Barry McGeough - Technology, The New Social Lubricant

Hey, welcome to Season 2 of Fashion Made. I'm David Wilcox, the proud host of this podcast, and I just want to say a warm welcome back to anyone that listened to Season 1 and a brand new hello to any first-time listeners of this podcast. It's, it's really exciting that a year after we started these podcasts that I guess that I still have a job and that also how many people are wanting to come and talk to us about the exciting developments in technology for the apparel, footwear, and retail industries as well. It's an exciting week because I get to broadcast a conversation that I had with Barry McGough, the Group Vice President of Innovation at PVH Corp. I spoke to Barry last week about technology, innovation, all the things he saw at CES. It's a long conversation, it's 45 minutes, so I hope you're strapped in. I hope you enjoy it. And yeah, if you guys want to get in touch, give me a shout at dw@pi.tv. And yeah, I look forward to hearing from you guys soon. Enjoy the podcast. Today I want to talk to you about innovation, but I think first of all it'd be good to both agree on how overused that word is, how insane it is. How many times do we sort of hear this word?

I couldn't agree more. It's absolutely and wildly overused. And it's something that people are gravitating to because they feel that they want to get ahead. They feel that they're really behind the curve. And when you're behind the curve, you don't want it. You don't want to have anyone come in and disrupt you. So there's an author that I was lucky enough to see at South by Southwest, Rohit Bhargava. And he wrote— he writes a series of books called Non-Obvious. So they are— he does one every year. And interestingly enough, for the last 10 years, he has actually gone back to see whether he's properly predicted some of these trends. One of the things he identified this year was this idea of innovation envy. He believes that fear leads businesses to envy the competition, and then we either approach innovation with admiration or desperation. I get it. So the idea— so initially you say, okay, well, I don't want to be disrupted in the way that sort of I see everything out there in the world— Netflix, Uber, and Warby Parker. And we can say, oh my gosh, the world is so disruptive and I don't want to lose out. I don't want to be one of those loser companies. So if you fear being disrupted, you say, I have to do something quick. So, you know, the buzzwords for the last couple of years have been stuff like, let's crowdsource the ideas or let's have a hackathon. Or, you know, let's build an innovation house. And so what happens is, is in this desperation for people to put something up, put anything up, they haven't done it with any process. They haven't done it with any ideation or diligence. And so they inevitably become disappointed with it. And I think that's what's really leading to this idea of innovation as an overused idea, because people people tend to be disappointed because they put them up in a hurry and haven't really thought through the fact that this is a discipline and this is a process and this is an area of our industry that is not going to go away. And it will be required for all businesses to maintain their own cutting edges. And we have to determine as, as individual businesses whether we want to be on the cutting edge or whether we want to be on the bleeding edge. Those are things that we have to think about. But I think this idea— I like what Rohit put out there, this idea of innovation envy and why it's driving a real sense of disappointment in this area. And that, that can, that can be changed with process thinking.

Yeah, that's quite interesting. Do you think it sort of mirrors the same thing that we've got with social media at the moment where we constantly have this envy of other people, but actually we really are not seeing the true image of how that person really is.

Yeah. I mean, we're always, you know, the trend of putting up our idealized self is, is, uh, is becoming more and more prominent. Um, I, I don't want to sound like a shameless plug. We're South by Southwest, but, uh, you know, it's a very interesting show. There's some, some, I'll, I'll quote Rohit and say non-obvious. There are some non-obvious touchpoints in our, in our industry, in the apparel industry specifically, that are really important. And I found the two most interesting shows and convenings that I've been to in the last— since the beginning of the year are CES and South by Southwest. And you think, oh, what do those have to do with apparel? But these shows inform the direction of travel of society, and the people, the citizens in society, are consumers. So we understand consumer behavior, citizen behavior, we understand consumer behavior. And so one of the things we saw exactly to your point, David, is there was a speaker from the healthcare industry and then it was, it was their, their talk was simply entitled 10,000 Followers and No Friends. And it was really about what they're referring to in the healthcare field as the loneliness epidemic.

Yeah.

People are putting their idealized self so far out there that they all of a sudden are, are vamping for the camera, making sure that they look beautiful and that they get so many likes. And yet it is leading to some, some pretty severe healthcare consequences that we always also have to deal with, especially, especially with upcoming generations.

Yeah, I mean, there's huge spikes in need for sort of validation for people. I guess mirroring that back to business, do you feel like there's spikes in the need for validation in innovation departments as well?

Yeah, so there's a really interesting KPMG study that came out. It's their State of Innovation. They actually poll about 270 Fortune 500 global companies and they say, okay, well, If they can map out where every— where typical companies are on their journey in innovation, they list out 5 ways, 5 steps or stages: ad hoc innovation, emerging innovation, innovation which you can define, defined innovation, then after you define it, you can integrate it, and then you can optimize it. So they polled these 500 companies last year, and of these Fortune 500s, 43% said that they're still in the emerging area of innovation. They don't feel they've nailed it.

Yeah.

So, you know, and in fact, we look at this sort of paradigm and we say, okay, well, the conventional wisdom would tell us that basically we run— we run in our minds at the 50-30-20 rule. So 50% would be sort of innovation which is incremental to our businesses, 30% might be adjacent to our business, would be kind of evolutionary, And then 20% would be this big idea, this Steve Jobs transformational ideas. And in fact, according to KPMG, only 7— a whole 70% of innovation that people are working on now, typically 70% is incremental. So we're not working on these big ideas right now. We want to be, we think we should be. Conventional wisdom says we should be. But innovation as a discipline is very, very nascent. It really is uncharted territory and it's in its infancy right now. We know we need it, and we know there's no rules. That's why I keep calling this the Wild West.

Yeah, yeah, a very exciting place to be. It must be difficult then to, I guess, measure. If you're in the Wild West and there are no rules, you know, businesses like rules because they want to measure things so they can use that sort of structure to develop and get better. So how do you measure success in innovation department?

You know, I think that's one of the main things that's leading to the disappointment around innovation is because people are applying traditional metrics. So if you think about it, a traditional metric would be— could be impressions, like an MROI. It could be units sold, could be an increase in top-line sales or margin improvement. But typically when you're bringing a new idea to market, it's new for a reason. It doesn't have a track record. You can't forecast it. You can't say, oh, well, I'm going to get this many incremental dollars from this improvement. It makes it a lot harder to apply the traditional metrics and KPIs. So it's very important that we start to determine what those non-traditional KPIs are. So, you know, back to this KPMG study, it was really, really interesting. They're actually looking at what these ideas are too, and how are companies measuring innovation, because you're not going to get a margin uptick on a new product or a new line. And you know, I really believe that if you can't measure it, if you can't manage it, you can't measure it, you can't manage it. So KPMG looked at this and they're looking at these traditional and non-traditional metrics and how people are measuring it. And they, their number one non-traditional KPI that they're looking at right now is consumer touchpoints. 63% of mature companies say that that's, that is the number one thing that they measure on. Number 2 is learnings and insights, which is, I think, is very vague, but, but they— companies are tending to value learnings and insights a lot more, especially as we look at consumer behavior and we become as an industry not customer-facing. We're not facing our buyer anymore. We're facing our consumer. We're becoming more consumer-facing. So that learnings and insights generated is a valid number. But the number 3 way of non-traditional measuring of KPI and ROI is progress metrics. And that to me is really interesting because we can look at stage gate thinking from a process point of view and say there are stage gates that every idea goes through. You see it in the Gartner Hype Cycle. You see it in every, every, everyone that's been written about this idea of incremental to transformational technology and innovation. But I'm looking at this idea of being able to look at these stage gates and say, how many stage gates do we pass? So we're working right now with some prominent universities on, on developing KPIs and ROIs on this. And the idea of moving between stage gates is very fascinating. As you get through ideation, you get through business alignment, proof of concept, and then into innovation launch. Those are all, those are all pillars of the process that you go through. And if you can say, look, last year I went through 54 stage gates, and this year I went through 60, then you can say, okay, my innovation division was more productive last year. There's other ways you can look at it. You could also say, oh, well, if I'm— if I had less innovation going through this year, then my pipeline is more, more rigorous. I'm only squeezing out the best ideas. Only, only 5 things go to market every year, even though I might try 50 things. So we're looking at both ways of measuring KPIs and ROI. To be able to say, let's measure it, let's manage it. And certainly validated by the KPMG study.

So you went to CES, right? What did you see there that you thought, wow, okay, yeah, that's coming, that's happening, and that's something we really need to be ready for?

Without a doubt, it's the most important show for the apparel industry that we could go to. And I've actually spoken to several senior executives in the industry that firmly believe the same thing. The number 2 exhibitor on the floor of several hundred thousand exhibitors at CES were— it was in the health, health and well-being and wearable space. So we know right now that a lot of things are going to be happening in the digital space for us. We look at this and we say there's 2 areas of digital engagement for, for our industry and for, for most industries. But for ours specifically, one is digital experience. What's happening with digital transformation? So first of all, what's happening on the e-commerce side? What's happening on direct-to-consumer?

Mm-hmm.

What are consumers going to expect as their experiences are enhanced? The big ideas at CES really are on voice and on machine learning. So we know that your experience online is going to be enhanced by being able to interact in different ways. Ways. Yeah, there's also the digital experience that's happening in AR, VR, and mixed reality. As we're getting into this idea of mixed reality, then we're gonna— there will be different ways to interact with consumers. So that becomes really important. All of this is going to be driven by 5G because 5G will enable real-life and real-time virtual MR and XR experiences. But the other part of the digital side of this— so that's all digital experience, right? That's the digital world. But the other part is apparel connected to the Internet of Things. So in 2025, there will be 8 billion people on planet Earth and 50 billion connected devices. That means everything is going to talk to everything else. So this idea of the connected IoT is not— it's happening right now in, in ways that are even behind the scenes. We don't really see how much everything is connected, but we're starting to see more and more IoT devices come into our lives. And when they say everything is going to be connected to the cells, I always like to joke, no one ever said that everything is going to be able to— is going to be connected to everything else except apparel. I've never heard anyone say that. So people, everything means everything. So there will be an expectation that we'll be able to connect to our apparel in very interesting ways. We won't be able to tap our collars and beam me up, Scotty, that soon, but there will be ways which we will expect to have technology make our lives more fluid and more interesting as we go through our days. And I believe that the connection with apparel to the IoT, while it started in healthcare, it's going to really take off in social. How can there be social fluidity that's influenced by technology? And the big barriers for connecting apparel to the IoT are really power generation and power storage, because nobody wants a shirt they have to plug in. So as technology gets smaller, faster, lighter, and cheaper following Moore's Law, then we're going to, we're going to be able to more seamlessly empower our garments with things like NFC, RFID. You know, a great example is what Google is doing with the Levi's Project Jacquard and having touch-sensitive fibers that turn your jacket into your phone. It's tremendous technology.

Tell me more about that. What's it?

So if you haven't seen it, they launched it last year.

Yeah.

And it was an incredible multi-year investment that Levi's did. Where they put touch-sensitive fibers in the sleeve of a denim trucker jacket, and they were specifically looking at bike commuters. So that was their use case. And when they had this use case settled, which is a real— it's a real point of contention in the apparel industry. Yes, we'd like to be connected to the IoT. We'd like our apparel to be connected to the IoT. But what will it do? That's the big question. Why would we do it? What will it do? And then, of course, how much will it cost? So they squared that and said, we're gonna, we're gonna focus this directly on bike commuters and the thing that, what are their problems? And when they solve that problem, they say, okay, answering the phone, you don't want to get, you don't want to get in an accident because you're answering the phone. Let's say you're a bike messenger, you need to get directions. So what are step-by-step directions and how do you, and music, how do you turn the volume up and turn the volume down? So they basically made a touch-sensitive grid on the AB and XY axis of the jacket, and you can swipe left and swipe right like you do on your phone for anything else. And then you can say volume up, volume down, down, next song, answer the phone, tap out, and you basically use your sleeve as a screen. And then, so that's a social fluidity. That's a way to take a layer out of taking out your phone, putting in your security code, and having to do all the interaction where things are seamless. And our expectation right now from a consumer's point of view, sort of the Amazonization of people's expectations of immediate gratification, is is that we want it now. I mean, I think if you order something on Amazon and you don't get it in 2 days, you're kind of disappointed, even though it says you're going to get it in a week, right? We really expect this now. So this idea of social fluidity is really going to be a very interesting way for us to connect to Parity IoT.

I think that's a really, really interesting point because the social side of new technology introduction is fascinating because sometimes things have been introduced too early.

Yes.

Society hasn't been ready for the introduction of new technology, and so it's failed. And I think from my perspective, I think we've seen that with Google Glass. I don't think people were necessarily ready for it. That was a big transition. And I believe someone brought out the iPad a couple of years before the iPad, but no one was ready for it. You could say that Apple then did a big old marketing campaign and nailed that with the marketing side of things. It goes without saying that society can be not ready for a new technology introduction. The probabilities of the near future are immense. Voice technology, RFID, the stuff that you were just talking about with Levi sounds awesome. Do you think we're ready for it?

I think consumers are ready for it. If we nail the technology, if we make it seamless. There's a concept in psychology, and they refer to pets and animals as a social lubrication. It's kind of a weird, you know, weird word, but the idea is that you would— you're more willing to talk to someone who has a pet. Oh, you have such a cute dog, right? So the idea that that technology can be a social lubricant is, is really important, but it's got to be easy and seamless. Look, I love, David, the Google Glass that you study, you know, that you just kind of put up, because everybody loves to call that a failure. And in actuality, it gets into this idea of risk and failure. So, so backing up a little bit, what is success? Your question is What are we ready for? Well, we're ready for it from a conceptual point of view because we would like it now. We'd like to beam me up, Scotty, and do all that. But if we can start to bring it in, then we— then people will— they will adopt it if it's seamless enough. So we as an industry have to look at how we phase those ideas into the market. Some are going to be early, and we have to understand that as we bring ideas into the market on all— in all industries, that there is something called failure. Now Silicon Valley has a, has a much greater understanding than the apparel industry does on what is, what is the failure model. Failure, I think failure has a really bad rap because nobody wants to fail. So I do like to change that idea to a learning model. So if you, if you look at Google Glass, for instance, then Google Glass came out in 2015. I've seen numbers that they've invested $650 million buck into, into Google Glass. And the people could say, oh, that was a real failure. The guys that were wearing it, they called them glassholes. It was terrible, right? Super bad launch. But was that a, was that a fail? And I would argue that it probably isn't, because it not only gave learnings to an industry that is really going to focus on hearables and seeables, and it developed a tremendous amount of IP that Google could own. But what the— but people don't talk about is GlassX. GlassX is a completely new enterprise inside Alphabet. And GlassX, uh, in 2025, they're going to estimate that 14— over 14 million workers will use that technology in places like warehouses and assembly. So when you have really complicated assembly, then you can try to figure out from a paper schematic what wire goes where, but there's several thousand miles of wire that that go into an aircraft, let's say. But if you can have an overlay for Boeing or GE that's showing up a virtual reality image of what wire goes where, what cord goes where, what circuit goes where, then they're looking at magnitudes of improvements on production efficiency and also a lack of error because you just can't mess it up if you're seeing it. Your eyes. Google Glass is a major, major enterprise, and they're working into the enterprise solution side. So we might not see it on the street, so maybe a swing and a miss on end use and user, but not a swing and a miss from the business case. If they're gonna sell 14 million units of these and they're gonna be on every UPS driver, in every warehouse, and in every assembly plant on Earth, maybe not such a big mess up after all.

Yeah, yeah, maybe they did okay with that one. Yeah, all right, all right, you got me convinced. It reminds me of the, the, the Kevin Kelly, um, was it Mirror World? You know?

Yeah. The Welcome to the Mirror World. Welcome to Mirror World.

Yeah, exactly. Exactly. You know, and so you've got this digital twin of the entire world. Um, and that's going to be, make things even crazier, you know? I mean, all the possibilities with that, especially mixing that within the mixed reality, um, side of things.

I mean, people— yeah, sorry, go ahead.

I mean, I was just going to ask you, I mean, how do you sort of forecast, all right, well, what are we going to do then?

So, you know, I thought Kevin Kelly's article was really prescient, you know, in looking at new technologies and consumer expectations. So you can look at Blade Runner 2050 and you can have really beautiful splash images and ideas in a dystopic way of what society will look like when everything is hologram and powered. And that's a lot for us to take in. But if you start to look at what consumer experiences are expecting, you know, we actually at PVH, we did a really great test in, in, in, at retail of virtual reality activation on your phone You hit a marker with your phone and you get product details where you wouldn't necessarily have the time to look at a hang tag and there may not be an associate on the floor to help you. It's a tremendous way to start to communicate with end consumers. So we as an industry are starting to dabble with it. I love the Zara activation in the fall where they had an empty window and it just said, "Shop the look." And you, you, you hit, you use your phone to hit those words. It becomes a marker. And on your phone, you see people, runway models going across the window and you can see what's happening on a digital runway, but the window itself is empty.

Yeah.

So there's going to be really, really interesting ways to apply AR and VR and lots of mixed reality. As we start to go forward in our industry, we're seeing it more and more and more. Eventually, what Kevin Kelly said was, we're going to start to see these assets painted everywhere. For instance, right now you can have Pokémon Go, and everyone talks about that as a really successful activation. You can literally go to the Eiffel Tower, and you can see Pikachu on the Eiffel Tower. Really cool. Pretty soon, what Kevin Kelly says is you'll be able to go to a restaurant, your favorite Italian restaurant, and you can use your phone to look at the building and it'll say next available table 8:15, Yelp review, you know, 4 stars. And so the question is then, who owns that building? Does the— does the— does Yelp own it? Does, um, does the, the business owner own it? Does the city own it? You'll be able to geo-map paths to certain ways where you just follow the purple line. You can already do that at Lowe's. You can follow the purple line to light bulbs.

Yeah.

But will you be able to follow the purple line to, you know, to Nordstrom's? So what he postulates is every physical thing in the world will, will have a 100% digital overlay. It'll have a digital twin on top of it.

Yeah.

What's going to happen with that then? The complications are, are ownership, IP. There'll be whole new economies built on it. And also there's going to have to be some, some legislation around who owns it. Because what's going to, what's going to stop someone from putting something bad up? If someone decides to put a swastika at the top of the Eiffel Tower, who owns that and who can stop or control that experience? So yeah, yeah, utopian and dystopian view of the digital world, but it's coming so very fast that it's— so I think it was really good for him to bring that up. And it often, but in the short term, certainly it offers us tremendous opportunities to look at how we're communicating with our end consumers in ways that consumers expect us to have a relationship with them, and they're mad at us when we don't. So these are the tools that are going to fuel that conversation and that consumer loyalty to brand.

Yeah, and I guess to get there, you're going to have to, as you were saying earlier, this failure, as you put it, you know, the learn model, you're going to have to be prepared to learn in the process to get all of this stuff working smoothly.

We're going to have to learn. Look, I love this TED Talk by Leticia Gasca. She talks about failing mindfully, but she's actually got a whole world around this where she's trying to teach this idea. She's got something called the Failure Institute, and she has a tour that she goes around the country, and it's called Fuck Up Nights. Pardon my language. That's actually what it's called. But there have to be ways that we get this into our heads. Because basically, if we don't embrace this idea of fast learning, then as innovation divisions— to get back to the process part— we have to realize that innovation divisions de-risk our enterprise. We can have a short-term investment in, in, in something which tells us what the event horizon looks like, and we can save time and money to the organizations that are trying to figure out what's the next step. It's not just boldly going where no man has gone before. We have to do it with process and we have to do it with an informed opinion that's aligned with business strategy and is able to figure out what that rational event horizon looks and feels like. And that's how we go to the area of making sure that innovation division, this Wild West, is actually relevant and again, and a primary contributor to biz dev.

Yeah, I love that idea of de-risking. Um, can you tell me a little bit more about that? Is that something that you really focus on over there?

There's a, a pretty famous case study of trying to put in, um, visuals into, into glasses. Um, and not, not Google Glass, but other ideas. And so In this example, going to somebody that is a, like a Foxconn or a Flex, uh, to be able to figure out what it is would be— it was a really interesting way to try and figure out how to put in heads-up display into eyewear of some kind. And in this study, there were— it, it basically, they did a landscape view, and this is all funded through innovation divisions. They did a landscape view, they figured out what it would cost to tool, what the retail price would be, when you go to market, what the investment is, and what— from an innovation perspective, this article would be a $3 million investment in a 2-year event horizon and would be, you know, several hundred dollars. It costs $30,000.

Yeah.

But the study did, but the capital investment to make that happen was $3 million. So the question is, did innovation cost the company $30,000 or save the company $3 million? I would argue save $3 million.

Yeah, for sure. For sure.

And the time going down that rabbit hole that maybe the brand really couldn't handle that investment and that long-term event horizon.

Well, this is the other thing, right? It's not just money, it's time, it's people power. It's then momentum within the business.

Absolutely.

You know, and you need all of these things. And I guess when you're going through the ups and downs of, um, you know, having a great idea and then, you know, realizing that it's a lot of work and then, you know, making that way back up to, you know, success, um, you need things like momentum and energy. And I guess, you know, a massive learning experience that, uh, costs $3 million, um, dollars would, would affect that?

So look, there are several areas that we've identified and that I can look at and say there are roadblocks that people don't assume when they want to start an innovation division. And get back to how we first started this conversation, about the innovation disappointment. A lot of innovation divisions were set up emotionally and from that innovation envy point of view. We have to do something quick. Let's just set— let's just stand something up. And there are a couple ways that you can innovate, and the two primary ways that we look at in the, in the, in the discipline as it looks now is internal innovation. So you take the product lines that you work on now and you improve them in, in some ways, and they can be incremental or transformational. The other idea is you go to open innovation. Open innovation is when you start to look at innovation from a VC-funded point of view. You find, you find, you find a VC fund that's incubating small companies in the area of your interest, and you would put money into them. And the pharmaceutical industry knows this very well. You find people that are patent holders and they do the work.

And then when it's—

and then you invest in that work. You still have to embrace the failure model, which is, which is not fully understood. And that's why you apply metrics like IRR. And if you can figure out an internal rate of return based on what you think you should be able to get, then you're starting to add more traditional metrics into it. But you're also investing to invest. And but when that technology is done, it's bolted on from the external side. You don't have an internal division. But either way, you're going to have to realize that there are roadblocks that we started to lay out. So problems really of determining what is MVP. If you have to, you have to figure out what is minimum viable product because there's not always agreement on that. We have to figure out what happens in what Scott Belsky calls the messy middle. And the messy middle is where you're imagining a very smooth trajectory from, you know, awesome, I got a great idea to just hunkering down and doing it to success. And much, much different than that. So all the learnings of what happens in the messy middle are really important. Measuring and managing it, that idea of not— of managing your expectations and disappointments along the road by having those non-traditional metrics and KPIs are really important. And really realize that there's, from a human psychology point of view, there's always a last mile problem. The idea that even the best-laid ideas start to kind of lose their momentum when they hit that really last mile. And how do you navigate the last mile? So these are like some really interesting pitfalls that we're finding.

Yeah. Can you share some insight as to how do you navigate that last mile?

So when you're looking at last mile stuff, you're— some of the typical things that you're seeing are that we're starting to find are there can be risk aversion. Some of the reasons that will fail the last mile are fear of failure. There's budgetary reasons, lack of collaboration. Certainly even something as simple from a social psychology point of view as this just wasn't invented here. I just never liked that idea from the beginning. But I kind of go back to the KPMG report, and they are looking at the biggest barriers to innovation execution. And again, we're as an industry, we're thinking a lot about this. So it's not just my, my thoughts, but they say that 55% of respondents say that, that products and projects failed because of politics and turf wars. Force. 45% of people say that it's— that failure happens at the last mile because of culture, and 40% say that it's because of budget. So we have to look at those things when we're putting together our project and really anticipate what's happening from the internal part of this. And so that gets into this— that our, you know, our— and my philosophy on how innovation is driven in an organization. And there's 3 things that you need to do in order to deliver innovation into an organization. And if you don't do these three things, you fail. You need to have a pipeline of ideas that are constantly flowing into the enterprise. And that can be universities, it can be startups, that can be really good industry partners. It could be learnings from what we might get at contrary and external sources like South by and CES, for example, because we talked about that today. But that pipeline has to be clear. The other thing that you need to do is you need to have innovation management, and that's a term of art for us that we say that's how you commercialize those ideas and get them into saleable form in the, in the enterprise that you're supporting. And so you need to be able to do testing, validation, proof of concept, and that's, that's the hard work of turning it into what, what we decide is a minimum viable product that can be sold. But the other part that people forget about that really helped that last mile is this idea of socialization. You have to socialize the idea in your organization that there is a place for new ideas and that those, those ideas will be accepted. You can't say that the innovation division is other because they have to be part of, and that's the alignment to business strategy, of course. But the idea to make sure that innovation divisions will be accepted And you can start to do that through internal communications, through internal fairs, speaker series work really well to introduce new ideas into the organization. Your organizational structure can really help on the socialization side too. There's a lot of conversations in the innovation discipline about whether innovation division should be external and ivory tower and never be touched, or whether they should be fully integrated into the business goals and the seasonal goals of, of the enterprise, which has its own pitfalls because then you get pulled into incremental innovation. But, but if that socialization part happens, then you can start to pull away some of the complications around the last mile problem. But they also have to be— it has to be acknowledged that there is a last mile problem because everybody wants their new ideas to be able to be commercializable. Market.

So you have to be aware of it to, um, to obviously solve that problem.

Look, the number one things that, that people say, and we understand, that of— that enables innovation— the number one thing that people are pulled to say that make things happen is leadership support. You have to have support from the top. Number two is the ability to test and iterate, and the number three is team, which is just right back to the socialization. How do you socialize those ideas so people will accept them? And that's a very important part of that, that Venn diagram of the 3 things you need to deliver innovation is crucial because if you don't do all 3 of those things, you fail. If you have a really good pipeline of ideas and a really good way to bring it to market, but nobody wants it, you fail. If everybody wants it and you have a really good pipeline but no execution, you fail. And if everybody wants it and you have a really good way to get it to market and your pipeline is dry, you fail. So you have— there you have to do those 3 things. It's absolutely vital.

Yeah.

Do you—

so you kind of got execution, exploration, um, here. What are— what is an exploration sort of session, um, at PVH like? Or do you guys just have constant streams of ideas coming in from all of these external, um, sources, you know, almost too many to deal with?

So developing the pipeline of ideas is, is, is, is as interesting as it can get because, you know, we're looking at inside our industry and outside our industry for external sources, social, social cues and technologies which can affect our business. But what's most important is that we're driving against and aligning to business strategy. So an organizational structure that has members of the innovation division that are invested in and connected to the brand themselves is really vital. I personally believe that having an innovation division as an ivory tower is not a successful paradigm. So, so if you believe that you're aligned with business strategy, then it's a constant alignment with seasonal goals, strategic initiatives, and business case and consumer and customer needs. So what that means is that you have, you have a push and pull backwards. So we're constantly pulling ideas out of the brands and asking them, what do you need next? If you want your whites to be whiter, if you want your brights to be brighter, if they're functional improvements, then that's something that becomes a project. But there's also informing them of what's out there in the larger world. So we look at prompted and unprompted ideas to fill the pipeline of things which are meaningful to brands. And every brand and every classification has a different need.

So Barry, look, finally today, I just want to finish off on a couple of questions that have come in for you. So I'm going to start up here. People talk about the jump from physical to digital having such a huge effect on apparel and retail. Should we expect as big a change from one form of digital to another, i.e., from browsing on a website to shopping with mixed reality, for instance? So, yeah, so the big jump from physical to digital store over the last couple of decades, well, two decades, Should we expect as big a change in society and our habits in the next jump, which is, I guess, from, you know, from what we're using now to things like mixed reality?

So, you know, I think that's an incredible question. And by way of perspective, before I even answer that, I want to say that remember that 10 years ago you didn't have an iPhone. So what is fast and what is transformational? So the short answer is going to be yes. But what's going to really power that is, is 5G. And I believe really strongly that the things that are driving the 5G network, it's very, very different than just going from 3G to 4G. It would— so let's take it into perspective. In the 2G world, it would take you 27 hours to download Guardians of the Galaxy. In the 5G world, it will take you 3.6 seconds. So everyone's talking about this faster connectivity, but the reason that we want this faster connectivity is because— it's not because to download movies. You're gonna hear a lot about that, but what it's gonna mean is this idea of low latency. Low latency means that the information going to the cloud and back again doesn't take a lot of time. It'll take milliseconds. It won't take minutes. And when you have low latency, you can do things which are currently being forecast and really being driven a lot more by mobility than our industry. The idea of autonomous driving and mobility as traffic becomes a problem and the changing ideas around vehicle ownership and moving people around is— it has to be dependent on autonomous vehicles. Autonomous vehicles cannot exist without, without 5G, because when you're driving down the road and there's a chicken in front of you, you can't wait for that information to go up to the cloud and back again to say chicken. You already ran over the chicken before it got to the cloud. So it has to happen on the edge, so it has to not be at the cloud, and that edge computing has to happen fast. So that means this low latency idea is is very much being driven by different industries than the ones we have. Yet, we'll be the benefactors of that. Because all of a sudden, when these massive in, massive out networks are set up, and we have all the towers that are set up to be able to handle this millimeter wave, which is much shorter and much faster, which is a huge infrastructure build, there we're going to start to see mixed reality be as, as, as fast and as fluid and as less glitchy as real reality. So the first transformation for us is probably going to go through voice. And that's what we're learning at CES and from the tech industry. Voice will start to really have a big influence on how we, how we interact with our devices and how we expect to be interacted with. But the next wave on that is going to be mixed reality and extended reality, and that will be fueled by 5G. So they're building 5G cities now. There's 5 test cities that are, that are being proposed in 2019, 2020. But the first people that are going to actually be doing this, the first country that's going to be investing in major 5G network is going to be China. And China will be at 5G first, and we'll learn a lot from what they're doing. And we will start to see how this transition, as you said, from physical to digital will be powered a lot more by the speed with which we connect than the technology, which is about— the technology will develop after the speed comes.

Ah, okay. Interesting.

But if I say that's 5 years, you can say, oh, that's dog years from now. But it's not dog years if you remember that you didn't have an iPhone 10 years ago. So Yes, it will happen.

Crazy. Yeah. Does new technology, um, does it have to solve a problem or can it just be used for fun?

I couldn't love that question more. Do you know the number one reason why text became ubiquitous? It wasn't because it was fast and efficient. The number one thing that really brought text into ubiquity was emojis. They were fun and they were easy to get. And emojis made text a powerful medium for communicating when it was just really sort of obscure and geeky before. So getting back to the idea of apparel connected to the Internet of Things, I do believe that the idea of doing something really fun will— that will be the catalyst it won't probably be because, especially in the sportswear industry, most people aren't looking to sportswear brands to figure out when they're going to have their next heart attack. Probably not. They're not going to go there for that. But if I can connect seamlessly through Tinder or Grindr, then that also becomes a lot more fun, right? And I have this interesting interaction with social, with my apparel, And that— those will be the catalysts to technology. So I think fun will be the thing that really empowers this technology as, as much as utility.

Okay, nice. Barry, man, this is so, so interesting. Thank you so much for coming and spending some time, um, putting the world to rights today. It's been a great chat.

Look, to be able to start with the problems of innovation and end with the word fun is, uh, I think it's a good conversation too. I like ending on that note. So thank you.

Yeah, definitely. All right, well, take it easy. All the best.

Everybody get up!