In the fourth in our ongoing series of exclusive vendor interviews from NRF 2013, our Editor talks to Terry Saunders, Retail Client Executive at Dassault Systemes, about how he feels the industry has changed in the past twelve months, and which trends he sees shaping its future.
Ben Hanson: Generally speaking, for the retail, footwear and apparel industries at least, how was the 2012 calendar year for Dassault Systemes?
Terry Saunders: 2012 was an interesting year for the industry at large. The last twelve months saw a realisation amongst quite a few retailers that the pre-order supply chain – that is sourcing, responsible sourcing and reliable sourcing – demanded a renewed focus. Now, that might seem like an obvious statement to make, but we saw examples over the past twelve months of entire ranges failing and putting their parent companies at risk.
Some of the bigger retailers (major department stores and supermarkets) are looking at new business models, where previously internal PLM systems are no longer being closed to the outside world. Some of those retailers are moving into franchisee models in new markets – low risk, low capital expansion – and what they’re finding is that the responsibility of taking on a franchisee partner adds additional responsibility to the supply chain.
[quote]…the nicest way to get there is to have people take part in the PLM lifecycle and not even realise that they’re doing it.[/quote]
BH: Which it has to – by extension. Those retailers have designated partners who can act under their banners.
TS: Exactly. So, if product A doesn’t appear in your local store you would perhaps never know, but if that same product is a cornerstone item and hundreds of licensees have placed orders on that basis, its absence is going to cause much bigger ripples in the pond than it would have done had it been developed internally.
ERP has had its investment now. Every significant retailer has an ERP system in place. Supply chain – primary and secondary – is being focused on now, and by natural extension that will involve PLM. When we get to the ground of supply chain, the operational level, retailers don’t want to see a pre-supply chain feed that’s comprised of Excel spreadsheets and bits of paper; they want to see a nice, regular pattern of sign-off, gatekeepers and progression to supply chain goals. And these are questions that began coming up at C-level more and more in the past year.
BH: How about 2013? Obviously there’s an array of trends on display here at NRF – including Dassault Systemes 3DExperience, which I suppose could be a response to the rise of consumer-led retail and store design.
TS: There are a lot of speakers here at the show talking about how the days of transaction retailing are gone, and how people are looking to buy a brand experience and buy into the brand itself.
[quote]If we can assist retailers in pushing the boundaries of their brand and embrace innovation, then we’ll have achieved our goals.[/quote]
BH: Absolutely. If there’s one behavioural trend to take away from this year’s show, it’s that consumer no longer buy products; they buy brands.
TS: For an example of this back home, look at the new Burberry store on Oxford Street [in London]. This is a fantastic example of a piece of major real estate that’s been turned over to the experience of the brand. Now, Dassault Systemes’ 3D experiences seek to support that – support innovation and brand centricity without losing focus of the customer’s requirements. We have evolved from the traditional PLM portfolio by adding 3D visualisation, information intelligence search based applications and social capabilities to cater to today’s social fashion brands and retailers .
So, our systems provide that support from initial design through to product on shelve, at every significant segue in that product lifecycle, Dassault Systemes seeks to offer a fully integrated set of capabilities. Many, many product development processes exist in isolation, as either spreadsheets or pieces of paper, whereas the information we work with is active and live. And these identified gaps in product development, the opportunities to close doors and improve processes, are again where C-level attention is turning.
BH: I think the essence there is that modern product development really requires companies to unify a tremendous range of stuff, and in order to do this they need a centrally accessible, accurate and contemporaneous source of information. In almost all of those instances you mentioned, that source is or should be PLM.
TS: You’re absolutely right. And you know the nicest way to get there is to have people take part in the PLM lifecycle and not even realise that they’re doing it. We interface with the 2D design tool of choice – Adobe Illustrator – and the creative types that are using that native interface don’t necessarily realise that they are working with PLM. But today’s essence of modern product development means that a company needs to capture the voice of teh customer through social networks. Brands today not only have the challenge to have the right product at the right time but also to make it available online and offline.
BH: If it’s a bi-directional interface – something I’ve seen occupying a very prominent position in the shortlisting and selection processes lately – then as far as they’re concerned, the technology is supporting their existing ways of working, rather than intruding on them.
TS: Definitely. You want to create an environment where people can innovate and live the brand, but we’re trying to do is cover the sharp edges, and create a safe, secure and coordinated environment that removes any opportunities to hurt the brand along the way.
[quote]Many, many product development processes exist in isolation, as either spreadsheets or pieces of paper, whereas the information we work with is active and live.[/quote]
BH: I was going to ask what you saw as the biggest emerging trends for 2013, but it seems as though that end-to-end, experiential way of doing things is probably one of your cornerstones for the coming year.
TS: It is, but it’s important to note that of the themes we’re seeing, no theme is coming from PLM. These themes are coming from the market, from the experience, and from the extension of the product into new media. Now, Dassault Systemes can support the development and the innovation that can happen within a brand when you don’t have to worry about continuity or supply chain confusion.
If you’re in that safe and productive environment that I spoke about earlier, you can innovate and experiment. With the 3D modelling element of our solution, for example, the mockup stage of your products can be done virtually and edit decisions can be done earlier decreasing the number of sample requests.
Generally speaking perhaps 20% of products within a line are approved, and when you’re creating these mockups physically (particularly in the jewellery industry, where parts and labour can be prohibitively expensive) it can have a significant impact when they are discarded at the approval stage. So, this leads us to one of two working processes: either we will only ever create three mockups, because those three use up all of the budget I have to spend, or we have to find a more cost effective way of producing the number of mockups we need to create successful lines.
Now, the first of those inhibits creativity – three designs will never be as daring or as diverse – but if, in this scenario, we could make fifty of these mockups, we could experiment and innovate without worrying about the cost of discarding physical mockups. I don’t believe we’ll ever get away from that truly tactile experience of holding and examining physical mockups…
BH: But those physical mockups work best as a final stage. Which is to say that, frankly, physical sampling on this kind of style simply doesn’t work well as a preliminary stage.
TS: Exactly. So here at Dassault Systemes we see ourselves as supporting these innovative experiences. If we can assist retailers in pushing the boundaries of their brand and embrace that innovation, all within a nice, safe, and controlled environment, then we’ll have achieved our goals.