Demand Manufacturing & Sourcing Glossary

September 13, 2018 Leave a comment

 

 

William Grier

William Grier

 

The most important aspect of today’s evolutionary shift from the mass manufacturing of the “Industrial Age” to the promises of the “Digital Age” is the advent of Demand Manufacturing and Sourcing capturing the impact of sustainable high profits through “Virtual Inventory” (VI). This opportunity to tie production directly to sales minimizes wasteful over production and the resulting environmental impact while providing a quantum jump in product choice and wholesale and retail profits.

Demand Manufacturing is divided into two production paths that are defined by the customer. Individual pre-paid consumer custom products are produced using Purchase Activated Manufacturing (PAM) and wholesale production that replaces actual retail product sales in store or on line is called Demand Sourcing (DS). 

An Integrated Mini-Factory (IMF) is capable of both manufacturing pathsDemand Sourcing allows the online or brick and mortar retailer to operate in the dream state of “never out of stock and never over stock”

Here are some of the terms used to describe the elements of Demand Manufacturing:

Active Tunnel Infusion (ATI)

A permanent coloring process developed and patented by AM4U, Inc. that uses clean physics with no water instead of chemistry to dye and/or print fabric.

Color Space

Display monitor screens are portrayed in pixel based Red Blue Green (RGB) color space. Digital printing appears as dot arrays of Cyan, Magenta, Yellow and Black (CMYK) color space.

Color Cone

A graphic representation of all the factors required to be in alignment to reproduce matching colors job to job and/or between digital printers.

Color Profile

An ICC profile is a RIP translation table that provides RGB, CMYK or Lab color values directions to the nearest CMYK printable value for each color. Profiles are not used for color correction on a file-by-file basis.

Configurator

Software used online to modify an image or product. Usually used to change the color and/or embellishment on an item pictured in a catalog or customizing display.

Cost of Goods Sold (COGS)

The cost of product is calculated as the total cost of wholesale products actually sold and shipped or retail products actually purchased at full or promotional price. “Cost of goods sold” replaces “cost of goods”

Cost of Units Sold (COUS)

In demand manufacturing units are not produced until after they have been sold. Since there is no pre-financed physical inventory the cumulative cost per unit is calculated as product is produced. “Cost of units sold” replaces “cost per unit”

Custom Stock Unit (CSU)

This inventory designation represents a personalized product appropriate for sale to a specific individual or individuals. In unit manufacturing there are very few situations where a CSU exists without the actual sale already in place. Forecast based CSU’s that remain unsold represent the largest risk of inventory liability.

Days of Supply (DOS)

The speed of product throughput and shipping determines how many days of supply the production line needs to manufacture to successfully manage the consumer available inventory so that at least one of every offered SKU is available during the selling cycle. DOS replaces “inventory levels”

Demand Sourcing (DS)

Buyer’s restocking order caused by retail sales rate and DOS

Digital Core

The digital core of a product is the descriptive binary data that never changes whatever process; assembly or logistics instructions are attached as variable instructions to the digital core. This is part of the Tech Pack for apparel.

Digital SKU

Once products have completed the design and development process they are registered with a design number and stored in a digital folder of SKU marker sizes. Once a production style is in the digital inventory it is ready to be assign a search path and added to the Virtual Inventory (VI) for production on demand.

Digital Support Instruction (DSI)

The DSI for a product is all the supporting materials inventory information required to produce one or many of that particular SKU. In order for the DSI to be to quickly available to the active scheduling roster, the integrated GSU status and ERP (see below) must be current.

Digital Twin

The “Digital Twin” is a sophisticated virtualization model developed by Black Swan Textiles to compare and facilitate existing systems. A factory utilizing the Digital Twin methodology has modeled all manufacturing equipment, operators, and processes, enabling it to simulate the operations necessary to assemble any particular product.

Direct to Garment (DTG) & Direct to Fabric (DTF)

Printing machines that print directly on finished garments (DTG) or directly on fabric roll goods (DTF).

“Endless Aisle” Retailing

A retail display using a touch screen, body scanner and video mirror to offer endless VI choices to a consumer. Displays can include a try-on product that can be visually customized and produced for delivery through store pickup or home.

Generic Stock Unit (GSU)

This inventory designation is normally used for items that can be assembled into a number of different products. Although GSU’s are usually roll goods or parts in their basic form (greige or PFP fabric) the designation is also used for items, which are partially assembled but still may be used for many products.

“Grays”

The sewn and finished blanks used to confirm the fabric, fit, production speed and process steps for a specific silhouette. Grays are often part of an “endless aisle” display or are used as a merchandising tool to reduce returns in swimwear

Inkjet Textile Printer Classifications Based on Throughput

Class 1 speeds of 5–30 linear meters/hour

Class 2 printers with speeds 31–100 linear meters/hour

Class 3 printers with speeds 101– 400+ linear meters/hour

Class 4 single-pass printers with speeds of 1200–6000 linear meters/hour

Integrated Mini Factory (IMF)

One of the key features of an Integrated Mini Factory is that all of the coloring, printing, cutting, sewing and fulfillment are under one roof. This allows for the ultimate in “lean” manufacturing because the minimum can be one custom unit or a multi unit retail replenishment order that matches consumer sales.

Job Tracker

An optical reader and / or a RFID signal track each job and piece through the production path.

Landed/Duty/Paid Cost (LDP) 

Actual cost of imported products including: materials, labor, transportation, duties, forwarding, warehousing and internal distribution.

Linearization

Linearization is an iterative process used to control dot placement for each color for a particular device, ink and substrate using software and press settings. This process balances the primary colors and dot placement. It is performed before ICC color profiling.

Merchandising Mirror

Also known as a “magic mirror” this is a retail VR merchandising tool with a large flat screen that visualizes the consumer dressed in product selected from a virtual inventory and usually carried in the store or available online. Some “mirrors” also act as scanners to determine the proper size for the shopper.

Micro Merchandising

Using social media and other online aggregation tools to identify and target specific silhouettes, colors, fabric and decorations at special interest individuals and groups.

Point of Asset (POA)

Point in the production path when a GSU is transformed into an irreversible SKU awaiting sale. Items passing this point are a liability until finished and shipped even if they are pre-purchased.

Purchase Activated Manufacturing (PAM)

A pre-paid purchase order, usually individualized, that triggers a production event.

Process Integration

Building the bridges between separate technologies to produce a demand-based seamless path between product design, sales and marketing, coloration, cutting, assembly, finishing and fulfillment. Connecting these developed products requires technology, technique and field experience.

Product Cycle

Once a style folder is registered, the product cycle can begin, usually with sales samples followed by initial stocking orders. Replenishment orders follow based on actual consumer “take away” until the product can no longer sustain the merchandise turns to maintain its place in the retail store inventory.  Depending on the terms of the replenishment contract the style may remain in a digital catalog for individual ordering.

Product Performance Index (PPI)

The predetermined index of product velocity (turns) times gross profit that a current product must meet to remain active (e-tail) or on the shelf (retail). If a product does not meet this index its “digital instruction” in the Virtual Inventory is retired but still available on order. Maintaining a continuous table of PPI tracking by SKU is the key to increasing sell-through and maximizing profits. GP x Turns=PPI

Raster Image Processor (RIP)

The RIP is the Raster Image Processor software that translates the pixel based RGB color on the display screen to printable CMYK color and resolution for actual production.

Replenishment Contract

The basic document that describes the criteria for production of a particular style is the replenishment contract. This document sets the DOS standards for order content and logistics timing as well as finishing, packaging and order fulfillment.

Single Pass Inkjet Printers

This digital inkjet platform uses a fixed array of printheads that print as the fabric or media is fed beneath. They are faster than rotary-screen unit but can cost millions of dollars.

Scanning Head Inkjet Printers

Scanning head inkjet printers print by moving the printhead carriage back and forth, indexing the fabric after the head completes each pass.

Style Cycle

Design and development of a Style Group (see below) involves the traditional process of pattern making and new process of fabric building. Pattern making is the traditional process of determining the shape and look of the garment and then the grading and reduction of the garment to a digital cutting marker for production. Fabric building is the selection of the white fabric style (silhouette) and the printing of decorations and colors to determine the print choices, which will comprise the style group.

Style Group

A Style Group is a single or group of garment silhouettes that occur in preset graded sizes on the same white fabric. The customer can choose from preset or custom print or color. Since process color cost is constant, one of the key merchandising advantages of digital production is the ability to change colors and prints on the fly without additional cost in a single style group. This allows the brand sales force to offer exclusive prints to each retail buyer.

Style Contract

A Style Contract set a total purchase volume then allows a buyer to change the decoration and color of a SKU within the Style Group on short notice without penalty. This flexibility allows merchandisers to correct for a slow or non-selling SKU.

Stock Keeping Unit (SKU)

This inventory designation is the first product cost point on the consumer side of the POA (see above). Products at the SKU stage can represent assets if they still can be customized to add significant value, but they generally represent the first level of inventory liability.

Selling Cycle

The period of time a retail product is on the shelf before it is retired because it cannot maintain the predetermined PPI.

SMART Book

The Style Marker ART (SMART) book is a manufacturing quality control tool that contains all the customer approved process samples needed to check the production quality at each station in the manufacturing value chain.

Tracking ID (TID)

The TID is an order number assigned by the ERP or PLM schedule software that appears on each piece of a garment and is removed when sewn. The TID creates a continuous reference to the VI data (see below) and the product tracking dashboard.

Virtual Inventory (VI)

The VI is the searchable digital warehouse of SKU’s and configurator resources.

This 9/11/2018 update courtesy of definitions contained in articles by:Johnny Shell, Vice President of Technical Services, SGIA       Dr. Lisa Parrillo Chapman,North Carolina University Mark Sawchak, Expand Systems     Vince Cahill and Claire Hunter, VCE Solutions

More information available at AM4U.com

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eBAY MAIN STREET Blog August 2018

September 7, 2018 Leave a comment

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Blog

August 31, 2018

Voters Choose Nominees In Primary Elections

Voters in Arizona, Florida, and Oklahoma choose nominees in final 2018 primary elections.

August 30, 2018

eBay Hosts San Jose Mayor At Company Headquarters

eBay partners with the Silicon Valley Leadership Group to host a discussion with San Jose Mayor Sam Liccardo.

August 29, 2018

Mexico Raises De Minimis Threshold On Imports

This week Mexico announced it would double its de minimis threshold as part of a revised trade agreement with the U.S.

August 27, 2018

eBay Stands Up for Small Businesses in Letter to White House

eBay asks the White House Task Force on the United States Postal Service (USPS) to consider small businesses and rural Americans as they craft their report on reforming the USPS.

August 24, 2018

Midterm Primary Season Winds Down

Florida and Arizona contests up next.

August 17, 2018

August 14 Primary Tops Weekly Campaign Activity

The August 14th primaries featured a number of key nomination races.

August 14, 2018

eBay Welcomes Senator Catherine Cortez Masto to Headquarters

eBay hosts a productive discussion with Senator Cortez Masto on a variety of important topics, including Internet sales tax and trade.

August 10, 2018

Ohio 12 Special Election and August 7 Primary Highlight Week

August 9, 2018

Technology Can Help Counter the Forces of Economic Concentration

While the overall U.S. economy is on one of its longest expansion periods in history, widespread concerns continue that too many communities are being left behind.

August 3, 2018

Primaries And Special Elections Kick Off August Campaign Schedule

Tennessee primary and Ohio special election start off the August campaign schedule with a bang.

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5 trends in mobile payments

September 7, 2018 Leave a comment

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UNDERSTAND YOUR FINANCES

Businesses move toward convenience of quick payment options

“The Future of Money,” a new series presented by Chase Pay®, showcases how our relationship with money is evolving—and what you need to know.

Make the most of your money.

We’re starting to get comfortable, so look out.

Today, nearly half of US consumers have used a mobile device to make a payment, according to the Pew Charitable Trust.

“Mobile payments will only continue to grow,” says Rishi Taparia, vice president of business operations and strategy for Poynt, a Bay Area startup that’s building a smart payment terminal and open commerce platform. “As silly as it seems, it’s faster for you to use a device to pay than to reach in your pocket and pull out a card. And that makes a difference.”

As consumers become increasingly comfortable, mobile payments will become more convenient, secure and seamless for customers and businesses alike. Here are five mobile payment trends to watch for in the near future:

1. Bluetooth gets a bigger role

“Bluetooth” may call to mind those once-ubiquitous earpieces or, more recently, technology that enables you to pair your phone with your car stereo or portable speaker. Now, that same technology empowers consumers to make easy, fast mobile payments—without taking their phone out of their purse or pocket.

“The best kind of payment experiences are the ones that don’t exist,” Taparia says. For example, the automatic charge as you exit an Uber.

2. Mobile payments move to the cash register

Retailers are increasingly seeking ways to create in-store experiences as seamless as online shopping—and on-site mobile payments will play a big role.

“Retailers who don’t soon implement mobile payment solutions will fall behind and risk losing out on sales,” according to Vend’s 2017 Retail Trends and Predictions report. That’s why banks and tech companies are partnering with retailers to create in-store payment options on their apps. For example, Chase Pay allows customers to show a code at checkout to pay at select stores, and their account is then billed.

Chase Pay also integrates card loyalty so Chase Ultimate Rewards customers can choose to redeem points at checkout. And in some cases, customers can avoid the register entirely by ordering ahead from thousands of restaurants across the country and go straight to picking up their food.

3. Digital assistants make your purchases

Sure, your phone’s digital assistant looks up the weather forecast, streams your favorite song or calls your best friend. But it also can order a pizza with extra cheese, reorder your favorite dish soap or make other purchases for you.

These virtual agents will account for the majority of commercial interactions by 2020, predicts Gartner, the technology research and advisory firm. Taparia sees artificial intelligence and voice-activated assistants allowing customers to place verbal grocery or restaurant orders with instant, no-hassle payments.

4. Biometrics add security

Payment security is moving far beyond passwords. India and Brazil are some of the countries that have leap-frogged the US when it comes to using iris scans, thumbprints and other biometrics measures to secure mobile payments.

“In the US, we have so much legacy technology,” Taparia explains. “We also need to change cultural opinions around privacy and security.”

But change is coming. In fact, consumers will spend $2 billion this year through mobile payments using biometrics to authenticate, up from $600 million last year, predicts Juniper Research, a digital market-research firm. Savvy businesses—and consumers—simply can’t ignore that.

5. Business-to-business can put checks in recycle bin

Today, 41 percent of business owners say that they still write checks to pay their bills. Why? Because their vendors and suppliers don’t accept electronic payment.

The business-to-business space is ripe for disruption. For example, what if business travelers could link corporate cards to their mobile devices? Taparia notes that there’s also much potential in the business-to-business transaction space for connecting systems as well as enabling seamless ordering and payment for supplies and other vendor services.

Mobile payments are not only here to stay, but they’re also getting more advanced and convenient every day.

“When the vast majority of places use mobile payment,” he says, “it will become easier for consumers to use it as well.”

Chase Pay logo | Learn how you can get more than you pay for with Chase Pay®.

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UNDERSTAND YOUR FINANCES

What you need to know about credit health

You know your birthday and zip code, as well your phone number. But, unfortunately, many people don’t know their credit score. It’s one of the most important numbers in your life. A good credit score can impact the type of credit card you can get, the rate on your mortgage, the apartment you live in—and, even the job you can qualify for. Thankfully, unlike your age and your birthday, your credit score is something you can totally improve, over time, with hard work.

We’ve compiled some of our best stories about credit—check them out for tips on everything from finding out your credit score to improving your score, and preparing your credit for your first child. We hope it helps you make the most of your money.

Everything you’ve ever wondered about credit, but were too scared to ask

Are you unsure what a FICO score is and why it’s important? Wondering why you need to worry about credit, even if you’re not buying a house? If you’ve got questions about your credit, we’ve got answers. Here are the basics.

A good credit score can make a big difference

If you’re buying a house or have a credit card, a hundred points on your credit score can translate into thousands of dollars. Here’s a look at how companies calculate your credit score—and how a good one can give your finances a leg up.

5 myths about credit scores: How well do you understand yours?

For many people, credit scores are a mystery, and myths abound about how they’re calculated, what they mean, and how you can improve them. If you’re ready to learn the facts about your credit score, check out our list of common myths.

5 things to teach your college-age student about credit

For many students, college is often the first time they have to manage their own money. It’s important that they understand the importance of budgeting, credit health, and credit scores, which can impact many parts of their life, including their ability to get an apartment. Here are five key things to teach your college-age child about credit:

Building credit when you’re just getting started

You probably already know that a good credit score is your ticket to homeownership, lower interest rates on loans, and a host of other benefits. If you’re trying to build good credit but don’t know where to start, here are the first steps to get you on your way.

Rebuilding credit health: From rock bottom to over 800

A college spending spree started Matt Giovanisci down the path to a bad credit score. Find out how he built it back up, and apply those lessons to your own credit health.

Modern Romance: Finding a partner with a good credit score

A good credit score probably doesn’t make the top five in your list of attractive qualities in a mate. But when it comes to spending the rest of your life with someone else, it can be one of the most important considerations. Here are the key signs to look for.

Even the scores: When one spouse has great credit, and the other doesn’t

Love is blind—but credit agencies aren’t. If you and your spouse have vastly different credit scores, you need to work together to improve your finances—and lay a good foundation for your future.

How I got myself credit-worthy

Looking to buy a house? The first step is getting your credit rating in shape. Here’s some advice from real life mortgage applicants who increased their credit score.

New parents, new purchases: Getting your credit in check

Before you buy the big house, before you pay for college, before you even buy a car seat, you’ll want to start by getting your credit in order. Use this guide to get your finances ready for parenthood.

Chase logo | Chase Slate features work hard to make your life easier. Learn more.

A bed with a nightstand beside it that includes a land, orchid plant and alarm clock.

UNDERSTAND YOUR FINANCES

To save more money, follow these essential tips

For years, a bunch of articles and studies have touted the benefits of thoughtful saving and investing. But this hard work and scholarship ignored a crucial factor: people are irrational, and we don’t often do what’s in our best interest when it comes to the health of our bank accounts.

Helping you save for tomorrow. Learn more

Behavioral economics takes a slightly different perspective. It focuses on how peoples’ behaviors are connected to the way we save and spend money. In 2017, the Nobel Prize in economics went to behavioral economist Richard Thaler for his work showing the link between a person’s behavioral patterns around money and their savings rate.

One of the most interesting things about Thaler’s conclusions offer clear tips for ways that you can start saving today. Here are some takeaways:

1. Make saving automatic

Thaler’s work shows that employees are more likely to save for retirement when their employers “nudge” them to do so. In corporate America, this nudge has translated into a growing number of companies that automatically enroll their employees into 401(k) retirement plans. Some even automatically increase contribution percentages every year.

You don’t have to rely on your employer for the nudge: you can do it yourself by taking the thinking out of your savings. For example, having your bank automatically move some of your paycheck into savings every month is an easy way to achieve your savings goals.

2. Get specific about your saving goals

Another behavioral economics study demonstrated that changing the way you think about a goal can affect how much you save. For example, imagine that you’re saving for a large purchase, like a car. The more precisely you describe the goal, the better the outcome. So, instead of saying, “I’m planning to buy a car,” focus on your ideal and say, “I’m saving for a hybrid SUV with leather interior.” The additional details can help you visualize your goal—and become more motivated.

3. Get more sleep

Studies have shown that getting more sleep can improve your health, cognition and overall happiness. Recently, researchers even connected sleep to income, determining that increasing your average weekly sleep by just one hour coincides with a 1.5 percent increase in wages in the short run, and a 4.9 percent income increase in the long run.

This should come as no surprise, since we all generally feel cheerier and more energetic after a great night of sleep. So, if you’re trying to decide if you should stay up late, think about your paycheck and ask yourself if you’d like it to increase.

4. Start a gratitude journal

Another recent study found that jotting down the things you’re thankful for can also help you save money. According to the study’s authors, focusing on gratitude makes you more appreciative and cognizant of what you have. The research shows that this can affect the way you spend: you’re less likely to try to fill the void with shopping sprees if you practice gratitude for what you already have and value.

5. Save with a friend

If you’ve ever worked out with a friend, you probably already know how much accountability can help when it comes to physical fitness. According to a recent study, the same goes for savings goals: self-help peer groups can provide you with the community and support that you need to help you stick to your saving plans.

Consider recruiting one of your work friends to save with you. Start a blog and share your saving or debt payoff journey, or join a support group of people your age who want to learn how to save more. By making yourself accountable to a peer group, you create external pressure, which can help sway you when you’re tempted to overspend.

Tricks like creating peer pressure, getting enough sleep, and focusing on gratitude may seem like odd ways to change your spending habits. But that’s the key to behavioral economics: by changing the habits that you’ve built around money, you can change the way you relate to it—and the way you save it.

Chase logo | Savings feels good. Reaching your goals feels even better. Learn more.

African American woman sitting at a counter with coffee and a croissant while laughing on the phone.

UNDERSTAND YOUR FINANCES

What young women should know about money

The new generation of young women is changing the way we talk about money. Young single women are buying homes in record numbers, driving the gig economy with a host of side hustles, and transforming the job market as they pursue their professional and personal dreams. As old ideas about the roles of the sexes shatter, they’re transforming the way everyone—men and women—thinks about how to make the most of their money.

Whether you’re on the front lines of the transformation, or are just looking for inspiration for your own money moves, here are some of our top stories on how women are changing the world—and how you can join them.

Why women need to talk about financial health

It’s easy to forget about your finances, only checking in when it’s time to think about big purchases, like a home or a vacation. But building good financial habits can make you happier, healthier, and more secure. Here are some tips for turning healthy finances into a way of life.

This is what millennial women say is holding them back from dream jobs

As young women climb the business ladder, many are looking beyond traditional corporate jobs and focusing on becoming their own bosses. Here’s a glimpse at their goals, and some of the ways they’re working to realize their ambitions.

I’m a single Latina and CFO of my own life

When it comes to money, sometimes you have to get tough. Here are insights from a young woman who took a hard line on her finances—and showed herself who was boss.

Eight ways to manage the cost of boutique fitness

Being budget conscious doesn’t mean you have to cut out your favorite fitness classes. Here are eight ways to enjoy them without going broke.

How this millennial woman bought a home on her own

Last year, 17 percent of homebuyers were single women. Here’s a look at how one of them took a leap—and created a home for herself.

How I got myself credit worthy

Thinking about buying a house? Take a look at advice from real-life mortgage applicants who increased their credit scores.

A student builds her own path with hard work

Even if you have a small salary, you can still have a big life. Watch—and read about—this young woman’s story for making the most of every dollar.

What to do with your wedding cash

All those little wedding day envelopes can really add up. Find out how to turn your one-day windfall into a foundation for a life that you can share.

How to buy your first car

Dropping big bucks on an auto can be nerve-wracking—especially if you don’t know much about cars. Here are six tips for making a smart purchase.

Five ways to get your finances under control in 30 days

Think a month isn’t enough time to fix your finances? These five easy steps will give you a head start on im

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Levi Strauss CEO: Why Business Leaders Need to Take a Stand on Gun Violence

September 6, 2018 1 comment

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Levi Strauss & Co. president and CEO Chip Bergh speaks during the Fortune Global Forum on November 3, 2015 in San Francisco. Bergh says business leaders need to take action on gun violence to help prevent more tragedies like Parkland.
Levi Strauss & Co. president and CEO Chip Bergh speaks during the Fortune Global Forum on November 3, 2015 in San Francisco. Bergh says business leaders need to take action on gun violence to help prevent more tragedies like Parkland.
Justin Sullivan—Getty Images

By CHIP BERGH

September 4, 2018

 

In November 2016, I wrote an open letter requesting that gun owners not bring firearms into our stores, offices, or facilities, even in states where it’s permitted by law. This was following an incident in one of our stores in which a customer accidentally shot and injured himself while trying on a pair of jeans. While that was bad, it could have been worse: The bullet could have killed him, another customer, or one of our employees.

In the days after I published that letter, I received threats to our stores, our business, and even on my life. It was unsettling. But these personal attacks pale in comparison to the threats that activists and survivors from Parkland, Sandy Hook, and daily incidents of gun violence face every time they speak up on this issue.

As president and CEO of a values-driven company that’s known the world over as a pioneer of the American West and one of the great symbols of American freedom, I take the responsibility of speaking up on the important issues of our day very seriously. We can’t take on every issue. But as business leaders with power in the public and political arenas, we simply cannot stand by silently when it comes to the issues that threaten the very fabric of the communities where we live and work. While taking a stand can be unpopular with some, doing nothing is no longer an option.

That’s why Levi Strauss & Co. is stepping up our support for gun violence prevention. You may wonder why a company that doesn’t manufacture or sell guns is wading into this issue, but for us, it’s simple. Americans shouldn’t have to live in fear of gun violence. It’s an issue that affects all of us—all generations and all walks of life.

The stakes could not be higher. On an average day, 96 Americans are killed by guns, and hundreds more are wounded. Most are suicides or unintentional shootings. Our nation’s gun homicide rate is more than 25 times the average rate of other high-income countries. Some shootings make the headlines; some you never hear of; but each one is a tragedy.

So today, on top of our previous actions, Levi Strauss & Co. is lending its support for gun violence prevention in three new areas.

First, we have established the Safer Tomorrow Fund, which will direct more than $1 million in philanthropic grants from Levi Strauss & Co. over the next four years to fuel the work of nonprofits and youth activists who are working to end gun violence in America.

Second, I’m proud to announce that Levi Strauss & Co. is partnering with Everytown for Gun Safety and executives including Michael Bloomberg to form Everytown Business Leaders for Gun Safety, a coalition of business leaders who believe, as we do, that business has a critical role to play in and a moral obligation to do something about the gun violence epidemic in this country. I encourage every CEO and business leader reading this to consider the impact we could make if we stood together alongside the broad coalition of concerned parents, youth, elders, veterans, and community and faith leaders who are committed to shaping a safer path forward.

Third, we know that some of our employees have been personally affected by this issue and want to see change. Therefore, we are doubling our usual employee donation match to organizations aligned with our Safer Tomorrow Fund. In addition, we’re encouraging employees who are concerned about gun violence to get involved. Levi Strauss & Co. provides employees five hours a month (60 hours a year) in paid volunteer time and we recently expanded this to include political activism. We’re encouraging our employees to use their time to make an impact.

I know that Americans, including many of our own consumers, employees, and other partners, hold a wide spectrum of views related to guns. I’m not here to suggest we repeal the Second Amendment or to suggest that gun owners aren’t responsible. In fact, as a former U.S. Army officer, I took a solemn oath to support and defend the Constitution of the United States. But as retired four-star general Michael Hayden once said, “There are some weapons out there that frankly nobody should have access to. And actually, there are some people out there who should never have access to any weapons.”

We can’t insulate ourselves from every threat. We can’t “harden” every place we gather—whether it be our schools, workplaces, shops, churches, or entertainment venues. But we can take common-sense, measurable steps—like criminal background checks on all gun sales—that will save lives.

After the Parkland tragedy, support for stronger gun laws reached 68%—the highest level in 25 years. And support is being sustained by the powerful movement led by youth from Parkland, Chicago, Oakland, Baltimore, and other cities across the nation.

As a company, we have never been afraid to take an unpopular stand to support a greater good. We integrated our factories in the American South years before the Civil Rights Act was passed. We offered benefits to same-sex partners in the 1990s, long before most companies did. We pulled our financial support for the Boy Scouts of America when it banned gay troop leaders.

While each one of these stands may have been controversial at the time, history proved the company right in the long run. And I’m convinced that while some will disagree with our stand to end gun violence, history will prove this position right too.

Our country has faced seemingly intractable issues like this before, but together we’ve overcome them. We can do it again. Together we can put an end to the gun violence epidemic in America.

Chip Bergh is the president and CEO of Levi Strauss & Co. and serves on the company’s board of directors.

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For the Compton Cowboys, Horseback Riding Is a Legacy, and Protection

September 4, 2018 1 comment

The New York Times

September 4, 2018

A group of childhood friends wants to create a safer community and challenge the notion that African-Americans can’t be cowboys.

Anthony Harris, 35, rides his horse through Compton, Calif.CreditCreditWalter Thompson-Hernández/
Walter Thompson-Hernández

By Walter Thompson-Hernández 

March 31, 2018

 

For Anthony Harris, 35, walking to the corner store to buy a soda in his hometown, Compton, Calif., often comes with the risk of being stopped and searched by the police. But when Mr. Harris and other members of a group of horse riders known as the “Compton Cowboys” choose to ride their horses to the store, something entirely different happens.

“They don’t pull us over or search us when we’re on the horses,” Mr. Harris said while riding a dark brown horse named Koda as two police cars slowly drove past him on a recent trip to the store. “They would have thought we were gangbangers and had guns or dope on us if we weren’t riding, but these horses protect us from all of that.”

The Compton Cowboys, composed of 10 friends who have known one another since childhood, but officially came together as a group in 2017, are on a mission to combat negative stereotypes about African-Americans and the city of Compton through horseback riding.

 

The tight-knit group first met more than 20 years ago as members of the Compton Jr. Posse, a nonprofit organization founded by Mayisha Akbar in Richland Farms, a semirural area in Compton that has been home to African-American horse riders since the mid-20th century. Like other nonprofits, the Compton Jr. Posse and the Compton Cowboys rely heavily on donations from alumni, government grants and local community support used to sustain the cost of the horses on the ranch.

Most of the Compton Cowboys were first encouraged to join the organization by friends or relatives who believed horse riding would offer an alternative to gangs and violence prevalent throughout the city.

“When I was 11, I saw a black guy who was washing his horses outside of his home,” said Charles Harris, 29. “I walked up to him and started asking him questions about horses because I had only seen horses on TV before that.”

The man told him about the Compton Jr. Posse. The next day, Mr. Harris and his mother signed the papers and paid a fee to be a member.

Anthony Harris, 35, and Charles Harris, 29, practicing roping on the Richland Farms ranch.CreditWalter Thompson-Hernández/The New York Times

For the Compton Cowboys, living in a community best known for the gangster rap group N.W.A. and high murder rates — 35 murders in 2016, with the crime index being nearly double the average in the United States, despite the fact that it has declined since 2002 — has been a motivating factor in their choices to ride horses.

“We’ve always wanted to give people a different side of Compton besides gangster rap and basketball,” said Leighton BeReal, 28, a member of the group who was born and raised in Compton.

The Compton Jr. Posse, the birthplace of the Compton Cowboys.CreditWalter Thompson-Hernández/The New York Times

Mr. BeReal, who like other members of the Compton Cowboys began riding in elementary school, found that using a horse as a method of transportation through Compton has also protected him from the threat of gang violence.

“If we’re walking on the street and a car drives past us that’s from a rival gang, they assume that we’re from a gang around here,” Mr. BeReal said, while riding alongside Mr. Harris and two other members of the group. “But if they see us on horses then they know we’re from Richland Farms and leave us alone.”

Mr. Harris tending to a horse at the ranch.CreditWalter Thompson-Hernández/The New York Times

Maintaining the horses for casual riding and competitions at the Richland Farms property requires consistent maintenance and a collective effort from the Compton Cowboys. A typical workday for Anthony Harris — who is often joined by Mr. BeReal and Carlton Hook — begins at 5 a.m. with cleaning the stables and supplying the horses with fresh feed. Other members of the group like Roy-Keenan Abercrombia, 26, a full-time chef at a restaurant near Downtown Los Angeles, help at the ranch during their days off.

Carlton Hook, 28, on the Richland Farms property.CreditWalter Thompson-Hernández/The New York Times

While work on the ranch may consist of strenuous physical labor, and occasional horse-related injuries, Anthony Harris uses his time working in the stables as an escape from the realities of a community that continues to struggle with gang violence.

“I was always around shootings and gangs, but none of that happens when I’m in the stables with the horses,” Mr. Harris said while restocking one of the stables with a fresh batch of hay. “There’s peace with the animals.”

 

Still, while the Compton Cowboys believe that they are helping to eradicate some of the negative stigmas of their city, their mission is to also break into a predominantly white western rodeo circuit. The group members have individually tried to do so over the years, albeit with some challenges.

A typical horse can cost $10,000 to $50,000, depending on the breed, but the Compton Cowboys have had to rely on auctioned horses that cost approximately $200, and were victims of abuse, malnourishment and other forms of trauma.

Members of the Compton Cowboys order food from a drive thru in Compton.CreditWalter Thompson Hernandez/The New York Times

 

Resources are scarce, and they often rely on secondhand riding gear, which can put them at a disadvantage when riding against those with more resources. In addition, training with a limited number of saddles often means having to ride “bareback,” which, according to Randy Hook, has now become a staple of their style. Their unique style, however, is believed to be one of their strengths as they continue to challenge conventional cowboy culture in a rodeo world that often prides itself on tradition.

“We’re different than most cowboys because we wear Air Jordan’s, Gucci belts and baseball hats while we ride,” Anthony Harris said. “But we could also dress like other cowboys.”

For the Compton Cowboys, riding through the city brings different reactions from local residents. Some react to the sight of African-American men on horses with fascination and disbelief, creating what Mr. Hook, 28, describes as a “Compton paparazzi” experience. But some are used to seeing them, scarcely pausing to take a second look.

 

Members of the Compton Cowboys pose to take photographs with local residents.CreditWalter Thompson-Hernández/The New York Times

Combating the stereotype that African-Americans do not ride horses has always been an issue for the group, particularly because they are largely omitted from media like movies and books.

African-American cowboys first emerged in the southwest United States at the conclusion of the Civil War, when freed African-American slaves migrated west to seek opportunities in a host of professions including cow herders and ranchers. According to William Loren Katz, author of “The Black West: A Documentary and Pictorial History of the African-American Role in the Westward Expansion of the United States” there were 5,000 to 8,000 black cowboys and cowgirls after the Civil War when wild herds of cattle were rapidly growing throughout the West.

“Being a black cowboy opened up professions for black men that they could not find in the North or South where they were often forced to work as street cleaners and elevator operators,” he said.

Roy-Keenan Abercrombia, 26, rides through the streets of Compton with other members of the Compton Cowboys.CreditWalter Thompson-Hernández/The New York Times

Mr. Katz also said that black cowboys — although often erased from historical narratives — are an indelible part of United States history.

“The most American part of America are cowboys, who attracted the attention of Hollywood movies for decades,” he said. “Black people, however, were left out of them and their accomplishments were buried throughout history.”

As African-American migration increased from the South to cities throughout the West Coast after the Civil War and up to the mid-20th century, African-Americans began to settle in cities like Compton, which were slowly transformed from predominantly white suburbs to majority African-American where Southern social and cultural practices like horse riding often continued.

Compton, despite growing revitalization efforts, continues to be one of the most economically underserved communities in the United States, leaving its residents with limited access to educational and economic resources.

Kenneth Atkins, 26, riding his horse through Compton, Calif.CreditWalter Thompson-Hernández/The New York Times

“The Compton Cowboys are a multigenerational story of black people’s ability to survive and create alternate worlds in the face of neglect,” said Thabisile Griffin, a doctoral candidate in history at the University of California, Los Angeles, who believes that many of the conditions that exist in Compton today, both inside and outside of the horse stables, have been a response to the lack of opportunities available to African-Americans. “Folks were frustrated, but subcultures of resistance persevered.”

Today, the Compton Cowboys continue to compete in individual events and often are invited to perform in parades throughout Los Angeles. Despite limited resources, some members of the group continue to excel in polo and bull riding events as a result of the intimate bonds with horses that, members of the group believe, have also been relegated to the margins.

Charles Harris, 29, practicing roping at Richland Farms.CreditWalter Thompson-Hernández/The New York Times

“The throwaway horses that we were given ended up being the best horses for us because they had a feisty spirit and a chip on their shoulder just like we did,” Mr. Hook said. “They were the underdogs just like we were.”

Charles Harris, who is attempting to become one of the first African-Americans to compete in polo in the Olympics, used to be ashamed to tell his friends that he rode horses.

“I don’t have any shame anymore. I even wear my breeches and boots to the mall,” he said.

In the past year the group took part in a featured ad by Guinness, the Irish alcohol company, as part of a promotional campaign, which, as some members have stated, has helped increase their visibility in an attempt to diversify a longstanding white cowboy culture.

Roy-Keenan Abercrombia, 26, and Anthony Harris, 35, ride their horses through Compton.CreditWalter Thompson-Hernández/The New York Times

“At the end of the day, we want people to also think about us when they think about cowboys, not just a bunch of white guys in cowboy hats who smoke Marlboro cigarettes,” he said. “We’re trying to be the guys who make it cool to wear Stetson hats and Wrangler jeans in the ’hood.”

Categories: Uncategorized

Who’s shopping where? The power of geospatial analytics in omnichannel retail

September 4, 2018 Leave a comment

Who’s shopping where? The power of geospatial analytics in omnichannel retail

Using advanced geospatial analytics, retailers can now quantify the true economic value of each of their stores across channels—and they’re uncovering surprising insights.

The wave of store closures across the US retail sector continues. In 2017 alone, more than 7,000 stores went dark, unable to withstand consumers’ rapid migration to e-commerce, the explosive growth of direct-to-consumer brands, and the glut of retail square footage in the heavily overstored US market. Retail space per capita in the United States is 15 to 20 times that of other major developed markets. Customer traffic at malls has been steadily decreasing. Margins are declining in almost every retail category. Given these trends, it’s becoming harder to justify keeping expensive brick-and-mortar stores open if they don’t meet sales expectations. Already, in the first few months of 2018, retailers have announced plans to shutter an additional 3,800-plus US stores.

Unfortunately, retailers often make the wrong decisions about which stores to close, thus inadvertently hurting their business further. They also overlook valuable opportunities to expand their market presence and unlock growth. The main reason is that they’re using outdated metrics: many retailers continue to use a combination of trend analysis and “four-wall economics” to assess store performance—that is, they’re still primarily taking into account the sales and profits that the store generates within its four walls, without considering its impact on other channels. This assessment then affects other decisions, including the store’s payroll, labor coverage, and sometimes inventory selection. However, consumers today shop across channels: they might visit stores to look at products and then eventually buy them online, or they might research a product online and then buy it in a store. In this environment, the traditional four-wall metrics are, at best, incomplete indicators of a store’s potential.

The most sophisticated retailers are now closely examining the interplay between offline and online customer decision journeys. They’re taking an omnichannel view of store performance—allowing each store to “get credit” for all the sales in which it played a role, whether those sales happened offline or online. In doing so, retailers are getting a more accurate picture of each store’s total economic value and making better decisions about their omnichannel presence. Their secret weapon? Advanced geospatial analytics.

Outside the four walls

Physical stores aren’t going away. We estimate that in-store sales will still make up 75 to 85 percent of retail sales by 2025. That said, the physical store is no longer just a place to buy products. A store now plays several possible roles: it might serve as an experiential showroom for products, a fulfillment center for online orders (or a convenient place for returning or exchanging online purchases), a hangout where groups of friends can try things on and take selfies that they then post on social media, or a destination for those seeking ideas and inspiration. It’s entirely possible for a store to have weak sales and profits within its four walls while being a strong contributor to the retailer’s overall performance.

Retailers can now measure the total cross-channel value of a retail store.

Advances in data and analytics can help a retailer quantify both a store’s halo effect (positive) and its cannibalization effect (negative)—in other words, how a store’s existence influences the performance of the retailer’s other sales channels (Exhibit 1). Retailers have long recognized that a store can have a halo effect, but it has traditionally been thought of in marketing terms—that is, a store can raise awareness of the retailer’s brand, just like a billboard or a TV commercial. Viewed as such, the halo effect has been difficult to measure. However, in an omnichannel world, a store can do more than just raise awareness; it can drive sales through other channels, and vice versa. McKinsey research suggests that a store’s e-commerce halo can account for 20 to 40 percent of its total economic value.

A new era in data and analytics

For decades, retailers have been mining a variety of data sets—point-of-sale information, demographics, market trends, and so on—to learn about customers and serve them better. Today, thanks to the availability of new types and sources of data, it’s possible for retailers to gain a much deeper understanding of consumers and markets. Retailers have access to more consumer-behavior data than they’ve ever had before, in the form of opt-in e-receipt programs and anonymized mobile-phone location data.

The aggregated data can shed light on not just the quantity but also the quality of customer traffic. This information allows retailers to get a detailed picture of how people move and interact within a market, as well as how they behave across both offline and online channels.

And it’s not just that there’s more data. Companies now also have access to increased analytical horsepower in machine-learning models. These models can mine big data assets and help generate granular, actionable insights at the micromarket level.

At the most sophisticated retailers, geospatial data and analytics are often owned by a strategic advanced-analytics group. The group, which can be centralized or reside within a specific function, drives the use of advanced analytics across silos. It delivers cross-cutting insights that bring together the priorities of various functions, including marketing, sales, finance, and real estate.

The combination of advanced geospatial techniques and machine learning, applied to cutting-edge data on consumer behavior, is unleashing powerful new insights for retailers. In particular, it’s helping retailers make better decisions about expanding or contracting their store networks. It’s also helping them develop store-level action plans to improve performance. In addition, some retailers are using these insights to mobilize their sales force and prioritize their investments.

Geospatial analytics in action: A case example

Consider the case of a global specialty retailer that sells its products through its own brick-and-mortar stores, an online store, and wholesale accounts. The retailer’s sales were declining in the face of strong competition. For insights into how to reverse its sales trend across the network, the company turned to geospatial machine learning.

A team of data scientists built an analytical model customized for the brand, leveraging both internal and external data. Testing hundreds of variables, the team used geospatial machine learning to identify the factors that have the greatest positive or negative effect on a zip code’s total sales (Exhibit 2).

Using geospatial machine learning, a retailer identified the factors that most affect a zip code's sales potential.

Based on these drivers, the team was able to predict the retailer’s potential sales in each zip code and each store, and to compare potential sales with actual sales. Then, using geospatial simulation, it estimated each store’s impact on wholesale and online sales.

The team was also able to isolate the unique factors that contribute to a strong e-commerce halo. It found that, in general, a store has a strong e-commerce halo if it is a larger store located in an area with a high proportion of young and urban professionals. Other, more surprising factors that contribute to a strong e-commerce halo: being far from other same-brand stores, being in a high-traffic retail environment such as a high-quality mall or a power shopping center, and having low tourist spend (which means most of the store’s customers live or work nearby).

The retailer used these insights to identify which stores weren’t living up to their sales and profit potential (Exhibit 3) and which micromarkets contained untapped growth opportunities. Further analysis revealed that the retailer could optimize the omnichannel value of its store network and achieve a 20 percent gain in EBITDA by closing, relocating, or reformatting stores (for instance, turning a fullpriced store into a digital showroom).

A retailer can categorize stores into four groups based on sales potential and profitability.

The retailer then created market-level “battle plans” for its store network: which stores to reformat or close, where to increase its presence either via new stores or deeper wholesale penetration, and what the sequence and scope of its investments would be.

Getting started

In kicking off a geospatial analytics effort, every retailer will have a different starting point. We recommend that companies first conduct an internal inventory of data availability and advanced-analytics capabilities.

Some retailers have limited data (for example, low visibility into wholesale accounts), siloed business units, and only a handful of data scientists and analysts, if any. These retailers should build their minimum data requirements and consider partnering with external providers or acquiring analytics capabilities outright.

On the other end of the spectrum, some retailers already have extensive external data partnerships, consistent and reliable data-sharing processes with their wholesale accounts, and senior management focused on omnichannel success. Such retailers can opt to build a strong data-science team with experience in geospatial analytics. That team would be tasked not just with performing the analyses, but also with generating useful insights that can be easily integrated into real-time business processes and decision making.

Regardless of their “build, buy, or partner” decision, retailers must constantly strive to break down business silos. If the heads of the retail, e-commerce, wholesale, marketing, real-estate, and finance functions all operate independently of each other and have few or no cross-cutting goals or initiatives, the company as a whole won’t be able to make the best omnichannel decisions.


In our experience, retailers can quantify performance gaps, uncover growth opportunities in their go-to-market strategy, and reap early wins from advanced geospatial analytics within 6 to 12 months—particularly when an empowered, cross-functional team is leading the charge. Successful pilots in one or two markets can quickly build buy-in for global rollout. By harnessing the power of geospatial analytics, retailers can capture the omnichannel customer—which, in the near future, could very well be the only kind of customer there is.

About the author(s)

Alana Podreciks is the manager of OMNI, a McKinsey Solution, and is based in McKinsey’s New York office; Nathan Uhlenbrock is a geospatial expert in the Waltham office; and Kelly Ungerman is a partner in the Dallas office.

The authors wish to thank AD Bhatia, Emily Gerstell, Yogi Patel, Adrija Roy, and Jennifer Schmidt for their contributions to this article.

Using advanced geospatial analytics, retailers can now quantify the true economic value of each of their stores across channels—and they’re uncovering surprising insights.

The wave of store closures across the US retail sector continues. In 2017 alone, more than 7,000 stores went dark, unable to withstand consumers’ rapid migration to e-commerce, the explosive growth of direct-to-consumer brands, and the glut of retail square footage in the heavily overstored US market. Retail space per capita in the United States is 15 to 20 times that of other major developed markets. Customer traffic at malls has been steadily decreasing. Margins are declining in almost every retail category. Given these trends, it’s becoming harder to justify keeping expensive brick-and-mortar stores open if they don’t meet sales expectations. Already, in the first few months of 2018, retailers have announced plans to shutter an additional 3,800-plus US stores.

Unfortunately, retailers often make the wrong decisions about which stores to close, thus inadvertently hurting their business further. They also overlook valuable opportunities to expand their market presence and unlock growth. The main reason is that they’re using outdated metrics: many retailers continue to use a combination of trend analysis and “four-wall economics” to assess store performance—that is, they’re still primarily taking into account the sales and profits that the store generates within its four walls, without considering its impact on other channels. This assessment then affects other decisions, including the store’s payroll, labor coverage, and sometimes inventory selection. However, consumers today shop across channels: they might visit stores to look at products and then eventually buy them online, or they might research a product online and then buy it in a store. In this environment, the traditional four-wall metrics are, at best, incomplete indicators of a store’s potential.

The most sophisticated retailers are now closely examining the interplay between offline and online customer decision journeys. They’re taking an omnichannel view of store performance—allowing each store to “get credit” for all the sales in which it played a role, whether those sales happened offline or online. In doing so, retailers are getting a more accurate picture of each store’s total economic value and making better decisions about their omnichannel presence. Their secret weapon? Advanced geospatial analytics.

Outside the four walls

Physical stores aren’t going away. We estimate that in-store sales will still make up 75 to 85 percent of retail sales by 2025. That said, the physical store is no longer just a place to buy products. A store now plays several possible roles: it might serve as an experiential showroom for products, a fulfillment center for online orders (or a convenient place for returning or exchanging online purchases), a hangout where groups of friends can try things on and take selfies that they then post on social media, or a destination for those seeking ideas and inspiration. It’s entirely possible for a store to have weak sales and profits within its four walls while being a strong contributor to the retailer’s overall performance.

Retailers can now measure the total cross-channel value of a retail store.

Advances in data and analytics can help a retailer quantify both a store’s halo effect (positive) and its cannibalization effect (negative)—in other words, how a store’s existence influences the performance of the retailer’s other sales channels (Exhibit 1). Retailers have long recognized that a store can have a halo effect, but it has traditionally been thought of in marketing terms—that is, a store can raise awareness of the retailer’s brand, just like a billboard or a TV commercial. Viewed as such, the halo effect has been difficult to measure. However, in an omnichannel world, a store can do more than just raise awareness; it can drive sales through other channels, and vice versa. McKinsey research suggests that a store’s e-commerce halo can account for 20 to 40 percent of its total economic value.

A new era in data and analytics

For decades, retailers have been mining a variety of data sets—point-of-sale information, demographics, market trends, and so on—to learn about customers and serve them better. Today, thanks to the availability of new types and sources of data, it’s possible for retailers to gain a much deeper understanding of consumers and markets. Retailers have access to more consumer-behavior data than they’ve ever had before, in the form of opt-in e-receipt programs and anonymized mobile-phone location data.

The aggregated data can shed light on not just the quantity but also the quality of customer traffic. This information allows retailers to get a detailed picture of how people move and interact within a market, as well as how they behave across both offline and online channels.

And it’s not just that there’s more data. Companies now also have access to increased analytical horsepower in machine-learning models. These models can mine big data assets and help generate granular, actionable insights at the micromarket level.

At the most sophisticated retailers, geospatial data and analytics are often owned by a strategic advanced-analytics group. The group, which can be centralized or reside within a specific function, drives the use of advanced analytics across silos. It delivers cross-cutting insights that bring together the priorities of various functions, including marketing, sales, finance, and real estate.

The combination of advanced geospatial techniques and machine learning, applied to cutting-edge data on consumer behavior, is unleashing powerful new insights for retailers. In particular, it’s helping retailers make better decisions about expanding or contracting their store networks. It’s also helping them develop store-level action plans to improve performance. In addition, some retailers are using these insights to mobilize their sales force and prioritize their investments.

Geospatial analytics in action: A case example

Consider the case of a global specialty retailer that sells its products through its own brick-and-mortar stores, an online store, and wholesale accounts. The retailer’s sales were declining in the face of strong competition. For insights into how to reverse its sales trend across the network, the company turned to geospatial machine learning.

A team of data scientists built an analytical model customized for the brand, leveraging both internal and external data. Testing hundreds of variables, the team used geospatial machine learning to identify the factors that have the greatest positive or negative effect on a zip code’s total sales (Exhibit 2).

Using geospatial machine learning, a retailer identified the factors that most affect a zip code's sales potential.

Based on these drivers, the team was able to predict the retailer’s potential sales in each zip code and each store, and to compare potential sales with actual sales. Then, using geospatial simulation, it estimated each store’s impact on wholesale and online sales.

The team was also able to isolate the unique factors that contribute to a strong e-commerce halo. It found that, in general, a store has a strong e-commerce halo if it is a larger store located in an area with a high proportion of young and urban professionals. Other, more surprising factors that contribute to a strong e-commerce halo: being far from other same-brand stores, being in a high-traffic retail environment such as a high-quality mall or a power shopping center, and having low tourist spend (which means most of the store’s customers live or work nearby).

The retailer used these insights to identify which stores weren’t living up to their sales and profit potential (Exhibit 3) and which micromarkets contained untapped growth opportunities. Further analysis revealed that the retailer could optimize the omnichannel value of its store network and achieve a 20 percent gain in EBITDA by closing, relocating, or reformatting stores (for instance, turning a fullpriced store into a digital showroom).

A retailer can categorize stores into four groups based on sales potential and profitability.

The retailer then created market-level “battle plans” for its store network: which stores to reformat or close, where to increase its presence either via new stores or deeper wholesale penetration, and what the sequence and scope of its investments would be.

Getting started

In kicking off a geospatial analytics effort, every retailer will have a different starting point. We recommend that companies first conduct an internal inventory of data availability and advanced-analytics capabilities.

Some retailers have limited data (for example, low visibility into wholesale accounts), siloed business units, and only a handful of data scientists and analysts, if any. These retailers should build their minimum data requirements and consider partnering with external providers or acquiring analytics capabilities outright.

On the other end of the spectrum, some retailers already have extensive external data partnerships, consistent and reliable data-sharing processes with their wholesale accounts, and senior management focused on omnichannel success. Such retailers can opt to build a strong data-science team with experience in geospatial analytics. That team would be tasked not just with performing the analyses, but also with generating useful insights that can be easily integrated into real-time business processes and decision making.

Regardless of their “build, buy, or partner” decision, retailers must constantly strive to break down business silos. If the heads of the retail, e-commerce, wholesale, marketing, real-estate, and finance functions all operate independently of each other and have few or no cross-cutting goals or initiatives, the company as a whole won’t be able to make the best omnichannel decisions.


In our experience, retailers can quantify performance gaps, uncover growth opportunities in their go-to-market strategy, and reap early wins from advanced geospatial analytics within 6 to 12 months—particularly when an empowered, cross-functional team is leading the charge. Successful pilots in one or two markets can quickly build buy-in for global rollout. By harnessing the power of geospatial analytics, retailers can capture the omnichannel customer—which, in the near future, could very well be the only kind of customer there is.

About the author(s)

Alana Podreciks is the manager of OMNI, a McKinsey Solution, and is based in McKinsey’s New York office; Nathan Uhlenbrockis a geospatial expert in the Waltham office; and Kelly Ungermanis a partner in the Dallas office.

The authors wish to thank AD Bhatia, Emily Gerstell, Yogi Patel, Adrija Roy, and Jennifer Schmidt for their contributions to this article.

Categories: Uncategorized

The Dominance of Denim

August 21, 2018 Leave a comment

 

Everyone wears denim – Okay, well, at least 99.9% of the population has worn it at some time. Denim fashions are simply a symbol of our cultural history and has become an international wardrobe staple. But in every season, you will find denim fashions interpreted in a slightly different way, usually through a new color or “rinse,” embellished or artfully shredded textile, or with a change of hemline.This year there seems to be a sea change in how we think about wearing denim. Designers have taken it from the ranch, the hiking trail, and the backyard barbecue, and claimed it for the runway. Here are some of those interpretations.

Although some fashion sites are quick to declare the skinny jean dead, reports of their demise seem awfully premature. It’s just that the super skinnies have been shortened, given a high waist and shredded hems. But what goes up must come down. Keep an eye out for very long slightly looser straight jeans that even puddle a bit around the ankles like harem pants (I’m expecting these in the fall.) And in a nod to athleisure, some of the straight leg versions are sporting striped seams. The “Carpenter” style is having a revival too, which is good news for those of us carrying around a little extra bulk in the seat and thighs. As for color, stonewashed (think Olivia Newton-John in Grease) is also replacing all those pretty new pastel colored and white jeans as the must-have in denim fashions.

Stella Leane Jeans

Stella McCartney Leane 80s Wash Jeans, $433

7 for All Roxanne Jeans

7 For All Mankind Roxanne Side-Stripe Skinny Jeans in Vintage Blue Dunes, $229

You’ll see lots of high waists, looser legs overall, peg rolled hems, and wide flares. Some are even showing those wider flares with deep turned up hems (which, frankly, looks a little forced. An item that strays too far from utility often becomes a short-term trend.)

Farrah Wide Leg Jeans, $248

I.AM.GIA Cargo Jeans

I.AM.GIA Ace Cargo Jeans, $129.95

Keep in mind that the more voluminous the silhouette the more they require a shoe with some substance. Save your delicate sandals for your skinnies and rolled hems. Oxfords, brogues, derbies, and penny loafers are the dressed-up options when you don’t want to wear sneakers or high heel sandals.

As for the jackets, you’ll be seeing a lot of larger, looser boyfriend or trucker jeans jackets embellished with patches or slogans, and oversized sleeves. If some of them remind you a bit of the 1980s you’d be right. There’s an 80s nostalgia revival happening in fashion. But always remember when a trend is revisited it’s always just different enough that it might make your actual older vintage pieces look, well, dated. You’ll also be seeing denim used in non-traditional ways like kimono jackets, trench coats and dusters.

Balenciaga Graffiti Jacket

Balenciaga Handwritten Oversized Graffiti Denim Jacket, $2,090

Sacai Denim Jacket

Sacai Cotton Denim Jacket, $510

Levi's® Kimono

Levi’s® Kimono, $298

STS Blue Denim Jacket

STS Blue Long Denim Boyfriend Jacket, $99

Madewell Denim Duster

Madewell Denim Duster, $178

Finally, the beloved jeans jacket persists as a perennial and you’ll find them everywhere. But if you want to add a little edge, go big. Maybe that’s the main message this year.

Levi's® Trucker Jacket

Levi’s® Baggy Trucker Denim Jacket, $98

Alexander Wang Mix Denim Jacket

Alexander Wang Daze Mix Denim Jacket, $297

Categories: Uncategorized
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