ETC Managing Director Mark Bienstock was featured in California Apparel News in their discussion of how brands are investing in crucial digital tools and traditional methods to reach customers. Click here to read the full article!
Recycled Retail
By; Carli Valinoti, Express Trade Capital
One of the newest sustainability trends is making old garments new again. Evrnu, a Seattle-based textile-technology startup, is making old clothes and fabrics into new fibers that can be used for recyclable fashion.
Although their products are still being tested, Evrnu has just launched a limited run of recyclable unisex sweatshirts for Adidas by Stella McCartney, calling them “EVER-new.” The hoodies will not be available for the public until 2020 but will be given to athletes to promote the new sustainable line. “Right now, in the U.S., consumers dispose of about 80% of their textiles directly into their garbage can. That’s the behavior we’re really trying to tackle,” said Stacy Flynn, chief executive and co-founder of Evrnu. Recycled textiles can be made into premium fibers which can be dyed and woven into new fabrics made for all different types and styles of clothing. In 2016, Evrnu teamed up with Levi’s Jeans and launched a prototype of jeans made only from repurposed cotton T-shirts.
Consumers are becoming more aware of certain industries’ toll on the environment, including the fashion industry. Although creating new fibers still has some detrimental impact, the process uses a fraction of the amount of energy and chemicals used to make polyester clothing. These recycled garments may end up having a higher price-point, but as more people become aware of how sustainability can help the environment, people may be willing to pay more.
ETC takes great pride in working with sustainable and eco-friendly companies. Contact us for all your factoring needs!
Ecommerce and Store Closures on the Rise
Sadie Keljikian, Express Trade Capital
Although fears of a “retailpocalypse” have mostly died down, the retail landscape is certainly shifting in favor of ecommerce, with more than 5,000 brick and mortar closures already announced in 2019. Many of the closures come from high-profile retailers like Gap, J.C. Penney, Abercrombie & Fitch, Tesla and Victoria’s Secret. Even Amazon has announced that it will close all 87 of its pop-up shops in Kohl’s, Whole Foods and malls nationwide.
A recent UBS study predicted that online sales will make up 26% of overall retail sales by 2026, from 16% today. Assuming current trends persist, roughly 75,000 more retail locations will close in that time. This amounts to approximately 8,000-8,500 closures per 1% increase in online sales. Amazon is expected to account for about half of the ecommerce market in the US at the end of the seven-year projection period. Of the 75,000 predicted closures, 21,000 clothing stores, 10,000 consumer electronics stores, 8,000 home goods stores, 7,000 grocery stores and 1,000 home improvement stores are expected to shutter.
Only time will tell whether these projections will come true, but on the bright side, Lasser and Sole say that the closures “should help the store productivity of surviving locations.”
Mark Bienstock Talks Slowing Economy with CAN
ETC Managing Director Mark Bienstock was featured in California Apparel News last week in their discussion of the slowing economy and how apparel companies can manage it. Click here to read the full article!
Tech Shakes Up Retail
Sadie Keljikian, Express Trade Capital
As technology becomes increasingly present in our daily lives, it changes the way we do nearly everything, most notably how we buy and sell products. Keeping up with the intricacies of digital sales can be overwhelming, particularly given the ever-evolving nature of technological functionality. Here are a few of the latest and most prominent ways in which technology has revolutionized sales techniques.
- Multi-channel approach.
Contrary to popular belief, physical store locations are not going away entirely. With more ways than ever to reach prospects and customers, a multi-channel approach is essential to successful sales. Whether you’re selling consumer goods, commercial equipment, or anything else, it is important to integrate your online presence with any brick and mortar locations as seamlessly as possible.
The recent trend in previously online-only businesses opening store locations (Wayfair, Warby Parker, Casper, and Untuckit among them) is a great example of this. While modern consumers appreciate the convenience of ecommerce, they miss certain aspects of the in-store experience and frequently choose to blend their shopping methods.
This has proven particularly popular in industries like apparel, where consumers are hesitant to buy items they can’t try on, or large appliances and furniture, where consumers often prefer to see the item firsthand and ask questions before they make a final decision. Some apparel retailers have even opened mini-locations with limited samples of each item for customers to try on before they order them online.
- Personalization
Some big-box stores use augmented reality to provide an in-store experience from home. Target, for example, launched an AR feature in 2017 that allows customers to take a photo of a space in their home and see an approximation of furniture pieces and home goods as they would appear in the space. This personalizes and simplifies the selection process significantly in terms of dimensions and style and prevents unpleasant surprises when items arrive.
Additionally, methods like individually tailored sales emails and social media marketing based on curated data are becoming the most popular strategies businesses use to market and sell their products and services. Brands are also expected to not only cater to each customer’s lifestyle and esthetic preferences, but to their philosophical beliefs as well. As a result, companies that make a point of using charged imagery or pointed messages in the way they sell their products are often among the most successful.
- In-store tech.
Many retailers that depend primarily on in-store sales have begun incorporating technology into the customer’s experience at their locations. In some cases, they use virtual reality to add an element of fun in select store locations. Walmart’s tech incubator, Store No. 8 offers an immersive VR experience followed by a gift shop.
Others offer a visual search station for customers to locate the items they wish to buy, saving them the difficulty of finding the product they need on foot. Other retailers have begun using interactive apps that allow customers to learn more about a product by simply pointing their phone camera at its label. Luxury resorts have started offering AI services to allow guests to plan their visits and personalize their experience by communicating with chatbots. Grocery stores and department stores have even started using mobile robots to monitor obstructions in the aisles and customer reactions to free up human employees to assist customers.
Systems like these not only give the customer a better sense of engagement and control of their experience, they also offer retailers similar insight into their customers’ habits and preferences. Consequently, on-site technology can be as useful to market research as web traffic and sales numbers, allowing brands and stores to further optimize the way their customers’ experience and buying habits.
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Consumers have never had higher expectations of their retail experience. For big brands, this emphasizes the importance of diversifying their offerings and allowing their customers as many customizable options as possible. For smaller brands, it means homing in on the specific preferences and values that most accurately align with their target demographics. Ultimately, there are more ways than ever to use technology to guide product development and research markets, allowing brands and retailers to come up with solid solutions that allow their businesses to thrive.
ETC Team Attending Trade Shows in Las Vegas
Members of the ETC team are attending this week’s trade shows in Las Vegas. Join us at any of the following shows to learn how we can help your business grow and thrive!
Click to nominate your business for ETC’s new trade show grant.
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Managing Director Mark Bienstock Talks Trade War with California Apparel News
Business owners who rely on China’s abundant manufacturing facilities and low production costs may be in for a massive challenge. The ongoing trade war the US government has waged with China may not end by March, meaning more potential tariffs that could disrupt the global economy.
ETC’s own Mark Bienstock and other industry experts spoke to California Apparel News this week about strategies to protect yourself and your business from the effects of this ongoing international conflict.
Click here for details on our trade protection financing service.
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Tackling Common Problems, Part 1
Sadie Keljikian, Express Trade Capital
Running a wholesale business is financially and logistically complex. There’s a lot to monitor and numerous variables can force you, the business owner, to think and act quickly to effectively manage unforeseen difficulties. Fortunately, most of these difficulties fall into a few categories of common problems that come up for small to mid-sized businesses.
Since these issues are common, solutions are readily available, though perhaps not obvious to less experienced business owners. Addressing them is just a matter of having enough experience to know how best to do it. Here are a few examples of common hiccups for which new businesses might not be prepared and what to do if they come up:
- Problem: you’re a clothing designer and you decide to start producing and selling your designs independently. You have your designs and samples ready, you’ve sold some pieces direct to customers online, and you’ve even had promising discussions with local boutiques that would like to sell your pieces. There’s just one problem: you’re running this business by yourself and there’s no way you can produce the quantities the boutiques want in the given time frame. How can you get your business off the ground and establish a sustainable production structure?
Designers and inventors consistently run into the same problem: how can I produce the required amount of my product by the time my customer needs it without overextending my resources? There are a few ways to handle this. One is to simply turn down orders you can’t reasonably fulfill using your current production processes, but that means you’d miss out on opportunities for growth.
Another approach is to hire a team to manufacture your products on-site. This is an expensive option since it involves hiring new employees and acquiring new equipment, but it allows you to control product quality and directly and provides a foundation for increased output. As long as the business doesn’t grow more quickly than your overhead can accommodate, manufacturing on-site is a perfectly viable option.
Alternately, many designers and inventors choose to outsource their manufacturing processes, which removes the need for additional employees and specialized facilities. Some creators aren’t comfortable handing their designs over entirely, usually because they worry that their design will be plagiarized or that product quality will suffer. While quality and security concerns are valid, sufficient research and vetting will indicate whether a production facility is trustworthy. As long as you do your homework, outsourcing is an effective and efficient way to increase production.
- Problem: a buyer at a big-box retailer contacts you to place a huge order. Your production line is ready, but you soon realize that the cost of fulfilling such a big order will leave your operational funds severely depleted. You don’t want to pass up the opportunity to gain bigger customers and expand your business, so how can you fulfill the order without dipping into funds you need to run your business?
Many flourishing wholesalers lose traction because they pass on big orders from influential retailers out of fear that they’ll lose equity or acquire unmanageable debt. What a lot of new business owners don’t realize is that there are ways to supplement business-related costs that don’t involve expensive traditional-style loans.
One way to approach the issue is to apply for a line of credit with a bank or private financial institution. Just like a credit card, a line of credit allows you to defer expenses that might be prohibitive. As long as you and/or your business is creditworthy and you are able to pay on time, there is very little downside to securing a line of credit on behalf of your business.
Another option is to use alternative lending (or “alt lending”). Alt lending is a growing and thriving field in which lenders use creative financing methods, meaning that you don’t necessarily need perfect credit to receive funding. Private financial institutions who offer alt lending solutions can offer funding against purchase orders, invoices, equipment, and even unsold inventory. Most importantly, this method allows you to borrow small amounts as needed, rather than borrowing a lump sum and worrying that you’ll accrue excessive interest.
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ETC’s Mark Bienstock Talks Trade War with California Apparel News
The threat of increased tariffs is causing concern among US importers, wholesalers, retailers and consumers. California Apparel News has interviewed several industry experts, including ETC Managing Director Mark Bienstock, to gain some insight as to what we can expect going forward.
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Managing Director Mark Bienstock: Factoring in a Changing Retail Landscape
Managing Director Mark Bienstock spoke with California Apparel News yesterday. As part of a curated panel of trade finance experts, Mark discussed the changing retail landscape and consequential changes in the commercial lending industry.
In order to cope with the seismic shifts affecting trade at every level, lenders are either scaling back their services or bulking them up. With the consistent rise of e-commerce, wholesalers need fewer receivable loans and more inventory loans, even if they are selling similar or greater volumes. For lenders, flexibility is key to maintaining relevance in the apparel industry. Mark points out that an intimate understanding of apparel companies and their trajectory is vital to successfully financing them.
Click to read the full article.
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