Latest / Exploring Fashion Futures With Dr.HB / 4 Skills Every Future Merchandiser Needs I Fashion Futures With Dr Hb Episode 15
Transcript
- 5c finale with logo full size: Welcome to my podcast, Exploring Fashion Futures with Dr. HB. My name is Dr. Jung Haberkshire. I'm a professor and the department chair of textile and apparel management at University of Missouri. I created this podcast to bridge between the industry professionals and college students in the fashion industry. So we can help you be able to find your spot in this gigantic fashion industry. So I hope this, my podcast and stories and the conversation with industry professionals will help you envision yourself as to what kind of future you can have in this great fashion industry. So today we're gonna talk about four skill sets that you might want to develop if you want to become a director of merchandiser in the future. Actually it might be four, but it also might not be people picture, it might be just one, but four specific things. so last week we talked with Rachel Ripley, who is the director of merchandising for Maxima Apparel that has specifically profession the licensing agreement with major sports team like NFL and NHLs and college teams so that when when she was talking about they're just w anxiously waiting to see where LeBron James will go, which team he will go so that they can make a new Hoodies and jackets and, pants and whatnot that has LeBron's name on, let's say new teams, or whatever that new team's gonna be. So so it's it's a sports team licensed product sportswear company. So that was that's really fun and interesting product category. But anyway, before that she was the director of merchandising for TRT the the swim wear company making swimsuits and goggles and swim caps and all all those hardware and software of the the swimming related product category. So she said that for you to be a merchandiser, she said you have to know both products and businesses, both creativity and analytics. We've been saying this all along throughout this podcast episodes, didn't we? But It was really it she was really highlighting the fact that the director of merchandiser really is in the hub of the all cross functional teams so that once the merchandisers merchandise, then designer gets to design, the sales get to make a sales plan and production team goes and source and logistic people decide, you know, what kind of logistic will happen. So what she was really saying is to do that, just knowing Excel is not enough. You also need to know the products and materials, the textiles, the fibers, the fabric content and stuff like that. So for example, obviously if this is a knit, you need to know all kinds of knit fabrics and if you need to know woven and in special water repellent products and any sort of textiles and materials and buttons and bill of materials basically. So she was actually saying, even though it was over ten something years ago, she said she still has that textile textbook on her desk. She still has that textile swatch kit. So at Mizzou,, and I think almost all university that has a fashion program, they do have a textile as a required class. And then most Textiles teacher, I know it. They use some sort of a textile swatch kit to it to teach you how each textile looks different, like a di how each fabric looks, feels, looks, react differently. bouquet, the jersey, one by one ribs, rip stop, which if it's a w woven fabric, twill fabric, plain wave fabric, if it's knit, double knit. There are so many different type of fabrics and those fabric gives you different hands, which means feels on your skin, the way you feel on your skin, the way it drapes, the way they get wrinkled or not. So and also like each fabric, because of the way they are woven or knitted, their strengths are different. Like their resistance, the water repellency, the burst strength or wear and tear effect. And all of that type of material knowledge is so important, she said. In her case, she started as a production person, more of a sourcing production assistant. And then she switched into the business side. And that's where she learned all these excels and all this way of analyzing the data. And then now she does both. So whether you start as a merchandiser planner and then you go into the products so that you become a merchandiser. Or you start it as a product and then you go to business and then merchant. At the end of the day, you gotta know the both sides of the business, she said it. So I think that the for product knowledge, she said about how important the knowledge of textiles is. And I totally agree with that. Without textiles, there's no clothing and no fashion. And there if there's no clothing and no apparel, then what are we what are we sell selling? What are we marketing, right? So textiles is fundamental and then associated accessories like embroidery, screen printing, reactive printing, chemical and buttons and zippers and embroideries and all of that type of production material knowledge and textiles is really important. That's number one. Number two was that business side of it. So the finance side of it, the retail meth, the fundamentals of retail met, how this math is happening. what is my total cost? What is my margin? So that what's my final retail price? And we all well, most of the programs like fashion programs have that retail math class. So she said that. But but what was really interesting what she said was that nowadays those retail math they're looking at the data and data analytics. She said I train my AI to look for the numbers the way I would look for it. So then Monday morning, instead of looking at that hundred fifty-seven raws of Excel data, instead of me trying to look at and try to find a needle in a haystack, I train my AI to find it for me. So by the time I come to the Monday morning office, the AI has done initial screening of my data and gave me already. So then I need to go and beyond what this data means, what this story means. How do I interpret this data numbers so that I can report to my boss about what's happening with this product and that product? And especially when you do that, you also know the style because you merchandised it and you work with the designer as to how to design and what kind of fabric, what kind of material you should put that into that garment style so that you really know, know the product and know the numbers. So knowing both of them. is really, really important. That's what she said. And I totally agree with you because that's what I did too. The third skill set she said, whether it's skills or knowledge, is the sourcing. So, you know, this global sourcing textbook is the one I wrote because that's what I was doing every day. And and back when I was a student and nobody taught me that. And I had to learn everything while I was working. So once I become a professor, I did write this textbook, Global Sourcing, that you can see in the back of my screen. So all of our students are learning from the sourcing textbook, and one of those textbook chapters talks about harmonized tariff schedule, HTS schedule number. What that means is that for every product, you know, for those who have internationally traveled, you have your own passport, right? So every country you go into or an every time you come into this country, you have to show your passport and see who you are, and then they review it and approve it, and you you can come enter into this country legally. Same thing, every product category, they have a product ID number basically. It's the tariff number. So like it's they have an ID number and you show that ID number and then this is what it is. So then based on this ID number, basically. there are different taxes you have to pay. You know, certain garments, if it's made out of synthetic fibers and made out of China, you have to pay forty seven percent of taxes. If this is a certain, you know, cotton pajamas coming out of El Salvador, it's zero percent because they have a free trade agreement with United States. So each country where where produ each product category has an ID number which call harmonized tariff schedule number. And then that schedule will tell you for this product, this product category, this ID number, if it's coming from these countries, 30% tax. If they are coming from these country, 17% tax. If these are coming from, you know, KB, then it's a 0% because of whatever trade agreement that America has with those countries. So she said she was looking at those all the time because she wanted to see I wanna move to another country because I wanna make this out of country B instead of country A. What does it mean? What kind of tax implication do I have? What kind of tariff implication do I have? And what if I change my fiber from cotton to polyester? Do I have to pay more taxes or not? All of that she had to know. So she said, I still have your sourcing textbook and I remember we were doing all that Homework and now I'm doing it every day. So, you know, once she knows it, she doesn't do that every day anymore. But when things were volatile and things are changing quickly, and these were very valuable knowledge to have. So having said that, do you have to know all of that? No, because things change all the time. The pol the trade agreement changes all the time. So all you need to know at this point, and there are such a things. That means there is a tax schedule is such out there. So if you are in that kind of role, you need to know enough to say we need to talk to if the trade lawyer to see if I were to bring this product from this country, how much tax do I have to pay? Because there are specialists out there. So even if you don't know specifically, you should know enough to ask questions. You should know enough that there are tax implications. So you need to talk to somebody who knows about it. Or at least you need to be able to, search HTS harmonized tariff schedules to see, hey, what are w if this is the category, then what's the ID number and what kind of tax implication do I have. So that was the third. The final story was that AI story that I just mentioned you earlier. Being able to tell a story from the data, whether with the help or with the help of AI or not, does not matter. How you find that stories, how you once you find the numbers or data, how can you talk about that data? How can you explain that data dynamics so that make a business decision based on the data, right? Whether because you know the product styles, whether you know the product colors, sizing decision, because of that the sales are good or bad or fluctuating. Or because of weather, because of whatever, why this data is trending this way and what this data means. So now that it's it has un expected really, really h high sell through, then maybe how do we then do the replenishment quickly to respond to that demand or not? Things like that. Understanding basic math is one thing because that's like, okay, you know, my cost is fifty I want to have at least $50 margin, so my retail will be $100. Understanding that math is one thing, but being able to tell a story based on the data and the numbers and and connecting those numbers with the product, the the characteristics of the product, so that you can really have a whole story. You know, this particular product did well because. whatever that reason it is, whether it's the field, the the uniqueness, whether it's a license, whether it's the name of LeBron, what sold this product, you know, well, you know, what what affected? What factor of that product affected these numbers of sales? Obviously we were talking about LeBron's example, because we do expect LeBron has a lot of followers. So changing the team, that means everybody Not everybody, a lot of people will buy a new jersey, whether, LeBron's fan or the new team's fan, that's that's a forecasting. But at the same time, even if it's a LeBron, but the timing of it, let's say weather just got too hot when you had all the sweaters ready. So that timing, the weather and that your timing of product availability doesn't fit sometimes. And a lot of seasonal product, like summer products, swimsuits and whatnot. If the so if the weather's not that hot, not many people buy right? Also all these winter products. What if we have El Nino so that the winter's not that cold, not much snow, then you don't have you're not gonna sell as much as the ski jackets and ski suits and whatnot. So sometimes it's it's being able to talk about those data using those macro level like whether it's a trade, whether it's war, whether it's weather, whether it's a politics or earthquake, this type of macro level environment affects your sales. It could happen, but sometimes it's a very micro level, like any person whose name called LeBron James, that one person's move can change the a sales dynamic completely. So you really have to have a hands and impulse on both micro macro level and micro level and then then understanding your customers' desires and behaviors to purchase behaviors so that you can talk about those stories along with your products because you have a product knowledge now. So so director of merchandising truly you have to have both creative side and analytic side. You need to know both products and materials but also math and business side knowledge and finally marry them together and being able to talk about and make stories about why things are happening the way they are. So that you can better predict it, you can better better predict the future sales. So next year you'll be a better merchandiser, but also you can quickly respond to see if you can replenish it. to take advantage of that hot a trend and season to generate more sales. And obviously because you also know the product, you can also be a big influencer in overall sustainability effort, especially if you want to use the raw materials that are more sustainable than your competitors, then you can also talk about the stories and how can we take advantage of our customers' desire for sustainability. for our sales and revenue generation. All of that is part of the merchandiser's role. So I hope that this was a helpful episode for you. I want you to really think about there are, you know, clothing price itself, there are so much more factors for you to consider, you know, the basic raw material, like how much does it cost for you to have the product? That's number one. And then how much tax do I have to pay because of trade agreement? Plus, is there any advertising dollars they have to sell add it to the cost so that you know we don't actually lose money? And plus I have to pay loyalty if I use somebody else's copyrighted product. And then I have to have my own company's margin so I can use that money to pay my people and pay the pay the utility and if we have any loan, I have to pay the interest. So all of that, typically industry, large companies like that, all of that's about ninety percent. So that about ten percent net profit before taxes is is their target. Eight to twill percent is their target. So it's a tough business, but a lot of costs are associated when you think about it, when you buy a forty dollar t shirt, about four dollars really go to as a net. profit, the rest are going out to all over, meaning, you know, factories overseas who are making the clothing, and then logistic company who are shipping those products, and then taxes that government takes them, and then loyalty, whoever that royalty, whoever that has the intellectual property, and then advertisers, all the Facebooks and Instagram, they also get paid. So that My $40 retail price will give $4 of net profit to that company. So that's interesting journey of the product category costing, isn't it? So those are the all the things that merchandiser think about all day long. So I hope you enjoyed this episode and I hope many of you become a merchandiser one day, especially if you know if you like both products and data. Having said that, if you have any more questions, please drop. in the comments section below and I will read your comment and I'll get back to you with my perspectives in the next episode. Until then, have a good day and good night. Bye bye.