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:


































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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