Digitizing the wholesale selling experience with Alvaro Pin, HATCH

Technically speaking, we are a team that is 2 years old, but most of the people in the team have been in the industry and in the digital showroom project within PVH for pretty much since the beginning, like for 5 years. I've personally been at PVH longer. It's also one of those realizations where like you're the oldest one in the team, even though you're not the oldest one, the older one.

You've just been there the longest.

Yeah.

But that's a good thing, right?

Yeah, it's a good thing. And also my journey personally is also like not never, like it's been within the Diesel Shop for most of the time, but it's also like being in constant change through the organization. I'm very curious by nature, so I really get bored easily. So the dealership in that way has really kept me for a long time, but that's, I think, also because it's something that really, really makes me passionate about it. It's something that I truly believe in.

So, is that because it's ever-changing as well?

It's in constant change. I think, like, even now going commercial in 2020, a lot of the things that we've done that are very PVH or Tommy Hilfiger, Calvin Klein specific, we're also like putting to the test. So we're talking, you know, like whether or not the things that we're doing now that we kind of like think make sense, whether or not they still make sense when you actually put a price tag and put a sort of like a service next to it. So in that sense, if anything, what I love about this job and this product is that it never gets you bored.

Yeah, absolutely. It's interesting because people want to break down silos these days to enable digital transformation, and PVH are certainly doing that, but they are creating new branded departments within their company to do it.

Yeah.

It's an interesting approach.

It's, yeah, I think it's a very interesting one, and probably some of the people within PVH have some more knowledge as to how that works. From my perspective, I think if anything, the Digital Sheraton really brought the mindset to BBH that they can do things differently, that they can actually go outside of the comfort zone, so that not only collections is the things that they can actually do to add value to what they do and potentially to the industry, and things like how the team structure, things how the technology and business teams that now operate and keep on evolving that relationship is also something that has drastically changed in 5 years. From that service mindset where the business requests something and then the IT teams deliver something 6 months from then and then it doesn't make sense because 6 months from then everything has changed. Now it's really around setting this model where teams are in constant collaboration and even though there's still silos because big organizations come with the challenge that communication is never gonna be completely fluid. But the reality is that at least there's a lot more touchpoints where I am much more aware of what people are doing across the, across the company than ever before. The thing is that there's some areas that have so much potential and have so much opportunity to not just be kept at PVH, and those are the areas like Hatter Stitch, where really the, kind of like the positioning of us is we need to really create our own entity, our own identity to make sure that we also can have the ability to build our own vision. And that can really tie into PVH, but we also need to do it in a way that it ties into where we want the industry be. And that sort of like duality is something that really explains the differences between kind of like being a department or being an actual team that kind of like spin off at some point and move away. I think that's also something, and technically you could do it with anybody, but with any department, but I think indeed in some of the areas we do see that if you, our COO mentions very often that that we are in the making of something. And because we are at the forefront in some of what we do, like with the Digital Showroom, we just need to bring it out there to move people forward. Like, if we should not just expect everybody to just drive change, if we actually have the chance to provide that support and that help, I think that's also one of the things that we aim for. Like, that do you like the Digital Showroom? Then great. Actually help you get better at doing wholesale selling.

Yeah. Is that, um, I wanted to ask kind of what your most exciting part of your role is, is that the digital showroom or, you know, are there other things that are really exciting for you at the moment, maybe for the future as well?

I think right now the most exciting thing is things like what happened yesterday here at BI. It's the fact that I get to talk to so many brands, that now we can openly start engaging in conversations with brands that are in different parts of the journey, learn how they do things, show them how we do things, engaging more meaningful conversations where you can actually talk about potential integrations or potential setups where they might actually be interested in the Deal Showroom. And yes, obviously the Deal Showroom, it's, I think, kind of like the backbone of all of this because it's something that gets me really excited, everything we do. But I think right now is the fact that we have this ability to talk to all these brands. It's one of, for me, one of the most exciting things. At this point in time in my role.

Yeah, what kind of conversations were you having yesterday?

Well, yesterday I got a lot of people kind of like coming to me about my presentation, which was a first and was a really positive experience. So that's something that I'm gonna keep very close to my heart because it was really, really, really inspiring to hear people talk, coming to me and talking about their journeys and at least relate to what I was saying, so that was great. But it was also, there's some brands and some people out there that when you start talking to initially, like at the very beginning, you have that click and you start like spiraling around ideas and brainstorm and like potential collaborations, technology ideas. And yesterday with a bunch of them, the conversation like easily went into like an hour long And then at some point you're like, okay, I really need to find my team. But, and that's, I think also like what I also really like about these things is that you sometimes, you engage in conversations where you really want to see if the digital showroom could be of value to other brands. But some of the times you also find that the value is there, but there's so much more that actually people start talking about what would happen if you do this, how might we actually achieve that goal? And then you start really engaging into that very creative and innovation mindset, and that is just really fantastic. I love it.

Yeah, yeah. It's great when you get into that deep conversation. I mean, for one, it's just great to have so many people in the same space.

Especially when you say you are actually now in the works to get something out there, to make something commercial, kind of like people are very— sort of like sometimes you see both ways. People interested, or also people automatically looking at you as a potential competitor, even though We haven't, I haven't seen anything that looks like our product here. And actually we don't want, we're not in the making of building everything. We're here to provide value in a very specific area and partner with everybody because that's the best way to achieve that sort of like seamless journey and standard baseline that really helps to create and achieve.

For sure. I mean, there's so many aspects to this whole world that we live in that you can't do it all.

You know, and you shouldn't. You shouldn't because why, why, and this is something that from my perspective is something that only damages the industry. You cannot build an all-in-one solution and expect people, or sell the message that this is actually what really brings sustainability or efficiency into fashion. Because efficiency doesn't come by locking your customers in. You need to provide, you need to be clear about your value, but you need to be open about the fact that industry, an industry like these and companies the size of the ones that we have at PI cannot rely on one single point of failure. It's just like too big of a risk, but also that doesn't provide that flexibility. So it's also like with other, with some other partners here, like it's really easy to talk to because, and other brands, because like automatically we're all in the same page. We're like, I'm not in the making of doing XYZ, I'm in the making of doing digital showroom. And This digital showroom doesn't exist in a silo in a fashion company. Fashion companies go through steps A, B, C, D, all the way to the end, which means that I'm here to give you value in this perspective. But then I'm also curious to know how can we actually help these to provide value before and after? Because that's the only way to actually be open about making really meaningful change in the industry, not by like just providing something that basically just gets people into it. And if not, then you're screwed.

Yeah, exactly. Because as you say, you're just providing D, you know, and you need all the other letters. So you work with all the other people as well.

Yeah. You know, and that's also with Stitch, with our colleagues from Stitch. That's also the great part of actually, you know, like having somebody also close that does something around, for instance, digital creation where we get to experience and we get to collaborate and just also have these brainstorm sessions where like you you don't focus on like, what's in it for me only, but you actually look into the cool potential opportunities of like actually bringing the best of both worlds. And I think that's, it's also one of the most fun things to do in these jobs, the opportunities to actually get people that do something within your same field, but in a different, with a different angle. So you can actually make both things better to ultimately just make things better for anybody.

Absolutely. I think generally what you see is a very collaborative atmosphere.

Yeah, yeah, completely.

What is the digital showroom then?

So, in the fashion world, one of these aspects of the industry is wholesale operations. A lot of these brands, a lot of, including PVH, one of their business critical aspects is those key account moments where like those strategic partners and strategic accounts of the likes of Zalando, El Corte Inglés, Bain, Korpik Kloppenburg actually come to the showrooms and in a way have that one-on-one experience with their sales, between sales teams and buyers, and actually preorder what the collection that is about to hit in a couple months' time into the stores. And from very, for a very, very long time, for decades, The way to actually conduct that process was to create, to physically produce a collection, put it out in all the showrooms, and the more you want to grow and the more you want to distribute globally, the more you need, the more showrooms you need, the more samples you need to produce. And the more you want to grow, the more samples you need, the more showrooms you need, the more salespeople you need. So as you can see, this equation, as you go into a market where the industry is trying to make things faster, but at the same time consumers are telling us to be more sustainable, that is an unsustainable situation. Yeah, it's not efficient. The equation is not efficient for the company. But it's also not sustainable in the long run for neither brands but also for the planet. We're not— we're one of the most toxic industries in the world. And I think it's also good that now we're all starting to realize from a brand perspective, from an individual perspective, from a consumer perspective, that this needs to change. There's no more wiggle room to be able to actually just think about trying to discover and trying to guess. No, we need to act and we need to act by actually doing it together. So in all of this, our CEO had back in the days this kind of like also like this, this is enough kind of moment. He comes from the sales background, so he actually really knows how the process works. And also being a huge fan of the automobile industry, he knew that there were already some brands out there doing digital showrooms in their industries that really helped eliminate the need to produce physical samples in the case of the car industry, cars, to actually sell cars. So he was also that came with this idea or his vision of why can't we do something like this, or what do we need to do to eliminate samples of the process. And with that idea, he just went into the company trying to pitch it like in pure started fashion, just like understanding, like, well, I cannot really do this on my own and I cannot just impose somebody to do something because also I don't know what to do. I don't know what's best. I need some— I need the team to believe in this. That's how our team started and that's how the Digital Showroom started. So for us, the Digital Showroom is truly a wholesale selling experience aimed at replacing that traditional approach where salespeople and buyers actually conduct sales through using samples, and we do it by creating an experience where all the collection is digitized, all the content is created to really create not only a collection that is available everywhere at any time instantly, but also provide a framework where things like brand message, storytelling, brand alignment, all of these things become much more important because no longer you have to rely on your local teams to be able to convey the right message for that season. Now you have a centralized team that is able to actually cater that message all the way at selling instead of actually only focusing on it when the consumer is about to get it on the stores. So, it also creates this huge synergy in terms of the understanding of how the collection is going to impact. And I think for us, rather than the software, is obviously one of the things that was super, super important to keep in mind because you're basically telling sales guys they're not going to have samples. So, we got a lot of people pretty much upset. But people like to touch things as well. Yeah, exactly. So it's one of these dualities where like we are trying to make, to sell digitally one of the most tactile things in the world. Like you wear it, like there's nothing more tactile and more physical than that. But regardless of that, we knew also that keep on doing the same things, it was just impossible. And also we also realised that some of the challenges out there for us to be able to, you know, to be closer to market, to be more efficient, to also reduce waste. Wholesale business means that you have to create a bigger collection because your customers are not going to buy everything, which means that you need to create more in order to sell, to reach your targets. So trying to make sure that that funnel becomes much more balanced so, you know, through better interactions, better data, you can predict better, you can create better forecasting. So ultimately, you know, what you produce is going to be sold. And it's in a way kind of like also looking at that beyond Samples. So Samples was a big igniter, but the Digital Showroom also helped us see that there is so much more, that when you actually move things and bring technology into the process and you create an experience that goes between people still in the room sitting together but actually conducting their negotiations, their meetings through a digital experience, that we realised that the brand was being way more powerful because customers now knew what the collection was— not what the collection was about, but also the meaning, the purpose behind it. So it was not about this polo has this technology, but it was about this is a story about this polo and this is how the polo came to be. So when you actually tell some things like this, it becomes easier because customers get more engaged and means that you're already putting your effort as to create that brand content and brand storytelling at selling, so by the time you hit your stores, you have a lot more time to actually think about these things. And it's a cadence that becomes more sustainable because teams actually have their resources spread much more efficiently, rather than, "I'm focusing on getting these showrooms ready for samples, now all I have to do is work on my strategic vision for the season." So, it's also a shift of mindset. And then ultimately, People were really upset in the beginning, but in the long run they realized that they saved hours a day per appointment. We had key accounts coming over for an entire week and then with the digital showroom they would be leaving on Wednesday.

Yeah.

So when you start seeing these things, you realize that, hey, actually there is some value here beyond samples. And actually, if I can conduct my appointments without samples, might be a little bit of a challenge in the beginning, but if I'm saving myself 2 days that I can spend on either preparing for my next appointment, preparing better for this appointment, or actually checking numbers to have a better plan for next season. These are the things indeed where like you start with samples but you indeed go into every piece of value. So ultimately, that really goes beyond that.

It's not just the overview that is helping, it's actually the sort of the macro.

Exactly, exactly. And I think with the DealShare indeed is a piece of software that we're really proud of because I think that experience is really kept. In a way that it's super easy to use but really engaging. But it also is an experience that transcends the software where we have a lot of this know-how and transformation mentality where we, in order to implement it, is not just rework an entire showroom, actually bring a bunch of machines and then so be it. It's actually the proper onboarding training, helping teams actually go through change and it's really taking the software but really putting it into a space where sales teams actually want to use it, because that is the best way to actually get something from just being cool software into a meaningful driving change force.

Absolutely.

So yeah.

I want to ask about, I guess you still work on seasonal wholesale, right?

Yeah.

I feel like that may change in, whether it's in a few years or in 10 years or in 20 years, but eventually—

It will.

It will. This will be fairly radical for Hatch and all people who work in these kind of departments.

One of these kind of sort of like elephant in the rooms, I think, for most of wholesale-driven brands and also for Hatch, because obviously we're running on improving wholesale selling. We kind of believe that for us, more and more towards the future, We're going to be dealing with sort of like just-in-time collection selling. And in order to be able to do something like that, first of all, there needs to be a lot of data to be able to do it in a way that matters, in a way that it's actually valuable. So probably you won't be needing to spend so much time on designing, merchandising, planning ahead of a season. Probably there will be a lot of automation that helps through data to actually empower decisions. So almost you have designers working on higher-level creative concepts and then using technology to basically just create collections. So all the work around is actually, let's say, fine-tune things. But things like personalization, things like customization through technology, you have here brands right now on the stage these days talking about those things. You might also be able to be flexible at selling, where a customer just comes in, wants to see what's going to be ready maybe next week. So they're going to actually get it produced in microfactories. So like this entire model is indeed something that's going to be different. But I also think the relationship between a retail brand, fashion brands, and wholesale customers is also going to radically change. Because now a lot of those relationships is based on, first of all, on decades-long contracts and agreements. So obviously that is already the other topic that that isn't discussed all the time. But secondly, it's also, it's a model where consumers are not really bought into. Like, consumers are more and more into experiences that brands provide them, and wholesale partners most of the times really struggle to create a space where all these brands have that unique value proposition. And the only way to be able to provide something like that is actually creating the wholesale business, making more of a technology platform. Where things like El Corte Inglés or Buyncorp will be able to actually provide a platform where your data can be distributed across and ultimately give you an opportunity to put your collection in more places because ultimately the physical and digital world are something that will probably not go away. We still will be happy to actually try something on, browse something in, and maybe go online, maybe go offline. This is still like a human nature. Like, you never buy things on the first try. You usually just like get an ad here actually check something online, maybe one day look at another store. But that journey from a technology perspective is now broken. If I buy something at a department store from a specific brand, I will never be able to have that order in my profile of the brand if I happen to be a big consumer or a big fan of the brand. And I think that journey is indeed where wholesale is radically going to change from shorter production timelines, almost to just-in-time.

Yeah.

Massive technology disruption in customization, data-driven e-commerce, artificial intelligence, machine learning, microfactories, microproduction.

But it's— but there's still— you're only as good as your weakest component in all of this chain, and we're still running, you know, credit card payments on 50-year-old code as well. And so until, you know, every node in the value chain is up to scratch from a technology perspective, we won't be able to enable this kind of thing where if you bought that lovely jumper in wherever you bought it from and it goes onto your credit card and therefore that transaction code then goes onto your account from that store and or into maybe a general apparel account that you'd have on your sort of, on your profile. You know, these are the kind of things that would enable it from a consumer perspective. I know that you're focused on wholesale, obviously, but these are the interesting things that can come around.

Yeah, that's true, but I think also, and that's also what's becoming really interesting about these things, is that by being closer to market and by being, so by reducing sort of like the gap between brands and consumers, which in this, in, through history has always been your wholesale production, by shortening that gap, that also means that the consumer's voice becomes way louder. And the closer you get, the louder it becomes, and also consumers are also becoming much more powerful as to driving decisions in brands than before, because new generations don't cope with, excuse my French, bullshit around particular things. So even though if it's a consumer-driven tactic, consumer-driven decision, things like sustainability, those things are driving, really, really driving for a change force in the industry because consumers no longer will actually accept certain things that have been established here. The technology indeed might need time to catch up, but I think also one of the good things about the current setup is that it's only going in a space where consumers are having more and more of a voice, and that voice is ultimately what drives money, what drives revenues. And when you're talking of things like that, it's something that ultimately makes people push forward faster and harder.

Yeah, for sure.

So, and there's obviously a lot of other sort of like trends that go beyond the industry, the fashion industry. But indeed, I think consumers will probably also help shape more and more the wholesale business.

Yeah.

Because I think they've already been doing it a lot, and I think they will keep on doing it. And I think that would also be sort of like the driving force that will help a lot in terms of getting customers, technology providers up to speed.

Yeah, well, it's a two-way street, isn't it? You know, you're influencing them and then, you know, kind of waves hit you back as well.

And I think it's also, I think more and more they're asking for that transparency and I think more and more it is being given to them, but there's still areas that we can do a better effort as to explain how those processes work because the more, and for instance, you had teams here yesterday showcasing how they actually produce denim that's completely A complete circular denim.

Yes.

That level of transparency at scale drives change in the industry because consumers see what needs to happen in order to get something, in order to actually wear something. And the more they know, the more their requests change, the more they request it to be fair, the more they actually don't end up buying your product. And the more these things like this happen and the more they keep on happening at a larger scale, the more we, the more also from our, from our end is where we are in need to actually provide that value. Yeah, because otherwise, otherwise you die. Otherwise you're not, you will not be in the competing.

Yeah, yeah, absolutely. Avara, it's been fascinating to chat to you. Thanks so much for joining.

Thank you. Nice to have me.

Cheers.