from all over the US, as well as from China and France, among other nations. Since the Pandemic is a mission-critical subject for marketing, we discussed the effect on e-business and p-business at length, particularly their prediction of and plans for the fashion industry and their own wardrobes. They responded to my questions passionately. Their answers since last Spring when we were forced into isolation relate to “what’s next after the Pandemic has abated?” Last Spring, a very few months after the Pandemic lockdowns started, my students and I sensed that the significant (sometimes catastrophic) emotional toll that the Pandemic exacted on isolated people was unprecedentedly traumatic. Shocks produce affective compensation. Soldiers exposed to battle trauma may develop PTSD which causes extreme reactions from the emotional stress of battle to their lives afterward; likewise, average humans (who had never considered any of what might happen to them, unlike a soldier who is well informed of the risks of battle) develop extreme or severe reactions to their unprecedented deprivation.


So it is with the folks and their fashion. We know that the fashion industry suffered unprecedented losses, some as much as 80%. Why? Locked down, don’t go to office, can’t meet friends, every day the same so why do I need to wear anything but what I wore yesterday? If I do shop for clothes online, it is not for wardrobe-building but to keep my sanity.


WFH, which was the only way to continue business activities during the Pandemic, furthered this casual attitude toward clothing. When you are working alone, and there is nobody to watch you, see you, and whom you want to impress, the same old PJs, hoodie or t-shirt will do. 


Even if you had the impulse to make a purchase of any sort during the Pandemic, you did it online. The Economist reported in January on a study by Mckinsey from May 2020 which claimed online business in the US had “ten years’ growth in 3 months.” Everybody who could, did switch over to e-business, even doctors. 


Online shopping, which hovered at about 15% of retail sales in 2019 and early 2020, went from “important” to “default.” Will this kneejerk of shopping online first last long after the Pandemic has subsided? Economist reported in the same piece that 75-83% of US customers intended to continue the same behavior, joined by 72-81% in China, and the same range in other industrialized countries like Italy and Japan. 


Does that mean that, even after all clear is sounded, customers will continue their self-isolation and complete their shopping alone? Answer: No. 


The Economist report wonders what the “snap-back” effect will be. 


First let me get one thing out of the way: Customers, whether for the fashion industry or other shopping, will never go back 100% to what they did before. This disease made its mark, among many other things, on the shopping habits of humanity.


Before we predict what will happen in the Fashion Industry, we should predict human behavior Post-Pandemic and what will and won’t change; what will change, how will it change and how extensively? As this is a critical issue for marketing, I have spent a lot of time since last Spring discussing this topic with my students; my opinion formed around what I thought was going to happen, their input and what they said they personally would do. That was the most enlightening part of the discussion: We may not be able to predict what the market will do with any degree of certainty, but we can be damn sure, after a year of isolation, what we will do as customers. 


Oh, one more thing: all predictions are made on the premise that we don’t NEED clothes. There is enough in most people’s closets to be sure they are not fig-leaf naked. 


The affective driving force behind people’s fashion decisions Post-Pandemic is: everyone I have talked to, students in the US, Europe and Asia, as well as peers here, is passionately longing for interaction; with friends, family, and anyone who passes the screen test. More, being in a controlled public environment and feeling the energy of people together is rejuvenating to the spirit. One article in Economist February points to the fact that humans need touch for emotional satisfaction. So, as with PTSD, the shock of deprivation of interaction, and even touch, produces a desire and hunger that are unprecedentedly intense. Hold me…


Some of the questions I asked, specifically regarding fashion purchases:


1. Will you shop online or physical after “all clear” is given? Answer: due to the scar of the Pandemic, wandering in a store is not as attractive as it used to be, but, for the fashion business, which is high-touch, benefitting by touching, feeling, trying on and appreciating yourself in a three-way mirror, physical is preferred, and this experience will be refreshed with new vigor and satisfaction. What is better than seeing yourself in a mirror with a new outfit and someone, your family, friend, salesperson says, “You look Marvelous, Darling?”


2. Will you buy new clothes or just touch up your old wardrobe? (Remembering the economic uncertainty) Answer: It is unanimous, in my questioning, that people will buy new clothes. 


3. Will your clothes be of the same, casual nature that you got used to at home? Answer. NO. One student said that she hated her clothes which she had to wear for the last year and intended to throw them out, and with them the memories. Everyone I polled said something like the following:

a. I will dress up more, because I want to feel good and look good like never before.

b. my clothing worn to work will reflect my desire for self-respect and recognition, which is hard to come by with WFH.

c. I may build a multi-layered wardrobe—home, casual, out to dinner, work in office.

d. I will NOT look for fast, disposable, cookie-cutter fashion, but quality, individual clothes I can be proud of and wear for a longer time (practicality comes in here), even if I have to pay more.


4. How much will you spend and what will you add to your wardrobe? Answer: New clothes that make me feel good; as many as it takes. And no matter bought online, physical or omnichannel. Let me out to shop! Nobody that I questioned brought up any financial constraints. Even if they exist, which I am sure they do, they are not the driving force. They never ever said that they would only buy a few pieces to supplement what they have. Almost all envisioned a “new look.”


5. The most impressive comments-about COLOR. Everyone, men and women, pointed out without any prompting that they would seek out clothing with bright colors to reflect the light (as brights do) in their mood and the receptivity for new contact.


I have read comments from industry folks about a new “Roaring 20’s” for the Fashion Industry. That may be an exaggeration, but I do see some opportunities that have not existed in the industry for a while:


1. The Fashion Industry could be a source of personal stimulation and fulfillment as clothing becomes more central to people’s lives and self-assessment. When bell bottom jeans were the rage in the 1970’s, you felt great about yourself if you could prance around in the latest pair, and pretty ragged if you didn’t or couldn’t. This has not been the case in a very long time, even before the Pandemic.

2. The fashion industry, which has been in the Denim Era since Reagan was president, may begin to successfully create some new trends. This, of course, will drive business of those who recognize the trends and those who create the trends. And, they could revive businesses that have been dormant- such as dress shirts. Trends are the healthiest probiotic for the fashion industry. In 1947, when Dior introduced his New Look after a fashion hiatus for WWII, it led the trends for fashion well into the 1960’s. Wouldn’t it be exciting if history repeated itself? Will we all be wearing shirts, ties, hats and cinch-waist A-line dresses? 

3. The most exciting news is that, in the past, when fashion in the US was at its heyday, it was spread by local and national media (such as TV) and had limited reach due to technological limitations. Today, global platforms can spread the word and the product literally everywhere, 365, 24/7. Global reach, global trends.


I am not sure of the magnitude of the outcome. What I am 100% sure of, from my own experience and research, is that people’s desire for company, interaction and hugs is intense and passionate. Humans are social animals, who have been kept in a cage for about a year. Like birds, they will value their plumage as a component of their self-esteem. 


Once released, people all over the world are going to be ultra-attentive to what they are wearing and spend what they need to be fulfilled. Release them and see what happens.


My biggest worry is that companies in the fashion industry will miss the opportunities for whatever reason and not properly prepare what customers want. The biggest crime in the fashion industry Post-Pandemic will be: boredom.


Tuesday, December 29, 2020

Ecommerce “Great Leap Forward:” What Will Be the Impact on The Fashion Industry in 2021 and Beyond?

 




Well, we all know what happened in 2020; we went to ground and tried to live our lives at the same time. What did we have to do to survive? And what could we not do anymore?


No more restaurants and bars; sporting events; shopping at the store (we even may have had groceries delivered); events, concerts, just being with friends; in-person classes. Oh, and going to the office; WFH became as much a part of our vocabulary as WTF.

And it was (the latter).


But, in 2020 as compared to prior crises, ecommerce was developed to a point where it could take up at least some of the retail slack, if not most of it. Maybe it wasn’t as fun or romantic to make a daily Amazon run as it was before to run to the store or the mall, but it saved us. Zoom and other meeting platforms became our default method of communication for business, personal and teaching; sometime during 2020 Zoom became a verb-let’s Zoom tomorrow.


The effect was astounding. Could we say it was the “white swan in a black sea?” Ecommerce, remote learning, an online meeting were increasing anyway, but what happened took everyone’s breath away. The Economist magazine, in their “The World in 2021” issue, called it “The Tech-Celeration.” The article quotes McKinsey as saying “Recent data show that we have vaulted five years forward in consumer and business digital adoption in a matter of around eight weeks.” In the US, ten years’ growth in three months. In Italy, it reports, it was a “ten-year revolutionary leap.”  Yes, ecommerce was steadily growing before, but now, badabing, it gets a new name—Default.


Further, the same article points out the changes in banking and education, citing cashless transactions and remote learning. I can report, as an instructor, that in March 2020 we had to transition to remote learning literally overnight. We got through it, but it was clumsy at best. After myriad articles and meetings (on Zoom and other platforms), we all got some idea of what it took to improve the learning when your students are little squares who may or may not choose to reveal themselves visually. Whereas there is no doubt that both students and instructors would prefer the face-to-face mode (unanimous sentiment when students are polled at the end of semester), we learned somethings that will be valuable in the future, such as: 1. Lectures are boring, I don’t care who you are-much less “sage on the stage;” 2. Students can be engaged most effectively by letting them express themselves through assignments that are knowledge plus opinion-based; 3. The time saved by not commuting can be put to good use.


The same Economist article states that executives they polled were definitely willing to allow more of their employees to WFH permanently. Particularly in the growing technology sector, it reports that 34% of executives, up from 22% the prior year, were willing to allow at least a tenth of their employees to work from home two or more days per week.  We have yet to see what, other than lowered commuting and building costs, comes as a positive when that becomes reality. Does a Zoom meeting have the same impact as a face-to-face meeting? Well, let’s see… You can’t mute the speaker when you are in the same room; and you must at least pretend to be paying attention. As with remote classes, engagement is the biggest challenge. For the workplace,  reduction in takeaways, reaction time, enthusiasm and morale can be business-changing. 


While consumers were able to find almost all of what they needed or wanted to buy online, what they didn’t need or want was apparel and accessories. Early on in the pandemic, I tried to convince myself and others that your attitude toward work or meetings would be affected by your dress. If you dressed smartly, you would work smartly; if you dressed sloppily or casually, it would reflect in your productivity and results. As an instructor, I cannot tell students what to wear or where to sit; as a supervisor, I sure could—if I weren’t guilty of the same lackadaisical habits myself. That said, I believed and still believe my presumption was correct. 


What happened to apparel in 2020? The above Statista graph demonstrates the precipitous drop even better than the numbers:


Per the graph above, clothing store sales hid their nadir in April 2020 of $2194 million, against $21,416 million in April 2019. It doesn’t get much worse than that. Headline-making bankruptcies abounded as a result of this trend and the inability to physically shop (clothing is a high-touch attribute item, and I don’t care how good online shopping is, buying a new shirt or dress online just is not as good, and MUCH easier to walk away from).


What, then, happens to the fashion industry, in particular Womenswear, which has traditionally been the volume leader (also remember women may buy clothes for men as well)? Do people just buy more t-shirts and sweatpants? More structured and function-oriented clothing like suits, dresses, sportscoats, ties etc. go the way of the dinosaurs? When today’s parents become grandparents and show their grandchildren old pictures, do they get asked, “did people really dress like that?”


As with the acceleration of ecommerce due to the Pandemic, other trends will continue to accelerate-even if the trends themselves are decelerating. One clear example relevant to the fashion industry that was well under way before the Pandemic hit was-dressing up. When you watch TV series that were shot in the 50’s or 60’s of last century, you can see everyone dressed up prim and proper-suits, shirts, ties, dresses, hats. That trend had been casualized long ago- for better or worse- and now? Will anyone ever agree to wear a shirt and tie to the office? Or anywhere? Again, I will ask you to consider how that casualization affected people’s attitude toward work, for better or worse, even before the pandemic (I can’t accept “no effect” as an answer because you know it isn’t the case)?


Wait, it gets worse for the fashion industry. Fashion business was always best when there was a trend or mood in the country which got people excited to buy more clothes; it is rare that people buy clothes because they really need them. Now, how to popularize a fashion trend? I don’t care how good your image is, clothing needs to be seen in person, touched, felt, tried on. Yes, you can do it after receiving it and return it if you don’t like it; but, by then, the thrill is gone. And, where you could try on 20 items in a few minutes, can you do that now? No. Not even if you get a cute little subscription box that some AI made up for you. Not even Alexa can do that yet—if ever.


So, what’s the hope for the fashion industry? Whatever it is, it is going to be a long road back. Clothing purchased in the future will have to distinguish itself clearly from others- fabric, color, sustainability- to be added to a wardrobe when it isn’t needed. Children who eventually attend school in person will need clothing. As will people who have to go back to the office, for at least part of the week. That said, something bought because you have to carries less weight and volume than, “I love it.” Pockets of consumers, especially Gen Z, will still shop for distinctive items that fit their requirement; but the general public will need a lot more stimulation to get even close to resuming OR restructuring their former habits.


The best hope for the fashion industry is-human nature. What provides the best chance for rebirth of the industry is the fact that, once allowed, human beings will crave personal contact and appreciate it more than before. People who have been sequestered with Zoom meetings will want to have a laugh with someone less than social distance from them. Human beings have been gathering since time immemorial and no Pandemic is going to change that. Will that result in a resurgence of the fashion industry to former volume levels? It could, after a while, but that, I am sure, will be largely populated by people buying fewer, and better apparel and accessories; as well,  purchases will be affected more than ever by brand image and social criteria. Does this mean nobody will buy no-name, disposable clothing anymore? Of course not, but the proportion of total fashion purchases will change drastically- hopefully for the better. 


Sorry, Zara. 


Happy 2021! Here’s to a better world with everyone holding hands, appreciating each other, no matter who or where they are, what their nationality or anything else about them is, and all participating to be a better they. 


12/29/2020

 Footnotes: 

Statista.com, “US Retail: Monthly Clothing Store Statistics, 2017-2020, https://www.statista.com/topics/965/apparel-market-in-the-us/

  The Economist Magazine December 2020, “The World in 2021 Issue;” Tom Standage, “After the Tech-Celeration”

  Ibid.


The Package That Cried

 The following is dedicated to the US Postal Service, who really made people nervous but ended up delivering:

I am a delicate package

Of a delicate painting

Of a delicate little girl.


I hoped to fly swiftly

To the little girl’s home

In time for Christmas.

No! I was crushed for days

Among heavy and bulky

And rude packages of

Food processors

Pots and Pans

Microwaves.


Can’t anybody read?

The sticker on my outside says

“Fragile”

And I am.


Sitting, crushed

In a bag

In a warehouse

On a truck

In another warehouse

On another truck

I began to think

Is this the end?

Will I end my existence

Here among these rude boys

Not with the child?

So I cried

And cried

And sobbed

What else could I do?





Friday, November 27, 2020

It's Jerky to Eat Turkey- a Poem by Michael Serwetz



(Occasionally, I do feel the urge to write poetry. Enjoy your turkey leftovers with this one)





It’s Jerky to Eat Turkey


It’s jerky to eat Turkey

For a whole entire week,

One day after the next,

Endless bones and meat.

I thought dinosaurs were extinct?


The turkey agrees:

“I eat this and that, 

Huge and all over the joint;

Only, I am so, so fat

I can barely walk—Wait--

Now, I get the point!”


Preparing a turkey

Is like running a country

The whole is so, so big

But it’s the parts that count.

So break down and break it down,

Then you won’t feel jerky

To eat Turkey. 

Wednesday, November 25, 2020

China-US Relations; Clean the Stain and Move Forward

 


China-US Relations; Clean the Stain and Move Forward


Since the Pandemic began, literally thousands of cases of harassment, or worse, of Chinese and Chinese-Americans have been reported, despite the fact that, even if the virus did originate in China, those living in NY and other US cities had nothing to do with it, and are suffering the same dangers as non-Chinese. Unfortunately, this prejudice was sanctioned and even promoted by the White House (repeatedly). This is a stain on our democracy, but unfortunately not a new one.


Don’t think that institutionalized prejudice against Chinese began with Trump. It goes back nearly 150 years to the Chinese Exclusion Act, signed into law in 1882 and only repealed in 1943, which prohibited Chinese immigration into the US. The Page Act, signed into law in 1875, specifically targeted Chinese women. (Wikipedia)


In 1876, Mark Twain and Bret Harte collaborated on a play entitled, “Ah Sin” which told the story of a Chinese immigrant in the mining camp who learns from his Irish opponents how to cheat at cards better than them, and the punishment he suffers for doing what they do routinely. The play was intended to depict the hypocritical attitude of white Americans toward Chinese Immigrants; unfortunately, it had exactly the opposite effect. The play was not well received, and people took its meaning to be critical of Chinese Immigration.


Fast forward. We should first answer the question, “Wouldn’t the entire planet be better off with a productive relationship between the two great powers who have a dominant effect on world politics and economy?” My answer is, “Yes.”


I think we can also agree that whatever prejudice exists, it should not be the White House’ role to promote it. If you believe in Lead by Example, that ain’t it.


So, what do we do now, with a new Administration less than two months away?


Thus far, I have seen nothing but what I believe are wrong-footed strategies, even from those who should know.  One example is (with all due respect to my favorite mag) The Economist magazine, which, in the Leaders section of its November 21-27 issue, ran a piece entitled, “The China Strategy America Needs.”  The subtitle is, “As President, Joe Biden should aim to strike a grand bargain with America’s democratic allies.”


For several reasons, I don’t agree with this approach. Main reasons:

1. Democratic is not the issue. A functional one-party government is better than a dysfunctional two-party one. ‘Nuf said;

2. Even if we strike this “bargain,” what are the chances that our weaker allies will stand up to pressure, especially those in Asia who may even share a border with China?

3. It has been repeatedly shown in the past that China is sensitive, even a bit paranoid, about being “surrounded.” Isn’t this one key to why Mao agreed to the Shanghai Communique with Nixon and Kissinger in 1972? So how exactly does that solve the problem? China is supposed to say omigod, I should give in and do anything this group wants? History tells us this will never happen.


I am not just being a smartass here; I have studied, done business with, lived and taught in China for several decades, so I have a lot of empirical background for my disagreement. What do I think we should do?


1. Give up the democracy condition. China is not and never will be a democracy like the US (especially after the example we have provided for the world recently), and, BTW, it no longer fits the Communist profile, and BTW, our human rights record is not sparkling clean.

2. Focus on mutual economic benefit. There is no doubt that both countries have a huge amount to gain from a better business relationship.

3. Give up the “surround China” strategy. Sun Tzu, in his Art of War, states “Win All Without Fighting” as one of his main principles. What is to be gained by a costly war of attrition, by the US or its allies? We should be the leader of a successful effort, not a debilitating battle.

4. Talk to China directly, honestly and with respect for both our and their requirements; set the final objectives, and ground rules toward them. 

5. ALL politics is culturally-based. Make understanding their culture, and our own, good and bad, as a prerequisite for negotiations, with equal respect for both. 


We need to clean our glasses and see both sides clearly. My book,Travels with Mikey: Business Life of a Global Foodie” soon to be available, will chronicle my half century of immersion in global business from a cultural point of view (yes, food is the focal point of every culture).


For now, I have little impact on stain removal. Those in power do, and, even with their best efforts, it will take a lot of time and effort to remove it. Prejudice against Chinese and other minorities is ingrained into our culture, and we cannot take our rightful leadership position in the world unless we recognize and eliminate it from influencing our attitudes and thus, our policy.

Here's another wonderful quote from Grace Lee Boggs:





Tuesday, October 20, 2020

Blockchain for Supply Chains 2020: Will this ever work for the Fashion Industries?




 In April of 2018, after some rapturous reading about Blockchain, and with stars in my eyes as to its potential for the Fashion Industries, I wrote an article reflecting my usual optimism for disruptive and innovative solutions: “Blockchain for Supply Chains: A single, immutable truth for our future” which I reposted on my blog www.isourcerer.com . I continue to believe that digitization is a needed solution for the fashion industries; and that we can only hope to realize that solution by first recognizing and admitting where we are in the process today.


Two and a half years later, Blockchain is apparently a renewed opportunity for tech companies to peddle their wares based on the US crackdown on supply chains in China’s Xinjiang Province that (are proven) to employ forced labor.


I recently attended some presentations about technology in the Fashion Industries at which the companies who spoke took the attitude that digitization of the fashion industry was as easy as “getting on to the Internet.” 


I was taken aback by this type of statement. I thought back to my article and wondered, “Have we made such dramatic progress in digitization during the last 30 months? Did I totally miss it?”


After some research and reflection, I believe that the same problems that existed then exist now, and statements like the above by tech companies are, in the least, misleading.


What are the obstacles and problems for digitization of fashion and like industries (such as accessories, home textiles, lower priced kitchen ware) to achieve digitization of the ENTIRE supply chain (which would be necessary for Blockchain to be a fully effective solution)?


1. Supply chains are Analog and Too Big- Even if the final manufacturer of the exported product has the capability to digitize their factory (not likely without major investment in equipment and systems), their supply chains are overwhelmingly analog. The Xinjiang cotton issue is a good example: Even if the fabric mill is proven to not use forced labor, what about the final shipper of the cotton yarn? what about the dyer? The spinner? The cotton broker? The cotton producer? Most important, do any of these have the capability or the willingness to install technology that will not only allow them to report their sources and control their supply chains? If so, does their downstream also have the way and the will?


Let’s take a look at a typical apparel product. In this case, a cotton yarn-dye shirt, made in China, where all the suppliers of the final producer factory are somewhere in China (the situation is more complicated if some parts have to be imported). Let’s list directly product-related ones:

1. Yarn-dyed fabric from the fabric mill. Take into consideration the suppliers of the mill:

a. Raw cotton supplier;

b. Yarn spinner (if not same mill)

c. Yarn dyer (if not same mill)

i. Dye stuffs supplier

ii. Other chemicals supplier

iii. Finishing Chemicals supplier

d. Weaving mill (if not same)

e. Packing materials for finished fabric

(This is just the fabric)

2. Thread

3. Buttons

4. Interlining

5. Collar stay

6. Seam tape

7. Logos or labels

8. Packing materials:

a. Collar band

b. I board

c. Paper under collar band

d. Pins

e. Tissue

f. Plastic bags

g. Clips

h. Tags ie, UPC, brand, store

i. Swiftachs for tags

j. Butterfly clip

9. Packaging materials:

a. Inner cartons

b. Outer cartons

c. Carton tape

d. Carton labels


Did you count? How, in any shape or form, is this “easy” to track with Blockchain? Do you exempt some products from tracking? If so, which ones and how does that stand up to the principle of traceability?



The truth is, that even most of the final producers of the exported article don’t have this technology installed, and how many are willing to spend the money to do so? Most factories I have worked with, for example, keep their fabric receipts and inventories in a notebook. 


These factories also know that their supply chains are far from digitization. And that their supply chains have too many elements to control effectively.

For example, a typical yarn dye shirt has 14-15 materials and findings to produce the final article; and those suppliers have their own list of suppliers.


(Note: The above does not matter which country it is imported from. All have to make the same shirt. What does matter is that certain countries will have to import some materials from other countries, which makes the process even more difficult.)


So, we expect buyers, small or large, to mandate their suppliers to control all of this via digitization? And to have accurate information for presentation when needed?


2. Especially in today’s world, who is willing to invest the money and disruption that such a conversion will require?

Factories? Who are experiencing drastic reductions in their business and buyers cancelling or refusing to take orders already finished?

The Factories’ Suppliers? Who are also affected by the above circumstances, and who would generally have more work to do in controlling their supply chains.

The Suppliers’ Suppliers?

The Buyers? Certainly, if you are a small to medium size buyer, you cannot change the supply chain world. Saying that you could find suppliers who had achieved or had potential to achieve digitization, how much more would you have to pay?

Large Buyers? Are they willing to spend the multiple millions it would take to solve potential ethical issues, or even to streamline their supply chains? They would be on the hook for subsidizing the entire downstream?


So we have can’t and maybe won’t facing us as obstacles to digitization of the supply chains. NOT “as easy as connecting to the Internet” by a long stretch. And stretch are what those claims are.


3. Who is willing to lead by example? If digitization, as sustainability, is a worthwhile goal in the medium to long term, which of the major retailers or brands is willing to step up to the plate? Make no mistake about it, as I said in 2018, this is what it is going to take to get digitization off the schneid (starting point).

4. There are more important things to worry about in the fashion industries, like why people aren’t buying clothes.


This is still a worthwhile goal. As is sustainability. But until something happens that will get them moving, they will be just talk or, at best, small efforts with big talk.


My conclusion is that we are basically at the same point in digitization of supply chains in low-tech industries as we were two and a half years ago. At the starting gate with an honorable goal. And, more than likely, we will never get to the point of complete digitization. IF, in fact, we even should spend time and money on it.


In every industry, there are leaders. Leaders need to lead. Sometimes, however, leadership requires taking money out of your pockets. So, let’s see some of the industry giants lead by example first; spend some of your profits or C-Suite compensation on something worthwhile..


Until that time, I urge you all to look at the reality of digitization today. Those of us who have traveled the world of sourcing know what that is. For those who haven’t, don’t buy sales pitches at face value.


Monday, September 21, 2020

Sustainability, the Fashion Industry and Cow Farts: Is That All There Is?




You try. I Googled “Sustainability efforts” and a few variations of that search term. What I did get back was a very interesting article about how Burger King has introduced lemongrass to its cows’ diet, which will make their intake easier to digest, resulting in fewer cow farts, which in turn results in less harmful methane gas in the environment. 


What I didn’t get was any articles on page 1 (or 2 or 3) from the search results referring to efforts made by apparel or textile brands or retailers.


When I added “Major Apparel Companies” to my search, I did get some news about companies you would recognize like Adidas, H&M, Burberry detailing some sustainable products or events that are geared to warm your heart about sustainability. 


Sorry to say, for me it didn’t do much. Sustainability in apparel is not a small matter; with the millions of tons of apparel that are purchased—and thrown away—every year, a style here or there does not solve the problem. 


Who Can Make a Real Difference?

Further, the apparel industry volume is dominated by a few huge companies. Therefore, it stands to reason that, even if thousands of small companies made huge efforts to totally or overwhelmingly cleanse their lines of products that were not sustainable, it would make little impact, at least in the short term; one article in Business of Society, for example, said that “The top 20 companies in the clothing industry, mostly in the luxury segment, account for 97% of its economic profit (McKinsey, 2019).”


So, it stands to reason that, without major, tangible and measurable efforts by these big companies, sustainability is going nowhere. If companies, driven by profits and overwhelmingly answerable for those, are corporately giving lip service to sustainability to placate customers, or trying to answer the sustainability call while also satisfying the CFO, Board and shareholders, no measurable progress will ever be made. 


Does anyone care?

Clearly, today’s customers are very interested in sustainability and are willing to put their money where their mouth is. The same report in Business of Society claims:

94% of Gen Zers believe that companies should address social and environmental issues (Cone, 2017). 

Gen Z alone will account for 40 percent of global consumers by 2020. (McKinsey, 2019)

90% of Millennials would boycott or otherwise refuse to buy from a company that is doing harm (Cone, 2017)

Consumers want to support brands that are doing good in the world, with 66 percent willing to pay more for sustainable goods (McKinsey, 2019). (Business of Society)


The above speaks to their motivation to buy clothes. If clothes are seen as a negative influence, or just not a positive one, there is no urgency to buy. Spend your money on something else.


How do you Measure Sustainability?

So how to hold major companies accountable and show customers whether they are really making substantial efforts toward sustainability? I am pretty sure Burger King has already devised some sort of fartmeter to measure the efforts of the cows’ diet change (I really want to taste a Whopper fed with lemongrass!). What can the apparel industry do?


Metrics have been developed to measure sustainability efforts, but I feel they are too obtuse to clearly measure all of the efforts that could possibly be made on a major scale by major clothing companies:

The TBL, or Triple Bottom Line, put forth by John Elkington in the 1990s, seeks to add environmental and social dimensions to financial reporting. As the researchers at Indiana University stated,” The trick isn’t defining TBL. The trick is measuring it.”

The Sustainable Apparel Coalition (a very well-meaning organization with precious little clout) has developed the HIgg Index, which seeks to measure sustainability efforts in each segment of the apparel process, from design through delivery. Again, well meaning, but can you imagine VF or PVH paying for the technological changes to measure what are sometimes vague steps from the beginning to the end of their supply chains?


What I propose next is that the industry leaders be mandated by customers to develop some metrics that can be easily understood and followed, which will be required for financial and business reporting on a quarterly and annual basis (AKA CSR?), such as:

Amount spent on sustainability efforts, to be specifically detailed;

Cost of measures taken to reduce waste and environmental damage in processing, packing, packaging and shipping; again, specifically detailed and defined;

Average lifecycle of garments based on testing, compared to previous periods;

Number and weight of garments recycled per period, regardless of original brand.


It will take better accountants than me to clarify and quantify these types of measurement, but guess what? These large companies all have them; and if they don’t, they have the money to hire some. The major question is, again, will they spend the money to institute these measures? And the more important question is, will they actually DO something that shows up in the measures?


Easy, Do Now Steps to Radical Improvement.


To ease the path, I would suggest some simple and straightforward measures that could be taken, such as:

Say NO to plastics and synthetics, as in ALL of them. As stated in the article, “Sustainability Trends that will Shape the 2020’s”, EcoEnclose suggests, ”Changes to our relationship with Plastic”. Yes, as in NONE. The damage done by plastic and synthetics to the environment is incalculable. From packing, packaging to microparticles in the laundry water, it is easy to eliminate or change everything NOW. For example, no plastic bags on garments or in packaging; no plastic bags in shipping to customers. NONE. What is stopping you other than the bottom line? Can any of the large apparel companies tell us that this is a BAD MOVE?

Follow this guide in every stage and product of the supply chain. This logic should be carried to the entire product: buttons, thread, the fabric itself can be sustainable. NOW.

Be Investment Dressing; make better quality, easy-care garments. As we did from the outset at Lotus & Michael- The Art of Shirts-- make quality garments that will last longer, that require cold washing and NO drying. As the writer of the BOS article quoted earlier said, 

o “I am often asked what one can do as an individual to be more sustainable when it comes to fashion.  My answer is in two main parts.  First, buy fewer, better quality items and wear them for longer.  Classic, good quality pieces will wear better and last longer.  Even if they cost a bit more at purchase their extended life makes them a more affordable option in the long run.  Second, re-think how you care for your clothes.  Washing them less, at lower temperatures, and hanging them to dry will all result in gains for both your energy bill, as well as the environment, estimated at a 3% carbon reduction (WRAP, 2017).  “


Start a Recycling program- NOW. Every garment made and shipped to customers should be clearly marked as to how it can be returned for recycling- permanently and next to the care label.


Communicate with your customers. Let them know what you are doing and make them into supporters and fans. There is no doubt that, if they are fans of your efforts, they will:

o Spend more on their clothes;

o Buy more garments (if you make them interesting);

o Become brand ambassadors, telling their friends, colleagues etc. by WOM or Social Media.

o Tell you what they like and don’t like, as well as give you suggestions, so the relationship feels two-way. 99% of Brands today talk AT their customers, not TO.

o Only the customer can be the driver of these efforts. Without significant pressure on their sales, companies will not make significant changes.


I understand.

That moving big companies is a bit like turning the Titanic. While there is a lot to do even to execute simple steps like I have proposed above, the Power of the Ship will be awesome once the turn is made.


And, if Leadership sets and implements priorities of action that maybe leaves the Finance guys grumbling, I believe it could happen surprisingly fast.


Let’s leave it at, in this case, something is not better than nothing. Everything is better than something. We need measurable, significant action, not a style here or there. 

 

Wednesday, September 16, 2020

REPOST: Sun Tzu's Six Principles- Wait- 2,500 year old strategy still works today? Yes, It does





(This is a repost of an article originally written in July 2019. One Pandemic Later, standing in the graveyard of iconic brands, I believe we should understand that data, while it everyday gains in importance for us, will not give us the answers. STRATEGY comes from the human mind. The below might be good to print and paste on your wall at home or wherever from you are working..)

Timeless, spot on and still studied today, 2500 years later.  Sun Tzu wrote a lot about Strategy and Leadership, but these six principles are the cornerstone of his teachings, and continue to apply to business today.

First, here they are:

1. Win all without fighting
2. Avoid Strength, Attack Weakness
3. Deception and Foreknowledge
4. Speed and Preparation
5. Shape your Opponent
6. Character-based Leadership

Now, let's look at their application in today's business world:

Principle 1- Win all without fighting
1. Gain business and/or market share without:
1. Spending large sums on gaining that share-eg., advertising; advertise cleverly and use social media for your advantage;
2. Compromising your product by reducing price and/or quality
3. Do not use price as a strategy- fashion merchandising which makes your offering special will get you an advantage (Inditex)
4. Analyze costs of growth- more business does not necessarily mean more spend (Think Big, Be Small)

Principle 2- Avoid Strength, Attack Weakness
1. Find your Market NICHE- what separates you from your competition?
2. Don’t try to COPY dominant product- IMPROVE or REINVENT it;
3. Find a customer who has not been served or served properly;
4. Find a new Geography- eg., urban vs. rural
5. Fill a need- eg., Untuckit
6. Incumbents have more money than you so do not compete head on;
7. Incumbents may not have the will to enter a new market segment-it will cost you less to start up than it will them.

Principle 3- Deception and Foreknowledge
1. THOROUGHLY research and know your market, your customer- what they have, what they need, what their shopping habits and fashion choices (Untuckit);
2. Never stop research and discovery-even for a day;
3. Use all available resources provided by technology (AI, CDP, Social media);
4. Always be first-do something new every day
5. There is no limit on disruption (Amazon)
6. Keep your competition guessing;
7. Know your capabilities- don’t bite off more than you can chew;
8. FOCUS on what you do best;
9. Have better fashion insight than your competitors- hire the team that can see the future.

Principle 4- Speed and Preparation
1. Speed to Market- be faster better cheaper (maybe)
2. Gather the best information available
3. Never give yourself too much credit for what you did yesterday;
4. Prepare your offering with Common Sense;
5. Use the best technology available for information and customer service;
6. Have better and faster service than your competitor;
7. TALK to your customer;
8. Be decisive- sometimes you will fail, but not if you don’t try;
9. Shorten your design/delivery cycle;
10. Think It Through.

Principle 5- Shape Your Opponent
1. Make your competitors chase you- not the opposite- make them play in YOUR sandbox;
2. Second is last- be FIRST
3. Update/change/grow your offering faster than the competition (Apple)
4. Your fashion and product/brand image should be an EXAMPLE your competitors want to follow;
5. Your offering must be simple, accessible, easy to understand and buy.

Principle 6- Character-based Leadership
1. Hire PEOPLE, not RESUMES;
2. Hire by CHARACTER fit, with at least the following characteristics:
1. Courage
2. Will to Succeed and Win
3. Intelligence
4. Loyalty
5. Likability
3. A leader will only succeed with a strong TEAM whose skills complement each other;
4. Build Great Captains, whose character and skills will help you as you grow;
5. Challenge to change and react, never sit;
6. Original Thinking-the Fashion Industry is build on CHANGE;
7. Open- Minded Management
8. Humility- Never get too impressed with yourself;
9. Lead By Example-all the above won’t work if it is not part of your style.

Sounds simple, right? How many of you business leaders can state with perfect honesty that the above is exactly your management philosophy, style and execution? (I can)

When we attend the funerals of those brands and institutions that have passed on, we can look at the above and always find the causes.

Study it. Learn it. Succeed. Or don't.

 

Saturday, September 5, 2020

CORRECTION: Macy's is NOT "The Asteroid that Killed Retail." Who is?

 CORRECTION: Macy’s is NOT the Asteroid that Killed Retail. Who Is?

 


 

In April of 2018, I wrote the article, “Macy’s: The Asteroid that Killed Retail”  in which I blamed Macy’s (which is now Federated) for changing the face of retail by buying and absorbing 85 distinguished Department and Specialty Stores, some of which had century-old histories, and sanitizing them with the sometimes unknown and unrespected name of Macy’s. Let’s look at the list again, it is as tragic in 2020 as it was when it was done, and in 2018 when I examined it in the above article:

Fast Forward to December 19, 1994. Federated Department Stores “bought” Macy’s (but yet it was Macy’s management that ran the show and still is). Eleven years later, in 2005, Fedmacys bought May Company Stores, completing the hat trick the same year with the purchase of Broadway Stores. By March 2005, All units were converted to Macy’s stores. The other names, their histories, and maybe their loyal followings, were dead.

 

Look at the list of those stores sanitized to be Macy’s (Wikipedia, The Dead Department Stores–you can see the rest of the names in the graveyard here:

 

·      Abraham & Straus (Macy's in 1995)

·      D. M. Read Macy's In 1990

·      Ames (Eastpoint)

·      Bamberger's (Macy's in 1986)

·      The Bon Marché (Macy's in 2005)

·      C.C. Anderson's Golden Rule (The Bon Marché in 1923)

·      The Paris (The Bon Marché in the early 1980s)

·      Barnes-Woodin Co. (Yakima, Washington, The Bon Marché in 1952)

·      Columbia River Mercantile

·      A. M. Jensen's (Walla Walla, Washington, The Bon Marché in 1951)

·      Missoula Mercantile Co. (Missoula, Montana, The Bon Marché in 1981)

·      Montague-McHugh (Bellingham, Washington, The Bon Marché in the 1950s)

·      Runbaugh-Mclain (Everett, Washington, The Bon Marché in 1952)

·      Stone-Fisher Co. (Tacoma, Washington, The Bon Marché in 1952)

·      Russell's (The Bon Marché after World War II)

·      Bullock's (Macy's in 1996)

·      Bullocks Wilshire

·      Burdines (Macy's in 2005)

·      Maas Brothers

·      Carter Hawley Hale Stores (merged into Macy's West 1996)

·      The Broadway (Southern California). Headquartered in Los Angeles.

·      Emporium-Capwell (Northern California)

·      Capwell's (East Bay)

·      The Emporium (San Francisco and South BayNorth Bay)

·      Hale Bros. (San Francisco and Sacramento)

·      Weinstock's (Sacramento and Reno)

·      Davison's (Macy's in 1986)

·      The F & R Lazarus and Co. (Macy's in 2005)

·      Shillito's

·      Rike Kumler Co. (Rike's)

·      William H. Block Co. (Blocks)

·      Joseph Horne Co. (Horne's)

·      Herpolsheimer's

·      Famous-Barr (Macy's in 2006)

·      William Barr Dry Goods Co.

·      The Famous Clothing Store

·      Filene's (Macy's in 2006)

·      Filene's Basement (separated from Filene's in 1988, closed in 2011)

·      G. Fox & Co.

·      B. Peck & Co. (sold to Gamble-Skogmo, Inc.)[1]

·      Steiger's

·      Foley's (Macy's in 2006)

·      May-Daniels & Fisher

·      Daniels & Fisher

·      May Company Denver

·      The Denver Dry Goods Company

·      Z.L. White

·      Sanger-Harris

·      A. Harris

·      Sanger Brothers

·      Gold Circle (discount store chain) Founded in 1967 by Federated; merged into Richway in 1988 and later dismantled during 1990 bankruptcy

·      Gold Triangle (discount store chain for electronics, appliances, home building supply, sporting goods, photography, housewares) Founded in 1970 - closed in 1981, 6 Florida locations - 3 Miami, Plantation, Tampa and Orlando.

·      Goldwater's

·      Goldsmith's Merged into Rich's in mid-1980s. (Macy's in 2005)

·      Hecht's (Macy's in 2006)

·      Castner Knott (Hecht's in 1998)

·      Miller & Rhoads (Hecht's in 1990)

·      Strawbridge's (Macy's in 2006)

·      Thalhimers (Hecht's in 1990)

·      Woodward & Lothrop

·      I. Magnin, owned by Federated 1965-1988 and R.H. Macy Co. 1988-1994; most stores closed 1988-1993, remainder of stores converted to Macy's West and Bullock's or sold to Saks Fifth AvenueUnion Square, San Francisco location eventually incorporated into adjacent Macy's.

·      John Wanamaker or Wanamaker's (Philadelphia and New York City flagship stores), sold to Carter Hawley Hale in 1979, then Washington DC-based Woodward & Lothrop owned by Alfred Taubman; sold to May Company in 1995; merged with Federated Department Stores in 2005 (now known as Macy's, Inc.)

·      The Jones Store (Macy's in 2006)

·      Jordan Marsh (Macy's in 1996)

·      Kaufmann's (Offices merged with Filene's in 2002, Macy's in 2006)

·      May Company Ohio

·      O'Neil's (department store)

·      Stark Dry Goods - Canton (department store)

·      Sibley's

·      William Hengerer Co.

·      Strouss-Hirshberg

·      L.S. Ayres (Macy's in 2006)

·      Stewart's

·      H. & S. Pogue Company

·      Wolf and Dessauer

·      Liberty House (Macy's in 2001)

·      Marshall Field's (Macy's in 2006)

·      Dayton's (Marshall Field's in 2001)

·      Frederick & Nelson (defunct in 1992)

·      The Crescent (department store) (defunct in 1992)

·      Lipman's

·      Halle Brothers Co.

·      Hudson's (Marshall Field's in 2001)

·      J.B. Ivey & Co.

·      Meier & Frank (Macy's in 2006)

·      Zions Cooperative Mercantile Institution (Meier & Frank in 2001)

·      O'Connor Moffat & Co., purchased by R.H. Macy in 1945, renamed Macy's in 1947. Their Union Square, San Francisco location is Macy's flagship West Coast store and headquarters of Macy's West.

·      Rich's (Macy's in 2005)

·      Robinsons-May (Macy's in 2006)

·      May Company California (Robinsons-May in 1993)

·      Hamburger's

·      J. W. Robinson's (Robinsons-May in 1993)

·      Steiger's (May in 1994)

·      Stern's (Macy's in 2001)

·      Gertz

 

No matter who you are, and where you lived, this list brings a memory and a tear to your eye.

 

Now I am correcting myself in the attribution of the death of retail. Macy’s Federated did not kill retail as a whole; they hastened the death of Department Store Retail by robbing their identity and the customer loyalty that kept them going for decades.

 

As it turns out, both Federated and Macy’s, before they merged, and many or most of the above names, were on the sick list before they were absorbed. Case in point: Federated was in Chapter 11 bankruptcy 1990-92 and Macy’s was in that state of business since 1992, and still in 1994 when the negotiations were going on. (Washington Post). I guess all that this proves is that two sick people teaming up do not result in one healthy person.

 

That said, the combined brand and buying power of 85 sometimes iconic or legendary department stores could have been leveraged to create an 85-headed monster that could have competed well for the consumer’s dollar.

 

So Macy’s/Federated didn’t kill retail; they killed Department Store retail. Any chance these hometown units had to compete was erased when they all had to be named Macy’s. That tragic decision goes down in history as one of the most wrong-headed and arrogant decisions in the history of American Retail.

 

What was the disease that made these hometown stores sick in the first place? Same as the fate that befell millions of local stores in rural America. This disease is named Wal-Mart (now Walmart).

 

Then, as time went by, Walmart was joined by a second company named Amazon.

 

My corrected conclusion is that Macy’s was not the Asteroid that Killed Retail- it was one of the dinosaurs that died a slow death due to inability to evolve. IN fact, America was hit by two deadly asteroids: First Walmart, then Amazon. The two together changed the entire retail value proposition for American consumers.


And Macy’s, instead of playing on reputation and loyalty, tried to play in that sandbox. So did many others who have faced the same fate recently.

 

Let’s first look at some numbers which illustrate my point:

 

ANNUAL REVENUE ($BILLIONS)

Date

1994-95

1999

2005

2015

2019

WALMART

82

137.6

281.2

482

519

AMAZON

0

1.64

8.49

107

280.5

COMBINED

82

139.24

289.69

589

799.5

FEDERATED/MACY'S

13

17.7

22.3

27.1

24.5

 

IF we go further back, we can see a day where these department stores, along with others such as Sears and JC Penney, dominated retail. But the fact is, by 1994 when the merger of Federated and Macy’s was agreed, and, coincidentally, the year Amazon got its start, the game was over; American consumers were spending their money elsewhere and department stores became, in the famous words of Perry Mason (and his nemesis Hamilton Burger), “incompetent, irrelevant and immaterial.”

 

So why the hell am I using the term, “killed retail?” Just these two companies are doing a ton of business and making millions of consumers happy every day.

 

The thesis of this article, which I have said many times before, particularly in my article, “Not Understanding the Relationship Between Price and Value Can Be (Is, Was) Lethal”, the price/value proposition in America has been turned on its ear. How Mariana Mazzucato explains it in her great book, “The Value of Everything”(notice the link here is to Amazon:-/):

She says that, previously, the determinants of value actually shaped the price of a good or service. Lately, however, that relationship has gone into reverse and the price of a good is determining its value.

 

There is no doubt that the success of Walmart was and is all about price, and so is Amazon (started by undercutting everyone on books, now is the default site for everything, but still heavily depends on price). So, over the years and more so now, the majority of goods available to Americans fall under this price/value proposition (Walmart and Amazon are not alone; they are joined by Target, TJ Maxx/TJX, Dollar General, Dollar Tree etc. etc.: the lower price I pay, the higher the value to me).

 

This is not the value/price proposition we were raised on in the Department Store era, but it is the overwhelming retail model today. And, when Department Stores as well as Brands like Brooks Brothers abandoned their value proposition in favor of the Walmart/Amazon paradigm, of course they failed.

 

So, this is what I mean by “Killed Retail:” Not one, but two mega-asteroids, Walmart and Amazon, changed not only the face of retail, but murdered what drove retail for the entire 20th Century:

You pay a little more to buy from the store that you are loyal to, because you have trust in them and the product. When I worked at A&S in Brooklyn during the 1970’s, this is what drove our customers. And when we did give them a sale or promotion, they understood the value and feasted on it.

 

What is worst, it is my theory that this change also contributed to the plummeted standard of living in the US (which I have also written about), and poor working conditions in supplier countries worldwide, because cheap product requires cheap labor, cheap materials, and a cheap experience.

 

What can be done about this situation?

 

First, Brands have to have the courage to stick to the real value price of their products, and not fall into the trap of training their customers to wait for a sale;

 

Second, since loyalty to geography (your local store) is dead and gone, new brands have to give customers a reason to buy other than price: Product, Quality, Business Conduct such as Sustainability. IF enough companies do this, it will start to change minds and the Price Guys will be on the defensive.

 

Disrupt the Disruptors.

 

Honestly speaking, you never know what happens in business, but this might take a while. And it might not.

 




 









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