Till very recently, offline businesses were insulated from technology advances. No matter how many tweets, or how many tech blog articles talk about Singularities, AI, Oculus, Drones, Buy Buttons, and suchlike, traditional, offline businesses have often functioned independent or even despite advances in technology.
But a lot of trends are penetrating even behaviors in these offline, old, fragmented, disjointed, seemingly disorganized businesses.
And Sourceeasy would like to postulate that we’re at the cusp of 3 very interesting and powerful trends that will make us succeed where numerous others have failed before.
Growth of Venture-backed / Indigenous Vertical Private Label Brands across the world:
As Dave McClure has mentioned countless times quite eloquently (https://www.youtube.com/watch?v=wkyAlxxUw5g ) , the times have changed for internet startups:
- Building a product is easy with many Infrastructure Plug n Play Systems like AWS, Wordpress, Tumblr, Heroku, New Relic, Intercom, Mailchimp, etc.
- Scaling a product using Social Networks is easier than ever on the back of massive platforms like Google, Facebook, Twitter, Linkedin, and on App Stores like Apple (iOS) and Google (Android)
- As Sam Gerstenzag says here (http://a16z.com/2014/07/30/the-happy-demise-of-the-10x-engineer/ ), the day when a non-programmer can build, operate and scale a tech startup is not far off.
To add to this, the concept of Startups is incredibly appealing to many current employees of large companies who can reimagine what the consumer is looking for, especially in the Apparel business where design, style and a sense of fit is so important to creating a distinctive brand image.
Designers, Merchandisers, and past employees from Gap, Inc, and many other large retailers are increasingly moving out to set up their own brands. The number of startup fashion brands is exploding in New York, Los Angeles, San Francisco and its being powered by internet-driven distribution systems. And VCs are recognizing this.
Jay Deng describes why Fashion is the next big thing in VC: http://www.businessoffashion.com/2014/05/op-ed-fashion-next-big-thing-venture-capital.html
This trend has created a number of vertical brands. Those brands, however, will be competing in the real world with top retailers whose prices can be really compelling — with a great brand promise. And they need to do this with their smaller volumes.
Apparel Retail and Product Assortments are changing irrevocably across the world:
Worldwide, Apparel retailers have been grappling with their ability to accept the new trends and innovative product assortment strategies that Fast Fashion Brands like Zara, H&M, and Forever21 and online brands like Jackthreads, Everlane, and Bonobo’s have brought to retail sales.
Rather than do 2 collections 6 months apart, (see why JC Penney and Sears are struggling: http://www.businessinsider.com/zaras-genius-business-model-2013-3 )stores like Forever21 and Zara choose to offer a far larger number of SKUs and update their stores twice a week globally.
Zara does an average of 12 -14,000 styles a year — (http://www.harbott.com/2011/03/03/analysing-zaras-business-model/ )That’s approximately 250 styles a week. They also manufacture an average of 600 units per style of fast fashion styles that are inspired by High Fashion Trends that they track globally.
Online retailers like Bonobo’s, Everlane and Jackthreads buy direct from factories, add a single margin (not layers of margins across the supply chain), and offer their customers compelling advantages such as better fit, greater style, lower prices with better
Large retailers like Gap, Inc have reacted to these changes proactively (http://www.coresolutions.com/speed-to-market-key-to-gaps-turnaround/ ) by initiating supply chain rationalizations like Fabric Platforming, Vendor Stocked Inventory, reimagining product assortments and trying to bring down turn times to under 8 weeks.
Premier private label manufacturers like MAS Holdings have initiated new fast fashion mass manufacturing programs like “RAPID” where they processed in excess of 25 Millions Units for their global clients. The average number of units per order / SKU was under 2000 pcs. The time from order to store was under 3 weeks.
But what about retailers, brands, stores who cannot commit yearly volumes, do not have the large resources to invest in vertical agile manufacturing units?
What about retailers who want to do 500,000 units a year? Or 50,000 units a year? How do they get agile?
Mobile Data, Mobile Adoption is driving behavior changes in the developing world:
Benedict Evans shared a brilliant seminal slide PPT on how Mobile is destroying PC scale and share here: http://www.slideshare.net/bge20/2013-11-mobile-eating-the-world
In developing countries, most people are educated, can read / write English, but yet are intimidated by Desktops and the idea of using a Keyboard and a Mouse.
Ben Evans describes this here:
This is the reason you’ll see specially hired Accountants and Typists who type and enter information sitting at computers. Job Applications like these are commonplace in India:
Companies like Li & Fung, SAP, and other companies have tried to create and implement ERP systems to streamline the disorganized rabble of apparel manufacturing in the SMB and the small scale sectors.
They’ve met with limited success — Only highly organized integrated vertical units have been able to adopt these platforms with only some efficiency.
The core reason for this is that the entire supply chain follows a “Record, Store, Deliver, Report” system for information, where each function is by a separate person.
Usually, the Field Operative gathers the information on paper (Recording)
He then hands this info over to this Supervisor who either stores or acts on it (Stores)
The supervisor then delivers this data to the Merchandiser / Typist who then enters the data into the software / update and emails the customer / agents (Delivers)
This email / data is then reviewed by the CEO / Owner of the factory at his leisure (Report).
But every single person who has a tablet PC to check Facebook / Twitter / to read the Newspaper, or to chat with his friends is already using a Mobile device in his real life.
Almost every single feature phone will probably convert into a Smartphone at some point in the next 3-5 years.
When this happens, it becomes very easy to create Business Logic driven software systems that create objective to-do lists that then direct the Field Operative to point, click, shoot and enter backing data on the spot (geo location recorded) and then immediately submit this report on the spot using Mobile Data to the cloud. This cuts the entire “Record, Store, Deliver, Report” cycle down to “Record, Report” and happens concurrently in the course of the day’s work.
No Additional Effort is necessary to transfer or communicate the information because it’s auto-shared on the connected cloud.
No Additional paperwork is needed, because the information is live across devices and everyone can see it / edit it and share it with their customers.
If you can close the information loop instantly on recording the data, it speeds up the entire feedback loop, enhances efficiency and adds yards of agility to the process.
But this is not the only reason we’re excited about Sourceeasy.
The 3 big Technology innovations that have become ubiquitous and commonplace are:
Several “unicorn” companies — Salesforce, AWS, Heroku, Workday, Facebook. Twitter, Uber, Snapchat, and many other products have demonstrated the power of:
- SaaS: Platforming Software to enable access with a login and a password.
- Social: Sharing photos, messages and collaborating in real time with social proof.
- Mobile: Accessing and working on mission-critical data and systems anytime, anywhere.
Initially, most SaaS products were built around the idea of a single function — ERP, CRM, WebHosting, Accounting, Productivity.
Later, Social connected our lives with our friends, colleagues, and trusted connections through Facebook, Linkedin, and Twitter.
Mobile further enhances this connect, while enabling transactions as well using specific geo location tools, ease of tracking and strong technical advances in responsive web design.
Sourceeasy uses the best features of these 3 technologies to create the core of a strong multi-platform working experience that is seamless, elegant and simple:
- One Version — Easily Upgradeable
- Zero License Costs — Amortised by Manufacturing Contracts.
- Central Repository of Product Templates, Vendor SKUs, Fabrics, Trims.
- Central Storage of CADs, Product Specs, Updates, Comments, and Messages.
- Collaborating on Products, Templates and Sample Discussions in real time.
- Sharing images of work progress, issues, clarifications from the factory.
- Social Proof: Noone is anonymous any more.
- Walled Garden: Invite trusted colleagues and vendors to collaborate / share.
- Internal messaging tools to communicate across geographies.
- Geolocation / TimeStamp on every update to ensure authentic information.
- Tracking of goods and services if mobile-enabled.
- Review, Record and Report Information from anywhere, anytime.
- Feedback on clarifications in real time.
What this does for us is it takes software standard systems, lets us configure plug n play infrastructures (pushr, google apps, AWS, Heroku, Angular, Laravel, Rails, etc) and build out beautifully effective software that we can use to automate real world businesses.
There is hardly a product that does not leverage technology in some way that has not made money.
However, when you can use that technology as a lever to disrupt centuries-old markets, that generate healthy monthly cash flows, create strong profits and can be automated using intuitive, easy-to-use software, you’re sitting on a Billion Dollar Opportunity.