How the Web Broke Retail: The Disruption of the Second Largest Industry in the World

The Internet’s Effect on Apparel Manufacturing

Throughout history there have been several major disruptors: the printing press revolutionized the exchange of ideas, the telephone changed how people communicate, and the internet-- well, the internet changed everything. These disruptions cause a rebirth, the death of the old and the rise of the new-- typically giving way to innovation. Over the last two decades entire industries have gone extinct, and businesses have had to quickly adapt to the migration online. One industry that is still trying to find its place in this new world, is the apparel industry.

In the last month, retail giant Payless announced bankruptcy. Another casualty of the “Amazon affect”-- people getting everything they need online, and getting it same day. This relocation to online purchasing renders brick and mortar useless for younger generations. Many may argue that the predecessor to Payless is the online only shoe store Zappos. Or the complete decimation of travel agencies with the rise of [name your preferred airline site here]. And this trend is not exclusive to shoes or travel. According to the Pew Research Center, 79 percent of Americans have shopped online. However, only 10 to 15 percent say they shop online one or more times a week.

The apparel industry has seen a complete upheaval in how clothes are distributed and purchased. And with the global apparel market being valued at 3 trillion dollars, 3,000 billion, and accounting for 2 percent of the world’s GDP*, the impact of this is huge. People want high quality goods, purchased online and delivered at their door tomorrow.

With less brick and mortar stores to hold large selections of merchandise, and consumers demanding quick delivery, apparel manufacturers are rapidly innovating on how to reduce excess inventory and unsold product, while trying to dramatically shorten their production timelines.

Co-Founder of The Vertical Collective Morgaine McGee says, “With so many retailers moving online, manufacturers have to innovate and respond to consumer demand by creatively accelerating the development and production of goods.” The apparel expert continues, “Not only has speed to market become a major factor, but so has control of inventory. Excess product means paying for more storage and therefore more costs. This leads many to on-demand manufacturing -- you buy one, you make one. Less waste.”

Although models of fast-development and on-demand merchandising are being widely adopted by the apparel industry, many companies are unable to adjust. The traditions that built this industry have become its achilles heel. Partnering with companies like The Vertical Collective, allow large companies to benefit from the nimble ways of a manufacturing start ups. Those that can integrate the old with the new are finding success with a combination of approaches. But those that cannot adapt and adopt, will eventually be left behind.  #RIPPayless.