The outdoor industry’s chances of emerging stronger than ever from the economic crisis are good if brands, manufacturers, dealers and their bankers can agree in coming months how to reapportion risk in a much faster moving, but slower growing economy.
Consensus is building among outdoor brands that they need to move production and wholesale deliveries closer to need. That will involve moving toward a fashion merchandising model of smaller, more frequent production runs. The goal is less inventory risk, less work in progress and less reliance on credit.
Retailers are already moving in this direction, according to consultants, retailers and industry suppliers.
“We’ve seen huge increases in the reorder side of the business,” said Peter O’Neil, VP of sales and marketing for CenterStone Technologies, which provides a B2B platform that allows reps and dealers to view brand’s inventories and place orders 24/7. “Retailers are loving the fact that they can chase inventory and order when they have one left on the rack. They no longer have to have ten on the rack and wait for them sell. That's driving our business.”
The onus appears to be on brands, their manufacturers and suppliers, who will need to negotiate new terms to ensure a smooth transition. Specifically, brands will have to negotiate with manufacturers and suppliers, such as fabric mills, to lower their minimum product runs or they will have to start paying and absorbing surcharges. That’s something that is also starting to happen with more frequency, according to sourcing experts.
Currently, brands that can’t meet minimum order requirements are assessed surcharges. Until now, brands dealt with the minimums by pressuring their dealers to place larger and larger preseason orders and then liquidating any unsold product at the end of season. But retailers began trimming back preseason orders in early 2008 and have since been canceling orders at an unprecedented rate. Traditional liquidation channels, meanwhile, are having difficulty moving surplus goods at traditional margins because department and chain stores are already selling so much apparel and footwear at up to 70% off retail.
Outdoor brands that can’t convince suppliers to reduce minimums will need to pay surcharges or find more willing suppliers willing to handle smaller runs. The latter has also begun to occur.
Longer term, some experts foresee a shift to a more regional production platform with smaller run/quick turn sportswear production for the North American market moving closer to home.
Horny Toad CEO Gordon Seabury said Zara, a vertically integrated global fashion brand owned by Spanish apparel giant Inditex, provides a glimpse of the future. On average, Zara can deliver goods to its European stores within 24 hours of receiving an order. Orders from America and Asia are fulfilled within 48 hours. The company’s designers receive input directly from buyers at more than 500 stores. Highly automated logistics centers ship product twice a week and each delivery includes new items so that stores are constantly refreshing their offer, according to Inditex’s annual report. In 2006, the company’s EBITDA rose 20% to 2.2 billion, or 22.8 percent of sales.
Despite the clamor from retailers for more domestic production, the bulk of manufacturing is likely to remain in Asia, and particularly China. Asian factories have simply gotten too good at what they do and provide too much value for the dollar, sourcing experts say. It's no longer just the labor differential but the work ethic and willingness to go the extra mile that is separating them from U.S. mills, contractors say.
After all, if Chinese factories can serve the quick turn-around times demanded by the ready-to-wear and fashion industries, they can surely meet the needs of the outdoor industry, experts say.
Horny Toad’s Lizard Lounge retail store in Portland is already moving toward this model. To keep things fresh, the store takes deliveries six times a year and remerchandizes every two weeks. It now turns inventory every six weeks, said Seabury.
“The whole industry is built on the old equipment model – stack it to the ceiling and sell it and then mark down whatever does not sell,” said Seabury. “There is tons of inventory stashed in the back tying up working capital. We need to increase frequency of replenishment to drive traffic through the stores. You are still developing product for two major seasons, but you are staging production and deliveries – phasing it to reduce duration of the cash float.”
Lizard Lounge has taught Horny Toad that in this economy more than ever, edgier more innovative product, rather than core product, is what drives retail traffic and sales. “Even if people are spending less,” he said, “you have to give them a reason to spend. “
Showing posts with label organic clothing. Show all posts
Showing posts with label organic clothing. Show all posts
Thursday, May 7, 2009
Monday, March 2, 2009
Retail - How to Get Green Goods Flying Off the Shelves
Major retailers, such as Target, Office Depot and Home Depot, report strong sales in green goods through the recession and studies indicate consumers’ commitment to buying environmentally friendly products has not fallen off.
Yet even as green product sales continue to thrive, industry insiders say, retailers need to tweak their message to emphasize quality and value in addition to the environmental attributes.
“The challenge is promoting the efficacy and innovation of the product, as well as the sustainable elements,” says Neil Stern, senior partner with retail consulting firm McMillanDoolittle in Chicago and author of “Greentailing and Other Revolutions in Retail.” “The message has got to be about value.”
That consumers are continuing to buy items offering a combination of quality and green characteristics bodes well for retailers who've invested time, money and inventory in private label green brands and other green product lines. The 2008 Good Purpose survey from public relations firm Edelman overwhelmingly shows that buyers plan to remain loyal to products that they perceive to have strong social value.
According to survey results, 68 percent of consumers say that even in a recession they would remain faithful to a brand if it supports a good cause; nearly seven in 10 would be prepared to pay more for eco-friendly products.
The results don’t surprise Ron Jarvis, vice president of environmental innovation for Atlanta-based Home Depot. While sales are down overall at Home Depot, its Eco Options label of energy efficient products are outperforming conventional merchandise sales across the board. “We are seeing continued interest in socially conscious products in our stores,” he says. “American consumers still want choices that have less of an impact on the environment.”
Jarvis points out that Home Depot sells non-luxury items that people need to buy, regardless of the economy, which gives the company and its green brand an edge.
“We aren’t selling designer luggage made from recycled material, these home essentials that people need.”
He notes that energy-saving products in particular, such as compact florescent light bulbs, are doing extremely well because they have such an obvious long-term financial and environmental benefit. “Customers may pay a little more up front but they see the payoff down the line,” he says.
Despite this strength, Home Depot is tweaking the marketing message -- and price points -- of its green products. The company has launched a price reduction program across the store, lowering prices on thousands of products to make them more affordable to struggling consumers. The Eco Options line is no exception.
Selling Green Products in Trying Times
Be consistent.
Communicate information about your green offerings across all media, including the website, advertising, catalogs and store shelves.
Show the value.
Consumers won’t buy low-quality products just because they have green attributes. You have to show that they perform as well or better than non-green competitors, ideally at a similar price point.
Make them easy to find.
The days of green products aisles and separate sections for green options in catalogs are over. Green products should be stocked side by side with similar non-green offerings so buyers can make comparisons and purchasing decisions on the spot.
Understand why customers are buying green products.
For many businesses, green choices are made to support certifications and regulations. If you can help them quickly identify products that meet their needs, you are more likely to make the sale.
“Our advertising message is that these products are great for the environment with new lower price,” Jarvis says. The company is also focusing on "opening price points," which spotlight the lowest priced items in a category.
“Consumers are looking for green products that they can afford,” he says. “Focusing on opening price points in our advertising shows them that they don’t have to spend any more than they would on conventional products to buy green.”
This kind of dual message is critical for marketing green products in a down economy, says Stern of McMillanDoolittle. He notes that those retailers who got involved in green branding early on, such as Home Depot, Target and Office Depot, are doing a better job of balancing the environmental message with quality and price.
Communicating the value statement is a key component of successful green marketing, agrees Anne Rodgers, spokesperson for Target in Minneapolis.
“Our focus has always been on value, giving consumers affordable options that enable them to live and work in eco-friendly ways,” she says. “That’s a consistent message for us, whether it’s a good economy or bad.”
Rodgers notes that along with pricing green products to be competitive with other product lines, the company stocks green items, such as its bamboo and organic cotton sheets, next to conventional ones so that consumers can make side-by-side feature and price comparisons.
The company also clearly states the environmental attributes on its packaging and signage to educate consumers about their choices.
“You have to offer an assortment of solutions at different price points so consumers can find multiple ways to be eco-friendly,” she says.
The Green Supply Cabinet
That combination of communication and education is critical to successfully positioning green product lines and establishing the corporate brand as an environmental leader, notes Stern.
“Communication is key,” Stern says. “You have to communicate what you are doing and what the value is to the buyer. And you have to do it consistently across all channels of communication, from the website and advertising down to the store shelves.”
Office Depot offers a vast array of products with environmentally friendly elements, from recycled paper and low toxicity cleaners, to a complete line of private label green brands that can outfit an office from top to bottom. The company’s message and selection is consistent regardless of the economy, which customers have come to rely on, according to Yalmaz Siddiqui, the company’s director of environmental strategy. As a result, the company reports sales of products from its green catalog continue to grow.
“In a tough economy our clients are still looking for environmentally sustainable products that perform, and they know they can find a tremendous range of green items that are price competitive,” he says.
When it comes to product messaging for green products, price and performance are equally as important as the environmental qualities, agrees Stern. “The challenge in promoting green products today is proving their efficacy,” he says. “Consumers want to know if they will work as well as other products.”
Part of Office Depot’s approach to selling green products is recognizing that every buyer has a different idea of the definition. The company focuses its green marketing message primarily on its business customers who are often seeking specific criteria to meet certification requirements or corporate goals. It offers them a choice of 4,300 different products that feature green attributes, such as environmentally preferable furniture, technology, lighting, dishware, cleaning products and printer cartridges.
A core part of its communication strategy is its annual Green Book catalog, which this year features an entire supply cabinet outfitted with green products, along with educational content to help buyers learn more about greening their office in a cost effective manner.
The company works with customers to identify products that meet specific environmental goals or certification requirements, such as federal government mandates to purchase a certain percentage of recycled materials, or LEED specifications for non-toxic products. Once they know what the client needs to accomplish these goals, they help them choose products that best meet those criteria at the desired price point.
Office Depot also help buyers choose products that
can strengthen their purchasing processes while still maintaining cost criteria, such as buying in bulk to improve their environmentally standing.
“Being aware of why our clients purchase green helps us help them identify solutions,” Siddiqui says. This is especially helpful for products that may not otherwise clearly communicate their green value, such as office furniture that features low volatile organic compounds (VOC) in its design, which is a key component for LEED certification.
“We reach out to our suppliers to learn about those attributes then we communicate them to our customers,” he says.
To help customers register their green purchases for LEED certification purposes, and to add further value to working with Office Depot, the company now offers a purchase-tracking tool that records green product purchases in a format that mimics LEED certification documentation requirements.
“It converts their historic spend to the exact template used by the U.S. Green Building Council (USGBC),” Siddiqui says. “It dramatically simplifies the paperwork for buyers because they don’t have to do it themselves.”
Office Depot also publicly honors those who make the biggest effort to buy green products through its annual Green Customer Award ceremony. This year the awards were presented during the USGBC Greenbuild International Conference & Expo to six customers, including law firm DLA Piper, Edelman public relations agency, and New Balance Athletic Shoe Inc.
“The rationale for these awards is partly to recognize customers for green purchasing, and partly to show that we are a seller of green products,” Siddiqui says, noting that at the recent awards ceremony several customers approached him to say they wanted to be on that podium next year – particularly if their competitors were winners. “It’s good recognition for individuals, and it’s an encouragement to other customers to make that transition.”
Whatever green products a company is offering, the message has to be consistent across all methods of communication, and product offerings have to support customer interests in cost, quality and environmental attributes.
“Whether the economy gets worse or better these products are not going away,” says Home Depot’s Jarvis. “Those retailers that carry green products through the hard times will establish themselves as the companies that care about the environment, and consumers will remember that.”
Sarah Fister Gale is a freelance writer based in Chicago.
Yet even as green product sales continue to thrive, industry insiders say, retailers need to tweak their message to emphasize quality and value in addition to the environmental attributes.
“The challenge is promoting the efficacy and innovation of the product, as well as the sustainable elements,” says Neil Stern, senior partner with retail consulting firm McMillanDoolittle in Chicago and author of “Greentailing and Other Revolutions in Retail.” “The message has got to be about value.”
That consumers are continuing to buy items offering a combination of quality and green characteristics bodes well for retailers who've invested time, money and inventory in private label green brands and other green product lines. The 2008 Good Purpose survey from public relations firm Edelman overwhelmingly shows that buyers plan to remain loyal to products that they perceive to have strong social value.
According to survey results, 68 percent of consumers say that even in a recession they would remain faithful to a brand if it supports a good cause; nearly seven in 10 would be prepared to pay more for eco-friendly products.
The results don’t surprise Ron Jarvis, vice president of environmental innovation for Atlanta-based Home Depot. While sales are down overall at Home Depot, its Eco Options label of energy efficient products are outperforming conventional merchandise sales across the board. “We are seeing continued interest in socially conscious products in our stores,” he says. “American consumers still want choices that have less of an impact on the environment.”
Jarvis points out that Home Depot sells non-luxury items that people need to buy, regardless of the economy, which gives the company and its green brand an edge.
“We aren’t selling designer luggage made from recycled material, these home essentials that people need.”
He notes that energy-saving products in particular, such as compact florescent light bulbs, are doing extremely well because they have such an obvious long-term financial and environmental benefit. “Customers may pay a little more up front but they see the payoff down the line,” he says.
Despite this strength, Home Depot is tweaking the marketing message -- and price points -- of its green products. The company has launched a price reduction program across the store, lowering prices on thousands of products to make them more affordable to struggling consumers. The Eco Options line is no exception.
Selling Green Products in Trying Times
Be consistent.
Communicate information about your green offerings across all media, including the website, advertising, catalogs and store shelves.
Show the value.
Consumers won’t buy low-quality products just because they have green attributes. You have to show that they perform as well or better than non-green competitors, ideally at a similar price point.
Make them easy to find.
The days of green products aisles and separate sections for green options in catalogs are over. Green products should be stocked side by side with similar non-green offerings so buyers can make comparisons and purchasing decisions on the spot.
Understand why customers are buying green products.
For many businesses, green choices are made to support certifications and regulations. If you can help them quickly identify products that meet their needs, you are more likely to make the sale.
“Our advertising message is that these products are great for the environment with new lower price,” Jarvis says. The company is also focusing on "opening price points," which spotlight the lowest priced items in a category.
“Consumers are looking for green products that they can afford,” he says. “Focusing on opening price points in our advertising shows them that they don’t have to spend any more than they would on conventional products to buy green.”
This kind of dual message is critical for marketing green products in a down economy, says Stern of McMillanDoolittle. He notes that those retailers who got involved in green branding early on, such as Home Depot, Target and Office Depot, are doing a better job of balancing the environmental message with quality and price.
Communicating the value statement is a key component of successful green marketing, agrees Anne Rodgers, spokesperson for Target in Minneapolis.
“Our focus has always been on value, giving consumers affordable options that enable them to live and work in eco-friendly ways,” she says. “That’s a consistent message for us, whether it’s a good economy or bad.”
Rodgers notes that along with pricing green products to be competitive with other product lines, the company stocks green items, such as its bamboo and organic cotton sheets, next to conventional ones so that consumers can make side-by-side feature and price comparisons.
The company also clearly states the environmental attributes on its packaging and signage to educate consumers about their choices.
“You have to offer an assortment of solutions at different price points so consumers can find multiple ways to be eco-friendly,” she says.
The Green Supply Cabinet
That combination of communication and education is critical to successfully positioning green product lines and establishing the corporate brand as an environmental leader, notes Stern.
“Communication is key,” Stern says. “You have to communicate what you are doing and what the value is to the buyer. And you have to do it consistently across all channels of communication, from the website and advertising down to the store shelves.”
Office Depot offers a vast array of products with environmentally friendly elements, from recycled paper and low toxicity cleaners, to a complete line of private label green brands that can outfit an office from top to bottom. The company’s message and selection is consistent regardless of the economy, which customers have come to rely on, according to Yalmaz Siddiqui, the company’s director of environmental strategy. As a result, the company reports sales of products from its green catalog continue to grow.
“In a tough economy our clients are still looking for environmentally sustainable products that perform, and they know they can find a tremendous range of green items that are price competitive,” he says.
When it comes to product messaging for green products, price and performance are equally as important as the environmental qualities, agrees Stern. “The challenge in promoting green products today is proving their efficacy,” he says. “Consumers want to know if they will work as well as other products.”
Part of Office Depot’s approach to selling green products is recognizing that every buyer has a different idea of the definition. The company focuses its green marketing message primarily on its business customers who are often seeking specific criteria to meet certification requirements or corporate goals. It offers them a choice of 4,300 different products that feature green attributes, such as environmentally preferable furniture, technology, lighting, dishware, cleaning products and printer cartridges.
A core part of its communication strategy is its annual Green Book catalog, which this year features an entire supply cabinet outfitted with green products, along with educational content to help buyers learn more about greening their office in a cost effective manner.
The company works with customers to identify products that meet specific environmental goals or certification requirements, such as federal government mandates to purchase a certain percentage of recycled materials, or LEED specifications for non-toxic products. Once they know what the client needs to accomplish these goals, they help them choose products that best meet those criteria at the desired price point.
Office Depot also help buyers choose products that
can strengthen their purchasing processes while still maintaining cost criteria, such as buying in bulk to improve their environmentally standing.
“Being aware of why our clients purchase green helps us help them identify solutions,” Siddiqui says. This is especially helpful for products that may not otherwise clearly communicate their green value, such as office furniture that features low volatile organic compounds (VOC) in its design, which is a key component for LEED certification.
“We reach out to our suppliers to learn about those attributes then we communicate them to our customers,” he says.
To help customers register their green purchases for LEED certification purposes, and to add further value to working with Office Depot, the company now offers a purchase-tracking tool that records green product purchases in a format that mimics LEED certification documentation requirements.
“It converts their historic spend to the exact template used by the U.S. Green Building Council (USGBC),” Siddiqui says. “It dramatically simplifies the paperwork for buyers because they don’t have to do it themselves.”
Office Depot also publicly honors those who make the biggest effort to buy green products through its annual Green Customer Award ceremony. This year the awards were presented during the USGBC Greenbuild International Conference & Expo to six customers, including law firm DLA Piper, Edelman public relations agency, and New Balance Athletic Shoe Inc.
“The rationale for these awards is partly to recognize customers for green purchasing, and partly to show that we are a seller of green products,” Siddiqui says, noting that at the recent awards ceremony several customers approached him to say they wanted to be on that podium next year – particularly if their competitors were winners. “It’s good recognition for individuals, and it’s an encouragement to other customers to make that transition.”
Whatever green products a company is offering, the message has to be consistent across all methods of communication, and product offerings have to support customer interests in cost, quality and environmental attributes.
“Whether the economy gets worse or better these products are not going away,” says Home Depot’s Jarvis. “Those retailers that carry green products through the hard times will establish themselves as the companies that care about the environment, and consumers will remember that.”
Sarah Fister Gale is a freelance writer based in Chicago.
Thursday, October 16, 2008
Green Website for the Day
Green Website:
350.org
Started by author and environmentalist, Bill McKibben, 350.org stands for the parts per million of carbon dioxide in the atmosphere. 350ppm represents the number that we need to get back DOWN to in order to keep our planet a functioning planet.
If we don't, 6 irreversible tipping points will occur - one of them being a massive sea level rise.
Go the website and find out what the other 5 tipping points are.
Be Environmentally Cool
Head Local
Green Local
350.org
Started by author and environmentalist, Bill McKibben, 350.org stands for the parts per million of carbon dioxide in the atmosphere. 350ppm represents the number that we need to get back DOWN to in order to keep our planet a functioning planet.
If we don't, 6 irreversible tipping points will occur - one of them being a massive sea level rise.
Go the website and find out what the other 5 tipping points are.
Be Environmentally Cool
Head Local
Green Local
Green Word of the Day
DEGRADABLE
A material that undergoes chemical change and a loss of orginal chartacteristics due to envrionmental conditions. There are no requirements for time, process or toxicity for this method.
A material that undergoes chemical change and a loss of orginal chartacteristics due to envrionmental conditions. There are no requirements for time, process or toxicity for this method.
Wednesday, June 25, 2008
Fields Of Gold
06/25/2008 10:15 Mountain Time
Fields of Gold relates to the upper Jeremy Ranch mountain biking trail system. Here, on the north east side where the Preserve Connector trail starts to head from Jeremy into the Preserve is where there is an ABUNDANCE of yellow wildflowers. Every once in a while you will see BRIGHT red flowers and an occasional blue/purple. But yellow dominates. Absolutely beautiful!
While riding on Sunday around 16:30, I ran into all of 5 people. A great, lazy, Sunday afternoon spin with no one around. This will all change as the snowmelt is at its peak and the ski hills open up for summer activities. The weather is beautiful (an occasional rain would be nice to quell wildfire risk).
"Locals" summer activities are also in full swing. Mountain Town Stages (Making the Mountains Swing) is in full glory with multiple stages around town. Free music, mountains, cocktails, friends. What could be better than that on a Wednesday evening?
Speaking of Wednesday evening, Locals Have More Fun - An Environmentally Cool Company has a busy week:
06/29 Park Silly - Embrace the Madness on Main Street
07/02 Deer Valley Mountain Town Stages
07/04 July 4th at Miner's Park
Locals tip: Locals will have hoodies for men and women!!!
Have a great holiday!
Head Local
Fields of Gold relates to the upper Jeremy Ranch mountain biking trail system. Here, on the north east side where the Preserve Connector trail starts to head from Jeremy into the Preserve is where there is an ABUNDANCE of yellow wildflowers. Every once in a while you will see BRIGHT red flowers and an occasional blue/purple. But yellow dominates. Absolutely beautiful!
While riding on Sunday around 16:30, I ran into all of 5 people. A great, lazy, Sunday afternoon spin with no one around. This will all change as the snowmelt is at its peak and the ski hills open up for summer activities. The weather is beautiful (an occasional rain would be nice to quell wildfire risk).
"Locals" summer activities are also in full swing. Mountain Town Stages (Making the Mountains Swing) is in full glory with multiple stages around town. Free music, mountains, cocktails, friends. What could be better than that on a Wednesday evening?
Speaking of Wednesday evening, Locals Have More Fun - An Environmentally Cool Company has a busy week:
06/29 Park Silly - Embrace the Madness on Main Street
07/02 Deer Valley Mountain Town Stages
07/04 July 4th at Miner's Park
Locals tip: Locals will have hoodies for men and women!!!
Have a great holiday!
Head Local
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