Line reps are facing a significant technology-driven change in their business that will make some reps much more influential and put many others out of business. The apparel industry is slowly embracing the Internet, and the line reps who profit most in the future will be those who best exploit the information they have always controlled.
Seasoned businesspeople are comfortable with the general idea of a business cycle, even when the cycle is painful. Business decreases sharply, then a year later it surges. But for apparel line reps, this recession marks a significant change"a major shift in how business will be conducted. Over the next five years, I expect that many line reps will find business much more difficult, while a few will profit from the changes, gaining substantial influence and additional business.
These changes will create new opportunities for line reps: using Web technologies, they will be able to provide excellent service to more buyers, reducing the costs to vendors. The most successful reps will provide their vendors more than sales support, making their roles as educators, mentors, and advisors to buyers more explicit. This will result in more capable buyers who will increase sell-thorough to the ultimate benefit of the vendors. The reps who can address this opportunity will displace those who do not, resulting in a future of fewer, but more influential, line reps.
The changes that line reps can expect are the result of the apparel industry finally embracing Internet technology and learning how to use technology to develop and enhance, rather than replace, their business relationships. Line reps who understand how to use Web technologies, and more importantly, understand how their vendors and buyers want to use the Web, will gain a broad reach, while the laggards will be left with the low-margin scraps.
These new opportunities are the result of a confluence of trends and technologies:
- High-profile vendors have skipped recent trade shows, and many of them will learn how to do business without the shows.
- Vendors are wary of the costs of hiring line reps but not aware of the full value they bring to the industry.
- Independent retailers are burdened with many new requirements for success, including advanced skills with merchandising, inventory control, marketing, e-commerce, and online promotion.
- Internet technologies are radically changing how products are promoted and sold and making meetings less important for business-to-business sales.
Some of the opportunities for line reps are:
- Moving the first stages of the buying process online to reduce costs and make buying more efficient for buyers.
- Developing data-driven purchasing guidance, helping buyers know what to purchase based on actual sales data.
- Facilitating or delivering retailer training and education.
The Confluence of Forces
Vendors are skipping trade shows. As one of the first major trade shows after the Fall 2008 market crash, January’s ASR show was a bellwether for the new order. By some accounts, the show was about 40% smaller than the previous show, and notably absent were several major brands like Quiksilver, Roxy, Hurley, RVCA, and about 30 other brands. These brands skipped the show not only because times are bad, but also because they realized they could. ASR is a marketing show, not an order-writing show, and these brands realized ASR wasn’t the best way to spend their marketing budget. Additional major brands like Adio, Reef, Rip Curl, DC, and O’Niell skipped marketing on the show floor to take orders in private rooms. A similar set of reductions are happening at New York Fashion Week.
The changes to trade shows may result in lower attendance in the future, but the shows won’t disappear; they will continue, but with a different purpose. Trade shows will have a greatly diminished role in promoting brands and writing orders for larger buyers, but they will continue to be important venues for buyers to discover trends and new products, take educational seminars, and build relationships with business partners.
Vendors want to reduce costs. If these brands adapt by discovering a higher ROI in other marketing methods, they will reduce their spending on shows, and other brands will learn the same lesson, resulting in a permanent reduction in trade show attendance, first among the marketing shows and eventually among the order-writing shows. Vendors have long complained about the high cost of trade shows, but they felt that they had no other options. This recession has given them encouragement to find new options, and they are finding those options, many of which are online.
These same trends will affect line reps. Line reps have a powerful and contentious position in the industry. Vendors appreciate the sales work that line reps perform for them, but they chafe at the fees. They see line reps as a pure sales cost because they are not aware of the value that line reps have as mentors, advisors, and advocates for buyers. Buyers rely on the line reps they have established relationships with for the reps’ knowledge, experience, diplomacy, and ability to help independent retailers be better business people. Unfortunately, vendors don’t see the line reps in these roles, so they don’t value the reps appropriately.
Modern retailers need many new skills. Today, independent retailers need the experience and guidance of line reps more than ever. Retailers are burdened not only with the business challenges they have had for decades, but they must also learn about inventory control, point-of-sale systems, websites, e-commerce, and e-mail marketing. Large integrated retailers handle these issues with dedicated staff, but for most independent retailers, the owner must be proficient in everything, a crushing encumbrance. Independent retailers will need additional help from all quarters to succeed.
The Internet is pushing change. Weaving itself through all of these issues is a broad range of Internet technologies, most of which the apparel industry is only in the early stages of sporadic adoption. Few line reps have websites, and even fewer are using web marketing, social media, or online video. But these technologies are proving themselves among consumers. Consumers’ use of e-mail, social networks, video, and e-commerce to discover and purchase apparel is flourishing, but the same technologies are rare among vendors, retailers, and line reps. When the apparel industry discovers how to adapt the vibrant consumer technologies to their business-to-business transactions, the resulting shift will create a new set of winners and losers.
The results of these forces, the current recession, and increased regulatory requirements are likely to be a significant contraction in the apparel industry, a consolidation among businesses, and an increase in the size and professionalism of the remaining businesses.
The apparel industry consists of 41,000 apparel manufacturers and 91,000 clothing stores, with 68% of manufacturers and 40% of stores having no employees, the largest portion of manufacturers making less than $10M per year in revenue, and about 30% making less than $3M in revenue. These numbers will change in the next 5 years, with a lot of closures and acquisitions reducing the number of companies and increasing the average revenues. With the reduction in the number of manufacturers and retailers will come a reduction in the sales force.
The Opportunities for Line Reps
By embracing new technologies and expanding their traditional roles, savvy reps will be able to provide extraordinary new value for vendors, extending their influence and growing their businesses.
The critical observation behind these new opportunities is that because the apparel industry is fragmented, relationships will always be important. An industry with so many businesses requires people to be brokers of trust, stores of experience, and advocates for common interests.
Fortunately, despite frequent lamentations of neo-luddites, Internet technology has not destroyed the value of relationships, it has simply transformed them. As businesspeople become more comfortable with e-mail and Web conferences, face-to-face meetings can be less frequent. Face-to-face meetings are still important to establish a connection, but they are no longer necessary for every business transaction. After a relationship is initially established, business can often be conducted more efficiently online, opening possibilities for savvy showroom owners to absorb the business that will be leaving the trade shows.
Move the top of the sales funnel online. The first opportunity for line reps will be to move the initial stages of the buying process online, by giving buyers easy ways to identify what lines they should carry in their stores.
Blogs, social networks, and new tools like Twitter allow a line rep to develop and maintain contact with many more people, and contact them more frequently than with a telephone or e-mail alone. Internet tools make the sales funnel wider at the top and allow salespeople to pre-qualify buyers with much less expense. These cost savings allow them to give the buyers more personal support later in the sales process. Reps who learn how to use the Internet to manage their sales process will be able to get more leads at a lower cost.
Success will depend on control of information. It is no secret that we are doing business in an information economy, where fortunes are won and lost based on how much and what kind of information the players have. Line reps might think they are just selling clothes, but they have a much greater investment in the information that they control.
Line reps already control a lot of informal information, collected through their many contacts with both vendors and retailers. They have a strong sense of which products are selling now, what will be selling next season, and which products are right for different types of stores. In the future, this information will become even more important and will be augmented with accurate sales data from point-of-sale machines. Coupled with a detailed understanding of the character of individual stores and their customers, line reps will be able to accurately pair buyers and lines in ways that manufacturers will not be able to do alone.
Success requires more training and education. One of the prevalent industry themes post-market-crash is a return to business fundamentals. Manufacturers and consultants are urging retailers to strengthen their knowledge of merchandising, inventory control, open-to-buy analysis, and marketing. Independent speciality retail is marked with high turnover, meaning that many of a vendor’s retailers are new to the business. Inexperienced retailers bring innovation and passion, but they often lack a solid understanding of business fundamentals. Too many retailers have been able to survive with only basic business skills, often relying on solid foot traffic and strong cash flow to mask fundamental weaknesses in the business. The post-recession economy won’t allow these weak business to survive.
If retailers are suffering, so too are the line reps and vendors who depend on retail sales. Both line reps and vendors would benefit from a more skilled retail force, and both are well-positioned to facilitate and promote business training for retailers.
The first step is for line reps to encourage retailers to join organizations like the Board Retailers Association or the National Retail Federation and participate in their training and education programs.
Line reps can also develop their own training programs in conjunction with manufacturers to teach retailers the most effective ways to promote and sell the lines they carry. This is traditional product training, a practice common in other industries, but rare in apparel. The best product training is a partnership between retailers and vendors that is increasingly critical because consumers expect a higher level of service from independent and speciality retailers.
In the apparel industry, with much less complex products than, for instance, electronics retailers, product training should be as much about how to select, promote, and display products as how to describe them to customers. Line reps, with frequent interactions with a diversity of retailers and vendors, are uniquely positioned to understand broad trends and recommend the best products to stock in a particular store and the best methods for promoting those products. Successful line reps will learn how to capture and process the information they already have access to and then profit by transferring that information to retailers and increasing sales for vendors.
How to Prepare for the Future
Line reps can prepare their businesses for the future by getting online, learning about recent Web tools, exploring them, and seeing how they fit into their businesses.
Some of the technologies that line reps should be exploring are:
- Basic websites
- Online photography and video
- Social networking
Line reps should become familiar with the popular and innovative consumer Web services, such as:
Most of these websites help consumers find new brands, and they all have innovative use of photography, video, and social networking.
Spend time on the Web visiting the websites of line reps and showrooms like the bluebird showroom and observe what vendors like LnA are doing on their websites and their Myspace pages. Visit online sales training company 3point5 for a glimpse of what is possible in online sales and product training.
The Internet has redefined entire industries, with the fashion and apparel industry being a late holdout. With the combination of the recession and the maturing Internet, the apparel industry can’t hold out any longer. Line reps who embrace the changes now will be best positioned to capitalize on the post-recession trends and grow their businesses.
Thank you to Nicole L. Reyhle and Kathleen Fasanella for the comments, corrections, and important ideas.
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Well written. This really covers the depth of what reps face today, as well as it offers retailers an opportunity to better understand how reps work.
I also agree that retailers need to strengthen their knowledge of industry standards, such as merchandising and open to buy. I also think it’s important that reps understand retailers needs – such as merchandising – even if it is not specific to their direct role. Understanding how their product will influence this in retail stores, however, can help with their sales pitch.
Great article. All reps should read it, even if they don’t plan to change their “old school” ways, it still provides them insight on how others are repping lines today.
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