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What Retailers Really Want SGIA April11 .pdf

Original filename: What_Retailers_Really_Want-SGIA-April11.pdf
Title: What Retailers Really Want From Domestic Apparel Printers

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serving the retail sector
What Retailers Really Want From Domestic
Apparel Printers

By enhancing flexibility and reducing risk for your retail customers
you become less of a vendor and more of a strategic partner.
Over the last couple of months, we asked
a number of domestic apparel decorators
with ties to retail customers about where
the market stands. We were interested to
find out their perspectives about what the
industry needs to do in order to recapture
some of the domestic apparel market back
from off-shore suppliers. We asked them one
specific question — what do you think the
retail market wants from us?
There were a wide range of answers,
and some respondents were clearly
feeling burned:
• “They just want us to go away. All they
do is constantly beat me up on price.”
• “I don’t know — why don’t you go to
China to find out?”
• “Who cares? They give themselves
discounts when they can’t sell all of their
inventory and they pay their bills late.”

When you hear responses like that
you can’t help but wonder what kind of
bad transaction caused them. But not
everyone had this dire perspective. There
were a few decorators that said they saw
big opportunities on the horizon and have
been “adding value” for their customers:
• “They want solutions from us.
They are learning that price is not
• “They want quality and reliability in
their supply chain — something that
is not always available off shore. Those
lower prices don’t matter when the
quality is off base.”
• “Retailers? What they want is
changing. They are starting to
experience the impact of global
commodity inflation and countries no
longer dumping inventory for next to

nothing. They are starting to see that
“90 days” is Chinese for “150 day”
lead times.”
Schadenfruede, Perspective and

The Germans have a word for enjoying
someone else’s misfortune: Schadenfruede.
You couldn’t help but hear it in the
comments of several domestic decorators.
They clearly felt like they were left at the
alter by long standing retail partners who
moved to Asia for sourcing and a fast 20
percent discount in price.
Now things are changing. Labor
costs in Asia are rising,
government mandated
bank rates are increasing,
commodity prices are
escalating and lead times

Chris Bernat, Partner, Vapor Apparel/Source Substrates

Visit SGIA at SGIA.org

SGIA Journal ■ March/April 2011 | 21

By enhancing flexibility and
reducing risk for your retail
customers you become less
of a vendor and more of a
strategic partner.

Land More Jobs
in the Retail Sector
Don’t miss the garment-exclusive
session “Get Your Products on
the shelf” at SGIA’s new Business
Development Conference (Denver,
Colorado; May 11–12).
Presenter Chris Bernat of Vapor
Apparel/Source Substrates and Jay
McLoughlin of Rethink Fabrics
will highlight digital printing
technologies that are adding
value for retail or branded apparel
customers. Learn what’s needed
to increase value and reduce price
For more details and to register for
this highly anticipated Conference,
visit SGIA.org, Keyword: BusConf.

are getting longer. Those same retailers are
now reviewing their vendor relationships
and looking for new partners to help them
address some of their systematic challenges.
Retailers are changing their perspectives
on sourcing in the Americas. Price will
always be critical but timely delivery is
essential. Consistency and quality are also
important as consumers seek apparel that
will last longer.
Rapid Retail Replenishment — They
Want It!

One of the most attractive topics you can
discuss with a customer in uncertain times
is risk reduction. Retailers and brands are
very concerned about being left holding the
Pre-Labeled Custom Blanks


Short Run Production


Risk Reduction


Higher Sell


Inventory Through Flexibility

bag. What’s in the bag? Excess inventory;
apparel that does not move before Pantone
changes the rules of color for the next year.
Additionally, shirts that have last year’s hit
movie graphics on them — inventory that
can’t move is a noose around a retailer or
brand’s neck. They don’t want to be forced
to discount it because it will do damage to
the brand. That hurts you in the long run.
The opportunity: Presenting a more
metered approach to production could be
the answer. By working with textile mill
partners, decorators can build a value chain
that reduces risk for everyone. We call this

22 | SGIA Journal ■ March/April 2011

concept rapid retail replenishment.
In this scenario the decorating partner
works with reliable mill partners to
manage the importation and inventory of
blanks that the branded/retail customer
has ordered. These shirts arrive into the
country ready to decorate. They have all of
the required documentation (RN#/CN#/
Care Label, etc) and are prepackaged to the
customers’ specifications.
The decorator works with the brand to
define the artwork they plan to print and
to establish the minimum order quantity
(MOQ ), packaging and fulf illment
requirements. The decorating partner
works within pre-determined turn times
and implements blind-shipping services
to further enhance turn times to the retail
location. The branded/retail customer then
begins to place pre-orders for the different
retail locations that will be supported by
the decorating partner. Communication
is flowing.
This may sound pretty basic, but
there is a catch — the success of this is
driven by micro-sized MOQs per design,
per shipping location. Lower MOQs
are the lynch pin for the amount of risk
reduction you can create. A MOQ of 288
is not very attractive to the branded/retail
partner, but a MOQ of 24 per design is
extremely attractive.
Customized Margins

A by-product of micro-sized MOQs is the
ability to deliver customized content to each
location. One company implementing this
type of model is American Backcountry
(Ashville, North Carolina), which has built
a loyal retailer following in the outdoor
adventure market. Retailers have access to
limited edition art that is customized to
their needs. Retailers can reload with as
few as 12 shirts per design (total).

Visit SGIA at SGIA.org

American Backcountry also works with
affiliation groups such as the Boy Scouts of
America to deliver customized versions of
his award-winning artwork. Troops can
get their hometown and troop number
placed onto the graphic and order the exact
amount of shirts they want in the colors
and sizes they want. All of this can be done
online, which further reduces costs.
This customization enhances profits
and customer loyalty to the brand and
the program. By adding significant value
through customization and inventory
control, the cost of the garment is able to
rise accordingly.
Inception: Sublimation

American Backcountry’s strategy, and
other value-added vertical brands like it,
relies on the competitive cost structure
of “large-format” sublimation printing.
Without a cost-effective digital print
platform, the business model would not
Ten years ago a liter of digital sublimation
ink was going for $550. Today that same
ink is selling for $150. The printers have
gone down in price as well. That price
change is the difference maker for this
business being profitable. Ink and paper
that cost between 40–50 cents per square
foot allow for real profit. It takes time for
the total product solution to assemble
itself and become priced effectively. For
sublimation, that time has come.
The brand also relies on a group of
unique fabrics manufactured in Colombia.
These spun poly-garments offer the end
customer a superior wicking technology
combined with the look and feel of cotton,
and it has further increased the margin
opportunity and perceived value with the
customer. The garments were specifically
engineered for the sublimation process,
which reduces decorating fallout and
focuses on sublimation-friendly colors.
Coupling this vibrant large-format
sublimation print with a colored wicking
garment and low cost single-hit screen
printing for retail branding is a win-win.
The customer gets a full color regionalized
graphic and the decorator gets a clearly
defined program from the customer. The
brand gets a premium garment that is
priced right with much lower inventory
By enhancing flexibility and reducing
risk for your retail customers you become
less of a vendor and more of a strategic
partner. The customer starts sharing more
ideas with you. They ask you how things
can get done more effectively. The whole
time it is clear that you have the business
Visit SGIA at SGIA.org

because you are the innovator and the one
who is stretching to solve their problem.
Back to Value and Innovation

A wise man once said, “you can try to stop
it all you want, but water will always find
its way down the mountain.” That can
be applied to a lot of business topics. It is
certainly true when it comes to seeking
value. Retail customers want a smarter
way to deal with “the new normal.” The
f lexibility and comprehensive value of
micro-run printing will only become more
popular over the next several quarters.
Innovation and a smarter way of doing
things will always be popular. Potential
customers will always listen to someone
they think can improve their business. The
key is getting in front of the right person
at the organization and articulating your
value proposition.
Rapid retail replenishment is attractive
to the individual store manager, the
CFO and the risk management team.
Implementing it is not for the faint of
heart, but doing so can be the difference
between Schedenfreude and profit nirvana!
Chris Bernat, Partner at Vapor Apparel/
Source Substrates, has written about
mass customization for SGIA and other
industry publications. He is a contributing
writer for Impressions Magazine and other
periodicals on the topics of sublimation and

SGIA Journal ■ March/April 2011 | 23

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