A Hard Reset on Innovation for Fashion | Joshua Young | PI Apparel

I'm gonna go ahead and start just because I've got an enormous amount of stuff to cover and I want to get through it. The good news is the first part is maybe a little bit of an introduction so that if people come in, I don't think it's gonna be the end of the world. So I'm gonna dive in. This presentation is a little bit different than what I think you might have seen in the rest of the show. This is more about how, and less about the what. So in other words, less about the technologies and more about how we can change things. I feel like it's an important time in our industry to start speaking about what change looks like because everything's changing around us. And if we don't start moving and what I like to call jumping to the next curve, then I think we're going to be left behind. There's a fantastic speaker, Guy Kawasaki, who used to work for Apple. And he said that innovation isn't about doing things 1%, 5%, 10% differently. It's about doing things 1,000% different, literally completely changing the paradigm of how you're currently working. And so I don't know if what I'm proposing will get us there, but that's— I'm going to give it a shot. So bear with me. All right. Well, let's dive in. All right. So traditional fashion. And again, I'm going to go pretty quick. Typically, when I started my career, which was back at Nike in the '90s, traditional innovation was about physical materials, physical construction. So something like Flyknit at Nike was, you know, that's innovation. When I started with the innovation team, we changed that thinking that it could also include digital innovation. So digital product creation, body scanning, 3D printing, those were the digital type of innovations that we were looking at. Again, all things, right? Today, we're looking at a lot of a new— kind of a new scope beyond just some basic capabilities. So artificial intelligence, which covers a broad scope, sustainability, which is again more, more about the how and somewhat about the what, shape-based fit, rethinking about how we fit people in clothing, which is really important with e-com. And then spatial— we're just talking about spatial computing. The Vision Pro, I think, is going to be a major game changer. People who see it and use it think it's like nothing they've ever experienced before. And then digital experiences. And when I talk about that, so how do you bring some of the digital experiences that we're loving into the— especially into the selling process or even into an internal decision-making process, but primarily how does the— How does the consumer engage digitally in this new paradigm? I have a— I'm not going into it much in this particular presentation, but our e-com model is broken. It's based upon basically digital catalog. How do we make it more like the in-store experience? So what is the— if those things are the old innovations, so what's the new innovation platform for fashion? What do we need to change? What do we need to innovate on? In the future to take us to that, jump us to that next curve. So we have a lot of the innovations that I've just talked about, the ones that I went through starting with physical innovation, those are either objects, so like a new knit, like 3D knit is an object that you need to make part of a product for it to be relevant. And then you have capabilities. So something like, you know, the software that you see out in the show, like Browzwear, V-Stitcher is a capability, but you have to wrap it around a business model for it to be relevant. So we keep talking about putting things in context as a part of your innovation. So what is that next innovation platform for fashion? Well, for me, innovation, I think, in the future is going to be about process, specifically about making a significant change to what I would call the fashion process, and not just apparel, not just footwear, but all of the product types within fashion. So combining capabilities, changing your calendar, changing your organization, and changing the tasks that you use to create your desired future state is that next jump of our fashion. So why do we want to change? What's wrong with the way we do things? I probably don't need to tell anybody in this room any of these things, but just in case someone missed the memo. You know, a lot of the big companies, not fast fashion, some of the brands that a company that I used to work for would take anywhere from 18 to 24 months to bring product to market. That's like, I mean, that's, that's not having AI versus AI being broadly available in the marketplace nowadays. So that's just, it's not sustainable in 2024 to take 24 months. Oh, sorry, I got my, my numbers started getting me excited. It's not sustainable in 2024 to take 24 months to bring product to market. So anyhow, obviously overproduced. You can't just build a big giant product line and shove it out into the marketplace and hope it sells. That's just not going to be effective in the future. It's what— first of all, it's wasteful. We also— a lot of our product lines are very derivative. You know, we use competitor products, we look, look at what everyone else is selling, and then we hope we can sell something that's good enough to compete. And that ends up with a lot of derivative products in the marketplace. So how do we do unique product? How do we do something that's going to excite people? And then I like to say, I don't know if this is a word that many people use, but in terms of the user interface on how we shop, it's very user hostile. So I mentioned the digital catalog online, which doesn't give any brand differentiation. That was invented in 1998 to sell books by Amazon. Our model for selling product in store, especially apparel, where you have to, you know, pick something off the rack, go into a changing room, if it doesn't fit, you know, take off all your clothes, try on the new outfit, if it doesn't fit, then you have to wave someone down, you know, in your underwear. It's just not a great way. It's not an effective, efficient way to shop. And so all of these things, including the materials, tend to be unsustainable as well. So how do we move away from all of these issues that we have with our current process into something different? So this is the, the current process. Everything's very linear: plan, create, make, and sell. You know, we do all of these things in a row, and then we go back and we start at the beginning and do them all again. That's one reason why it takes 24 months to bring product to market. So what if we, as a change, proposed a new way of looking at process itself. So not looking at it as a linear fashion to bring product, but more I'm thinking as sort of an onion skin with our activators in the middle. So the first two circles being kind of activators to the overall process, and then the outer two layers being our capabilities, so our capability layers. So activator layers and capability layers. So let me explain what I mean. So the first capability and how we start our process has got to be people. Um, where do I start with this one? I used to have a manager that said, if you're going to make a list that somewhere in it has put people first, then you need to put people first. And so in my presentation, people is at the core of everything that we're thinking about in terms of this new process. What's important about that, in fact, I was just having a discussion with a previous colleague of mine that one of the main reasons that, that we— you are— you have failure within a lot of the projects that you run is because you don't bring someone in your organization along, either leadership or the team members. Or let's say, and this is scary, a lot of times, sometimes Innovation projects in big corporations will be for headcount reduction purposes. If you do an innovation project, then we can eliminate some roles. The fastest way to kill an innovation project is to tell people they'll lose their jobs if they do innovation. It just won't work. And so we want to be inclusive. We want to bring people along. If their jobs change, we're going to offer to retrain them. We're going to make them part of the movement, so to speak, so that everyone is included in what the new change looks like and everyone has a place. Because it doesn't— no one's going to want to change if there's no place, if there's no place for them in the new model. But we don't want to do it like flipping a light switch. We want it to be something where we're doing it over time so that people have time to absorb the change. And so for that reason, we need change management as part of our process. So that's kind of the, the internal piece. The external piece, this one's a little bit hard to talk about because sometimes We don't want to realize that a lot of our current fashion process is built on, I'm just going to say it, abuse of people in the supply chain. So how do we change that? How do we make sure that there's social justice within our supply chain? People are getting a local living wage. There's potentially even local ownership of the mills, of the factories, instead of bringing in people from other countries to lead a lot of this change. And so what that would mean is that also bringing in education, so linking both external and internal education within some of these countries so that you're building up your local population who's producing your goods and you're not just using them for cheap labor. So it's a completely different way of of looking at the people resource within your supply chain. Think of it as a people-friendly model. So people, putting people at the center is our number one, number one place. So the next thing is, if you talk about bringing product to market quickly, one of the biggest drivers that slows you down in that goal to bring your product to market is this material process where people try to develop new materials during the seasonal process. It hasn't worked for a very long time. And typically, even with fast fashion, you don't have time to do material developments as you bring product to market. So why don't we just take the material process itself out of the equation, make it a seasonless process, in fact, make the whole process seasonless and develop material innovations as you're going. And if it takes a month to do an innovation, great. If it takes a year to do a material innovation, great. You bring it to market when it's ready and then you drop it into your offerings as you go along, as you go along as part of your much, much shorter, let's say, you know, 1 month to 6 months to market process. So the other thing about materials is that we need to change again I don't want to abuse people while I'm bringing product to market. I also don't want to abuse planet when I bring product to market. I don't want my fashion to be at the expense of the people I love and the planet I love, right? So how do we make the process circular so that we're using, we're recycling, or we're bringing that product back to market through maybe resale? Can it be bio-based? So get rid of plastic within our supply chain. Using alternate crops. Cotton isn't always the right solution everywhere in the world. Growing cotton is great if you can— if it can be rain-fed, but if it's not rain-fed, it means you're probably using a local water resource that's not appropriate. So how do we look at using things like modal, hemp, any number of— if it's leather, believe it or not, mango and cactus can be great substitutes for leather. How do we think differently about the materials that we're using? And then also back to, in some ways, back to people, um, in that instead of shipping all of this material around the world, because we don't have time to do that in this new model, how do we grow it locally? How can it be locally sustainable? And again, back to, to seasonless. All right. So now those are the, those are the activators. All right. We've got people taken care of. We've got a materials process that's out of our seasonal calendar, or maybe we're getting rid of the seasonal calendar. Now we move into the creation process. So what I'm calling supercharged creation. In my new process, I want to do most of my creation digitally so it can be very fast, so I can make quick decisions as I go along. So 3D sampling will be very important, the 3D design, 3D sampling, spatial ideation. When I was at VF, at The North Face, we designed tents. The best way to design a tent is in VR because you can get it, you can design the tent around you and you can get inside the tent and you can put in pieces of the tent that you need. It's the right solution. I think spatial ideation, especially for something like handbags, could be a great solution in the future. New methods of make. This is a whole topic in and of itself, but I do think that What I would love to see, because it's very low wastage, is us moving to a model where we're using 3D knit and 3D woven materials, so creating products, just seamless products out of the knit or out of the weave rather than cut and sew, because cut and sew is inherently wasteful. So how do we move to a different model of creation altogether and get away from cut and sew and move to seamless? And then AI-assisted concepting. And quite frankly, if you've seen some of the stuff here at the show, like Six Atomic, AI-assisted product development in general, that will help us bring product to market extremely fast, much faster than what we are currently doing. So that's our supercharged creation. So consumer influence. Everyone talks about Shein. Oh goodness, they're doing— they're so wasteful, 1,000 new products a day. It is wasteful, but the concept is right, the execution is bad. I like to think about what Shein is doing is basically crowdsourcing their product feedback. So even more than just insights, they're in real time, they're getting information from their consumer about what they want and what they don't want. What I believe is they're doing it, just doing it the wrong way. So instead of doing it physically, do it digitally. Put your product— put product ideas out into the market, get feedback on what the consumer wants. So it's almost like a pre-order or crowdsourcing. And then because your product, your product process is so fast, then when you get the feedback on what the consumer wants, you can very quickly bring it to market without a chance for your competitors to catch up. Digital-based insights, as I talked about, and then even AI audience analysis. So if you do put something out in the marketplace, even if it's a digital concept, not just direct feedback on that product, but there's AI models that can scrape the, the kind of the, the chatter, so to speak, in the marketplace. So there's a Corto AI as an example of that where you get the overall feedback and opinion of Is this making my consumer feel good about my brand? So really go deep into the AI audience analysis. So sell then make production. That's the other thing that I think we really need to move to. So we have the ability to bring product to market very quickly now with a lot of automated production. So you've heard some horror stories of big companies having $9 billion in excess inventory $10 billion in excess inventory. Companies that I've worked with had— another company I was— I know had $3 billion in excess inventory. If you were having— if you were able to bring product to market very quickly, you could sell a product, quickly make it, and then ship it to your customer on a short supply chain. To me, this is probably one of the best ways of bringing product to market and again avoiding the, the model that Shein is currently using. In terms of fast fashion. In-region production and shipping. So having basically production centers of excellence in local regions. So North America, South America, Europe, Africa, Asia. And so you're not shipping across these vast distances in order to get product to market. Not only is that bad for the planet, it's also bad for speed. So how do we get to a more lean and agile manufacturing process? And again, all of that based upon a short AI-optimized supply chain. Doing good with time. I'm sorry, am I going too fast? I'm blazing through this because I figured I'd have so much content that I wouldn't be able to get through it all on time. And I wanted to have a chance for people to be giving some feedback. Because this is definitely a work in process from my end. All right, new selling experiences. So this is something that, uh, very passionate about. Again, I've mentioned the fact that our e-commerce model is really based upon something that Amazon invented in '98 to sell books. If you, in fact, at a previous PI, last PI in New York, as a matter of fact, I presented 4 a screen where you had 4 brands all with their jeans, with jeans. I did a search for jeans, search came back, pulled for— I did it for 4 brands, pulled the logos off, and then asked the audience if they could tell me which one was which, even close. And no one really got it. I think there was a few people that were— that one of them was Levi's, and there were people from Levi's in the audience that said, oh, those are Levi's. So that worked out, but that was cheating a bit. But the 4 brands, and no one could tell them apart, was H&M, Louis Vuitton, Levi's, and Old Navy. And of the 2 that looked the most similar, it was Louis Vuitton and H&M, which was surprising. And it was funny because we had someone from Louis Vuitton in the audience when I was presenting. And she actually was taking screenshots and texting it to her VP at the time. So it was, you know, that's not brand differentiation, but that's what every website looks like. So how do you make, how do you make the selling experience more like being in a store? How do you combine the best of shopping in a physical store where you can see all of the product and make broader decisions and get the brand experience without all the problems of the physical store. So in other words, seeing all the sizes that won't fit you, seeing the things that you necessarily don't want to look at or that don't apply to you, and being able to quickly know your— what sizes will fit you of the product that's in the store. So I think that's super important. Also looking at how do we include a resell model or a repair model into your product line. Repair, I mean Patagonia is doing a lot of this right now, a lot of brands are doing a repair model. Resell is a little bit trickier, I think it's actually more relevant in luxury because it's, you want to be able to, like maybe even using blockchain, be able to hand off ownership of a physical good to someone and know that they are now taking ownership and know the brand have knowledge that that new person is taking ownership so that you can get credit for that. Birkin bag that you didn't actually buy yourself, but you got secondhand. So that can be really, really interesting. I also really love what On is doing right now with subscription-based product. I don't know if you're familiar with what— with On Running and what they're doing, but basically the idea is if you run every single day, in about 3 months, your, your shoes are going to be beat. Your, your soles are not going to be You know, they're not going to be springy anymore. And so their thought is, well, why don't we just— why don't you just have a subscription? And so they made a shoe that was 100% bio, based upon castor beans, I believe. And what you do is you buy a subscription. They send you the shoe. In 3 months, when it wears out, or 6 months, depending on how much you run, you say, I need a new shoe. They ship you a new pair. You put the old pair in the box, you send it back, and they recycle it and they make a new set of shoes out of it. And so for— if you're a big runner, I mean, how great is it to just have a new pair of shoes every 3 months show up at your door and off you go, knowing that those old shoes aren't going in the trash, they're actually going to become new shoes. So it's really an interesting model. They're doing it with t-shirts as well. And I think it could work for a huge number of different product types that are those basics that you want to, like, you know, white shoes that you want to keep clean all the time. It could be very relevant. So I went through, so really quick, supercharge creation, consumer influence in your product line, so real-time feedback, sell then make production, and then new selling experiences. That last onion layer, which I think is in some ways the most important is what I call— and I don't know if this is already a term, if, if it is, let me know— but something I call deep planning. Something where you're constantly planning over the course of the entire process. You're so agile that you're able to change if you see an opportunity or something coming up. And also having the ability to do visual decision making. A lot of the legacy planning systems like for financials are not visual and you can't combine a visual of your product with like pricing information. So how do you, how do we over the course of your entire season be able to see like what's selling, what's not selling, and have visual feedback? Because we're humans, right? And we need, we need looking at everything in spreadsheets is very different, difficult. Have that visual decision-making feedback as part of your deep planning process. So continuous planning over the course of the season. If we were to— been talking a lot in the, in this conference about data being extremely important in the future. It is now and it will be forever. And AI allows, allows you to access an extremely large amount of information. I like to say if you can take your really smart people within your organization— in fact, in one of the panels, they were— they— one of the presenters, Sophia, was calling it artificial— no, augmented— augmented intelligence. I actually call it something different. I call it AI-assisted planning. So I think AI is still the right word, but we're not trying to replace these people because they have so much business intelligence already incorporated in their brain. And, you know, they have a lot of intangibles in terms of decision-making. Instinct is still important, but you want to give those smart people within your organization what I call AI superpowers. So that ability to analyze and filter through an enormous amount of information presented neatly in terms of options for decision-making and that include that, include that in your, in your process. So AI-informed planning, AI plus data plus visuals. So because of that, visual line planning, visual assortment planning is really important. Again, I think visual planning is really key in the future and is going to continue to be. We don't want to forget about physical retail because that's still going to be with us as well. And so what does Right now, a lot of companies— in fact, I just came from an M&S presentation earlier where they were— they had a— they take all of their digital assets they create over the course of their process and they put it into a virtual store so they can see over the course of the season what their assortment, what their store assortment is, how it's shaping up. Are they missing colors? Is it consumer correct? Is it appropriate for what they're trying to put forward? And saving a huge amount of time and space by not having, you know, by not emptying out a huge warehouse just to set up their, their store. They're doing it digitally and being able to immediately make decisions and change things in real time. And in fact, my previous role at Dickies, Dickies used this to an amazing advantage with their, even their wholesale accounts, being able to show them what what their new assortment would look like for their account. And their account actually ended up buying much, much more product because they had an idea how it would look in their store. All right, so this is the proposal. Again, that onion skin: people at the center, sustainable materials, a seasonless process with our capability layers of super cart charge creation, consumer influence, sell, then make production, and new experience selling. And then finally layered with that deep planning decision-making to provide what I would hope be to be maybe not perfect in this regard, but a new model in how we bring product to market and how we can do it sustainably in a people, people-friendly, planet-friendly, yet still profitable method methodology. So thank you. So, um, I was going to put— leave this up at— I was going to put this on at questions, but I'm actually going to go back and leave this up so that you can all ponder this. Uh, we have— I got— I can't believe I got through that with time left for questions. Um, but we've got 3 and a half minutes, so any, any— you can just, you know, raise your hand and blurt it out. Happy to, to take questions on this. Well, I got you another, another idea. What have I got wrong? How about that? I want to hear that. I want to hear good constructive criticism. Any thoughts?

Organization. If you go, if you look in the hands of UX designers, they will work to make it as smooth a process as possible. That's what they would say. So I guess it's like maybe we need to add that differentiation of values of KPIs. Otherwise you would just focus on—

Yeah. So one of the things that I didn't go into here because I figured it would take too much time was one of the ideas in having having the production be located around the world, like say having production in North Africa and having in South America and so forth in different areas, is not only to keep the supply chain short, but so for instance, I was on a trip with my friend Safir, who's in the room here, to Morocco and to Marrakesh. And the visual design aesthetic in Morocco is so completely different from what we see every day in the West. And actually, I think very beautiful in terms of like the graphics and the geometry that they use in the design. But you don't get that because we have Westerners, at least in the case of the companies I've worked for, Westerners designing clothing for Westerners. And it's Derivative, it's boring, right? That's what— and we're all, we're copying off of each other. So what if you had your design teams, a design team sitting in Morocco, a design team sitting in Chile, a design team sitting in Mexico? Would you come up with some really compelling product that maybe then you take in that, that it's maybe popular locally, and then you take to other parts of the world and again, see if that product is still relevant. I think it's a really interesting way to bring a whole new level of interest around product. There's a Brazilian company, what was the name that does the flower dresses? Farm Rio. Farm Rio. It's a truly Brazilian aesthetic, but it's so absolutely gorgeous that they become a global fashion phenomenon based upon their local aesthetic.

Sarek.

Makes sense, but as we know, it's very hard for a organization. So especially the experience from other places, like, how can we make something happen? Because it's, it's especially for me, is the level of mindset change when you bring in other organizations. Multi-teams, multi-setups. Yeah, I'm just looking at your image.

I'd like to know what is your— Yeah, so you start a— you basically do an internal startup, right? So you take a— LVMH has a team that basically is an innovation crew, and they are kind of an experimental team. So start up your own small fashion brand. But from the very beginning, do it completely different, and then wrap that brand in a consulting team that can then take the, you know, do collabs with other brands, bring other brands in, train them on, on the model, and then basically teach the rest of the, um, you know, the rest of the industry how to do it right. Um, you know, I, I mean, I think that's— I've tried Changing from within, changing the mothership, shifting, moving the Titanic and it still crashes. I think you have to start from scratch and it has to be, yeah, a small, lean effort. Good question.

Do you think it's almost a need for economy?

Because this is a kind of— The what? Need for economy. I think there's— basically, what we're talking about is, in some ways, like consumer customization. I think you could absolutely mix it in with the supercharged creation and the consumer influence components. In those areas, I think there's a place where, why not let your consumer, and maybe even give them— I mean, obviously, if they provide a style that makes you millions of dollars, then how do you share that? How do you share that? Profit share with a consumer who comes up with a really good product idea. Vans lets you put photos. I don't know if you know this, but their customization engine lets you put photographs on your shoes. You just upload a photograph and they customize your shoe with it. Why don't we let consumers actually bring us product ideas? I think it's a great idea. We are out of time. But I hope this was compelling, thought-provoking. It's probably not going to solve your DPC problems, but I hope it gives you some food for thought. Great, great. Thank you.