Fortune Favors Bold Investors in New Technology

The retail and fashion industry entered 2022 with several challenges introduced or exacerbated by the pandemic, yet little insight into how the economy will adjust.

But facing a challenge is no excuse for inaction, according to Edward Hertzman, executive vice president of Fairchild Media and founder of Sourcing Journal. Instead, he said, “It’s time to lean in and embrace technology, re-evaluate the supply chain matrix and find new paths to profitability.”

Based on a survey of fashion and consumer goods executives, our 2022 supply chain trends and technology report, Fortune Favors the Bold, describes a future for the industry that, while uncertain, holds many possibilities for innovation and adaptation. Big changes—including in assessing demand, managing supplies and fine-tuning production—will be necessary for companies to survive. Technology is at their core.

In his exclusive analysis in our report, Hertzman emphasizes the need for information in times of uncertainty, noting his own experience in creating Sourcing Journal. The publication began as a newsletter when cotton prices were fluctuating drastically between 2007–2009. After evolving into a magazine, it is now a dynamic media outlet, born out of company leaders’ need for information during a crisis in their industry—a need that has only grown since the onset of the pandemic.

“Today, that same executive is dealing with not just one problem of that magnitude but 10 different significant issues,” Hertzman told CGS.

Now, the goal is not just access to information, but access to information in real-time. Executives ranked supply chain visibility as their most important priority for improving their business in our survey.

Investment in technology is key to achieving this goal. Companies can address the bottlenecks and other logistical challenges that plague their operations if they can see where the problem originates. Technology gives manufacturers and brands a virtual view of what is going on at every step of the production process, increasing efficiency and reducing waste.

“You’re not going to be able to solve all these problems without technology,” Hertzman said. “You have to have end-to-end visibility in your supply chain.”

The recent boom in consumer demand for sustainably sourced products is yet another reason why such technology is so vital, Hertzman points out. Data shows that customers care more than ever about how the items they buy are produced. According to the CGS 2021 consumer shopping survey, 42 percent of shoppers are concerned about the materials used in manufacturing.

“You are going to need to be able to trace and track the origins of your product,” Hertzman said. “That’s going to force people to invest in technology that provides traceability.”

Technology can provide not only a look at issues in real-time, but also a peek into the future. Predictive analytics is becoming essential to the fashion industry. Hertzman celebrates Nike’s decision to acquire the AI platform Celect in 2019, which is helping them anticipate changes in demand and therefore streamline production. Nike made other key tech investments just a few years before that, acquiring digital design studio Virgin MEGA in 2016 and consumer data analytics company Zodiac in 2018.

“Our goal is to serve consumers more personally at scale,” Chief Operating Officer Eric Sprunk told CNBC in 2019. “We have to anticipate demand. We don’t have six months to do it. We have 30 minutes.”

Nike made these moves before the pandemic hit, and since then, the need has become even more pressing. If companies want to not just survive but actually thrive amid the turmoil the pandemic has caused, they must accept the upfront cost of investment in new technologies as the price of doing business today.

Based on the CGS 2022 annual report, it’s clear that the pandemic was a catalyst for major developments, and that this may be the year that fashion goes fully digital. Technology has become crucial for success and longevity in the industry, so companies need to start making big investments if they haven’t already.

“Those who are willing to change are going to be here in years to come,” Hertzman said.

Looking for more insights and customer stories on how companies are investing in technologies to meet today’s and tomorrow’s consumer demands? You can get your copy of the full report, Fortune Favors the Bold: 2022 Annual Supply Chain Technology and Trends.