Benefits & Challenges of Scaling Virtual Products | PVH, Urban Outfitters, Perry Ellis | PI Apparel

So thank you everyone for being on the panel. Maybe we could start off with introducing yourselves and telling us a little bit about where you are in your current digital journey. And what does scaling mean to you?

Yeah, I will start. I'm Wei. I work at URBN. I'm the associate manager for 3D technical design innovation. We have started the 3D journey about 5 years. We built a pretty strong foundation. We're currently at a stage that people feel comfortable. We start to scale it up in the past 2 years. I think scaling it up means reach out to more teams to give them the right tools for them to be more efficient. Yeah.

Hi, I'm Megan Lano, and I'm the 3D technical design lead at Calvin Klein Underwear and our close-to-body brands. We have started our digital efforts back in 2018. It was a small pilot. And since we have grown across all of our product categories. So for me, when I think of scaling, at first in the beginning, it was scaling across all of our product categories. Because we really started to focus first on our men's underwear. Get, you know, understand the nuances of that and then build off of that. One of the challenges was creating our bras, which now we have successfully landed a solid foundation. And so now when I think of scaling, I think of what are the other use cases for these 3D assets that we've created.

Yeah. I'm Anupama. I'm head of DPC at M.A.S.H Holdings. So we are a manufacturer, and we work with 60-plus brands in 3D. So annually, we produce about 4,000 styles. So as of today, we've done all stages in DPC except for fit. So for me, scaling means being able to take it end to end. I think it's all our wish. But it also means tagging scaling to business impact, right? So at volume, are we able to also drive business value? So that's what it is.

Great.

Isaac Korna, Senior Director of Innovation at Perialis International. We have been doing 3D since 2017. We started a little bit early in the game, I think so. We've been slowly but surely scaling up, and what does scaling mean for us? It's that we take it to end-to-end like everybody said, but our focus has always been in how we can create an ROI so that the entire teams sees value into our 3D process. So we have created a very good pipeline that 3D now, it's not an aftermath for everybody, but it became part of their daily workflow and their daily routine. So for us, scaling is that it's already part of what we do.

Okay.

And thank you. But why at scale? What are some of the benefits you've had from increasing the volume of 3D assets you're creating? Anyone want to grab that first?

Yeah. So I think at scale, I think the business— it's the business impact that we are all going after. But in order to be able to get that, in order to get that game-changing level of impact, we all want to be able to take it end-to-end. So we have some of our brands that have unlocked 2 to 3 sampling stages. So for example, there's a large sportswear brand a brand that does about 80% of their first protos in 3D and has been able to save about 7 weeks, right, of their calendar. And there's a similar trend across other brands as well. But reaching maturity takes time. It takes effort. It also takes strong foundation and executive sponsorship. So I think all of us want that benefit, but not all of us are willing to do what it takes to get there. So I think being aware of that piece is also important.

Yes, I think that's a great point. I think for us, when we were building out our block library and our material library, that was at scale for us. And through that process, that's when we kind of started to develop a point of view for what our quality standards are. So having that solid block and material library, then we're able to kind of build off of that. So that was a huge win for us.

I think for us, it's the virtual sampling process. And also, it helped our team to adapt to digital work environment that allowed them to be able to work online or in a hybrid work environment. It helped them to be more creative as well. We find when you scale it up, reach out to different team, they have new tools they will feel they're more empowered to do creative work. Yeah.

So why at scale? Unfortunately, if it's not at scale, I don't think that we would get a buy-in. So it's the only way that we can get a buy-in from the different stakeholders. It needs to generate value. And the only way that it generates value is if you actually do it at scale and you can sustain it to do it at scale. On our end, the bigger wins, we did it a little bit more difficult than a lot of people, is that our bigger wins are on the salesman sample end. On the end that we're leveraging our 3D assets to be able to showcase our collections and all of that. We're also going to get, because we're not in the point where we would need to be on the virtual protos and things like that. We will get there. I'm very confident. But for us, it was being able to get a quick ROI behind the 3D because that was very important for management at the beginning, was to be able to generate value fast. And I think that by us being able to generate that value fast, we got more buy-in by different teams.

So interesting. And you did bring up that ROI. So things like shortening the calendar, virtual protos. Did we all get an ROI out of 3D so far?

I'll take that one. So we did get it. So we're in the salesman sample and we definitely get an ROI. We're able to showcase the ROI and it's very black and white what I can say. So because it's, it's, it's a numbers game.

You're—

we were doing these many samples. Now we're doing these many samples. We have saved this in 3D. When it comes to Calendar and when it comes to the— it's a little bit more difficult to showcase the actual wins for that. So the way that we're actually trying to showcase these actual wins is that with a very fast response when it comes to opportunities on our end. So there's a very important meeting that our team has with a specific client, and we need to showcase a new collection. How can we showcase it in a way that we don't need all the samples because we don't have samples? So hey, 3D. We're doing this in 3D. So we're showing those gains, and we're showing those value when it comes to that. And that turns into— indirectly turns into sales that also showcase an ROI in, in our end.

Yeah. And then in our process, I think the virtual sampling reduced a lot of physical sample. It's definitely more sustainable. Our ROI numbers shows that as well. And I think it truly make a bigger impact through COVID because a lot of time they don't have physical sample. And I think another point of view, I think there's still more potential to unlock. The ROI, we are currently invested in 5 years. I think more ROI will show when we scale up a little more, introduce it to more team. Maybe in the following 3 years, there will be more return slowly showing.

I think it's all about setting the right foundations to get there. So I think all of us know that there is a potential to go about for 50% lead time saving, right? So I think personally as a company, I think we've only reached about half of that. Or maybe even less, right? But with, I think, about 1 to 2 years into DPC, now we're about a decade, but then we start realizing it. So I think, like Wei said, it's a journey, but I think given with the right foundation and capabilities in place, you'll start seeing the ROI, but it might still be the tip of the iceberg, right?

Yeah.

I think sometimes it's hard to do from 0 to 1. Like once you reach to the 1, it might get easier to do from 1 to 10.

Yeah, 100%.

Yeah.

That first step and that first showcase of the real value of 3D at the beginning, it's very hard. So that's why those small wins, even if they're very small, you need to amplify them and tell them, hey, this is what we were able to do, and this is what we were able to showcase. Because little by little, those small things become bigger and bigger and bigger, and the ROI starts incrementing.

Yeah, I think one of the biggest ROIs we've seen is with our vendors. Getting samples from them now that we went through the whole onboarding process, they're so familiar with our expectations of what the quality should be that it's a lot easier to make these asks and get back a good quality asset without going through multiple digital proto rounds.

Thanks, Megan. Speaking of leveraging our suppliers, in some cases, they are our starting point. I know we heavily leverage our L1 suppliers. It makes sense. They can take a 2D sketch. Sometimes they are our first patterns. What are some of the pros and cons of using your L1 suppliers to help generate and build some of these assets?

Yeah, I will take this one. I think for us, the pro is really efficiency because they can work almost like when the US office went to sleep. And the comms are probably the effort you have to spend to communicate the idea, and then sometimes you will receive unexpected result from them on a limited timeline. So there's definitely time you have to create guideline to provide guidance, to clarify, to go to each vendor that is in your core vendor group to make sure they're up to speed, to provide, um, desirable first round of results.

Yeah.

Yeah.

So I think sitting on the vendor side, right? So a plus side definitely is your vendors are the ones who are creating your manufacturing patterns, right? So it makes a lot of sense for them to play a role in generating the digital assets as well, right? So what that means is if it is done by people who understand physical product and the nuances around it, right, your chance chances of making the most of the technology that is there today to be able to create more authentic digital twin is higher, right? So end of the day, it's helping brands make digital decisions faster. And once you see the physical sample, being able to incorporate what was in the digital asset back into the physical sample, the translation is also very important, right? So I think in that sense, it makes brands' life a lot easier. I think on the downside, right, if you don't mature vendors and you are trying— because you are not, you are not only working with one vendor, right? You are working with multiple. So if you don't have standards, you don't know what you're doing, it will quickly get out of hand, right? So maybe it makes more sense to have— start off with some mature vendors, one or two, set the right standards, and then kind of— because the mature vendors got to maturity because they were working with some other brands as well. So We learned a lot from the brands that we worked at the start. And we took those learnings and gave it back to brands who are starting off so that we were able to help them not make the same mistakes that we made and learned it the hard way. So I think it can go either way, given how you kind of approach it.

Yeah.

On our end, we always want to make things harder for ourselves. I would have wished that we have started with more vendors when we started our 3D journey. The main caveat is that we started very early, and a lot of vendors were not in 3D. Now I feel that most vendors are in 3D, and they have more knowledge. So because we didn't start with our vendors so early in the game, we had to create a side group to be able to think and work as a vendor. That had a lot of advantages for us because we learned a lot about the process internally. We learned a lot about what the vendors are doing wrong or are doing correct so that we know that when we start onboarding vendors, we had a very good, strong support group for them to be able to onboard it. So now the funny thing is that we're onboarding vendors and some vendors are already in 3D and they want to get started right away. And we're telling them like, hold on just a second. We have to set up all the rules and everything for you guys to be able to get onboarded. But now we feel that the vendors are in a better place. But we were able to create that team that in case that we change vendors or vendors are not in 3D or all of that, we're able to react as well. So it's very important to have vendors from the get-go. But it's also very important to have internal talent that can help when the vendors are not in 3D or they're going to take time to get in 3D or things like that. So I think that it's a balance of both that can help. But definitely don't do what we did. Have a vendor. Start with the vendors from the get-go because that, it's going to help your life drastically.

Right. So one of the big use cases I feel like is is when brands are creating innovation garments, like styles that haven't quite been tested, you want to— some new style lines or a new fit. When design teams are ideating in Illustrator or flat sketches, it can be very difficult to visualize how something should wrap around the body or what is the shape or the construction from a flat sketch. So this is where I really think that 3D shines is because you already— you could work with a block, and you can maybe more easily identify or draw on that block of what you want to do, and then share that file with your vendors. And they can create the pattern, and they can create that first concept sample. I think that design teams can take a little bit of pressure off themselves and utilize as a resource, to Wei's point, they're working as we're sleeping because of the time change. So I think it's a way to kind of get a lot more assets if you're working in a more collaborative way. And also some other great points, just then you have the patterns. So now it can be used end to end. So really the concepting, stage is like the ideal place to start.

OK. Well, following up on the supplier theme, it makes sense for the L1s. But we have some L2 suppliers also working in the space. Makes sense for the trim suppliers that are already working in 3D. They just need to optimize it for us. But what challenges do we have trying to get our additional L2 suppliers on board, our fabric suppliers, maybe a label supplier? What benefit is it for them? I know we do a lot of our own material scanning, and I know that that can be challenging, but is there a benefit to any of the L2 suppliers to be part of our 3D journey?

I'll take that one. So of course we want to— I'm not saying that we want to sell the idea that there's a benefit. For sure we see a benefit, and it will be great if all the suppliers are in 3D. I've seen more and more and more during the past year that A lot of trim suppliers, buttons, zippers, and things like that, they're already taking the step ahead and saying, like, I'm going to make libraries for all of the 3D softwares out there. Because they know that it can be a good way to showcase their products. It can be a good way to create faster adoption when designing a new garment or a new project. So I see that they're seeing that instead of having It's like having a constant salesperson of their product with you constantly and be able to design like that and be able to showcase new things. So that's a key benefit. And I'm seeing more that when it comes to vendors like more hard goods. When it comes to Fabric, that's a totally different thing. And that, that's very— I'm not saying that it's very hard, but the— there's still a lot of resistance when it comes to approving fabric digitally versus approving fabric physically. And that resistance, I believe it's because of the way the industry and the way that we make decisions. The people that create the garments, they still want to touch and feel the fabric, what I'm designing for, what I'm doing for. And sometimes if you're not able to have that touch, even if you have a video or you see the simulation, that that's still very hard to make a decision. So I feel that the fabric portion, it's a two-way street. It's great and it's needed to have all of this fabric digitalized. But when it comes to a new fabric or something that it's totally new, the digital portion, it's not going to move the needle that a lot. The physical, it's still to be there. So that's where we are.

OK. Kind of following along on that theme as well is different trend suppliers, different vendors. Are they all using different tools as well? How can we manage— you have one supplier in CLO, one supplier in Browzwear. You have one person using Visu. You have somebody using something else. We have Closet. We have Style Zone. We have library management. PLM. How are you leveraging all of this?

Did you list all of them?

Did list them all down.

How can you?

And a lot of them are still developing. Like, you cannot really tell how well is the CLO fabric test result. Even the vendor, you have to qualify them, give them credit, make sure they do the fabric right, validate them. And then vendor could potentially— the mill could potentially have to do both, browseware and CLO for fabric testing. So it's a lot to ask for them. From their point of view, they really just put in the effort, extra work on their point, they don't get enough benefit. The good thing, they can stay on the current, learn what is innovative, but for the long run, I think maybe the material should be standardized industry. We should move in that direction, but that's every year we make that conversation.

I think we should say it out loud. There's a lot of software companies here and we have to say that.

It's the best time to say it.

They need to standardize it. That this game of who's going to be the bigger one and who's going to take the market, that's not going to happen. And at some point, somebody very smart, it's going to go out there and it's going to create something to standardize all of this. And it's going to take their meal. And so yes, we need standardization. And I know that the 3DRC has been working on standardization of fabric because this is a topic that we have been discussing for the longest time because we see the need. I imagine that you guys as the vendors sees the need because it's impossible for us to ask for everybody to have everything that we need. And there's so many options out there. So standardization is a key. I was hearing, I was in the roundtable today. I was here for somebody else that he has a past history in automaking and automaking has been doing 3D for the longest time.

Forever, yeah.

And he was saying that at some point all the solutions became so up to par that the only way for them to be able to grow was to standardize things so that everybody can talk to each other. So I think that we need to get to that point. We need to standardize. If not, then we're making it harder than it is.

Yeah.

Anyone wants to chime in on that one?

No, no, no. I think as a vendor partner, Today, right? Because our goal is once we know a brand is strategic and we have visibility into their roadmap as to when, at least which season they're trying to take off some of their physical sampling, take off the parallel workflows, try to migrate to 3D, that gives us incentive to maintain the momentum, right? So if it is what it takes to do in two standards, I think we still do it with seeing light at the end of the tunnel, right? And as a manufacturer, different Brands have different choices of software, right? So as long as we have a set way of making sure how to get to an accurate digital twin, yes, it's our wish list as well to scan once and be able to use in other solutions as well. But at the moment, as long as at least within a single brand you have at least one software, then you have one workflow, right? We sometimes have brands who have multiple softwares within the same brand. So that's not ideal for us. But from a manufacturing perspective, the technology is still evolving. But for our incentive is to make sure how do we make the most of the technology that is there today and make sure we are able to both get a benefit, right? Maybe it's reduced workload. Maybe it's crashing lead time and getting our product right and make sure there is repeat business coming in. So that's our incentive. And as of now, we do do some extra work for the brand, but with the right intention.

OK. All right, I guess just one last thought on that. You know, there are in the intimate apparel space, there are like some needs that haven't quite been fulfilled. And that would be digitizing foam pads with physics. This has been a long conversation. Or also underwires, so I mean, there there are capabilities in the software to make these a nice visual. But the soft bodies are— these are being worked on. But on the garment side, it needs to catch up so that these two things can marry and be a full package solution. And that's where I would turn to the suppliers and their knowledge.

I think that we have a billion-dollar idea here. So any VC that is willing to fund us, come talk to us.

Yeah, we have talked about this endlessly already. And we have a lot of questions we didn't even get to, but we were running out of time and everyone wants their beverage. So to wrap it up, if you had to start all over again, what would you do differently?

You want it? I'll take this one. So there are so many things we can do with digital. And it's really easy to want to solve for all your problems. This can be very strenuous for the teams working on it. So if you want to— when you're starting out and you think, oh, I want to solve for fit, I want to solve for e-com, I want to solve for SMS and lead times, and Everything, it's like all of these goals can be broken down. So I would say to focus on one thing, get it right, and then build off of that.

I have something to continue on that direction. I wish we started the 3D journey with a focus more human-centered. I think the leadership, when they had a vision, they tend to push it from the upper to the lower level. Go to the team, listen to their pain point, see what tools is suitable for them, what problem we can solve, and start from there. The people will feel more empowered to do more creative work that they tend to adapt and then trust to use those new technology as well.

Yeah.

So I'll share two different things. So I think when we were in our honeymoon period in DPC, we used to get excited for every shiny tool. I'm also guilty of that. As we scaled and as of the last few years to going into now to next year, our focus has now been purely how do we make the most of the tools that we have already invested. Because there's a lot of things that we haven't really experimented within the tools as well. Our intention right now is to be very conscious of which tools we bring in because each new additional tool, because it's not seamlessly integrated today, means it can disrupt distract the workflows. It can put things off course. So being very conscious on what we— because it's small industry, but a lot of technology. So being very careful on which ones that can really help us put us ahead of the course. So second one is I think we really realized having a strong strategy in place which is linked to enterprise-level goals. Not just DPC team's goals or design team's goals, but organization-wise, what's on CEO's top agenda, right? And making sure DPC can play at least a small role in that. So having that got everyone's attention, became everyone's problem, and that really helped us kind of put things on course.

I will keep it short. I will onboard vendors earlier in the game, 100%, and build better libraries from the get-go. If we have done this from the get-go, the journey I wouldn't say that it would have been much easier, but it would be more streamlined for sure.

Thank you, everyone. Thank you. Thank you.