Spring 2019 - Inside Outdoor Magazine

Inside Outdoor | SPRING 2019 35 models that include customization,” said McKinsey researchers. “As the mass-market apparel sec- tor moves to a demand-focused, agile supply model and labor costs increase, automation will play an important role in increasing labor efficiency, throughput, and flexibility,” they continued. “Auto- mation will be crucial to increasing the financial viability of on-demand near- and on-shoring models.” At any cost Beyond any shifts in cost and con- sumer demand, there is another factor of nearshoring and on-shoring that should interest outdoor apparel brands in particular: the sustainability angle. Once again similar to the need to shift focus from unit marginal cost advantages to speed advantages, apparel brands are feeling pressure to upgrade from basic compliance to an integrated sustainability strategy as consumers become increasingly aware and concerned over how their wares are made. Due to the inherent benefits of both geography and trans- parency, “moves to increase near- shoring and more automated pro- duction models,” McKinsey analysts argued, “have the potential to further enable sustainability and to support the adaptation of a circular economy in the apparel sector.” Even beyond the outdoor market, 78 percent of respondents to McKinsey’s surveys state that sustainability will be a key purchasing factor for mass- market apparel consumers by 2025. Adopting the position of a “truly circular fashion choice” is seen as highly likely to be a winning strategy by 2025 by more than a quarter of respondents. “Nearshoring and automation are important enablers in implementing a circular apparel value chain,” said the research firm. That’s not to say there are not sig- nificant challenges to moving produc- tion closer to home. In turn, McKinsey researchers are doubtful that major ap- parel brands and retailers will aspire to apply speed models to their full assort- ments. Rather, “to be successful, they will have to strike the right balance in a multimodal sourcing strategy in which low-cost countries and traditional pro- duction will continue to play a big role.” Even so, risk does not come from change but from inaction, warned McKinsey analysts, and the triangle of nearshoring, automation and sustain- ability will be increasingly key to deci- sion making. “The disruptions ahead are so pro- found that mass-market apparel players making big moves and capturing the advantages of nearshoring and auto- mation have the opportunity to build business models that drive growth and are hard for others to replicate,” they concluded. “Although apparel manufac- turing may not be coming home in the near future, some of the production will be at least moving ever closer – and mass-market apparel brands and retail- ers will want to be prepared.” m Made inAmericas