Embodee recently spent time with Thomas Davis, global head of e-commerce for PUMA, to discuss changes and challenges in the apparel industry. Here, in the second of two installments, are excerpts of our conversation.
Embodee: How does mass customization fit in from your perspective?
Davis: When you start thinking about a diversified product strategy in terms of more SKUs, more colors, and more options, you start running into liability. Meaning, you have to front load cash flow to pay for inventory/product that might sit on shelves for weeks if not months before it’s purchased and your return on the investments is recouped. It’s the long-tail game. When you’re trying to keep your margins high and your turn ratios high, it’s a very difficult one to balance. Creating lots of inventory that sits on shelves all over the world is just basically money sitting there that can’t be allocated toward other business-enhancing projects. The turnaround time on product is probably a year lead time for some companies. That’s a long time to tie up money, especially when there’s no guarantee in the world of fashion.