Shelley E. Kohan (00:03)
Hi everybody, thanks for joining our weekly podcast, Retail Unwrapped. I’m Shelley Kohan and I’m excited to welcome back Liza Amlani Welcome back.

Liza Amlani (00:15)
Thanks Shelley, I’m excited to be here!

Shelley E. Kohan (00:18)
It’s always a pleasure having you on. I always learn so much when you come on. Of course, we know you’re principal and founder of the Retail Strategy Group and co-author of a couple books, one that just came out, The Material Life. So we’re going to talk a little bit about that today. But you also co-authored The Wholesale. So welcome back.

Liza Amlani (00:36)
Thank you.

Shelley E. Kohan (00:38)
It’s an exciting time for retail. And before we jump into kind of the thought process behind the book and some of the key components of it, because I think we can all learn from that, I gotta ask you, NRF, what did you walk away with this year from the NRF? Because I saw you at the NRF for a brief moment when you weren’t doing all your moderations and speaking, so.

Liza Amlani (01:00)
Well, I have to say that NRF was a marathon as it always is, I think this one hit a bit different only because as you know, NRF Rev was something new, part of the big show, but in a different location, but same time. And what was interesting about NRF Rev is that there was this incredible focus on circularity, sustainability, returns, reverse logistics, and…

What was so wonderful was that there were conversations happening that were really meaningful and purposeful. So we have brands, retailers in the room that are really focused on those topics like sustainability and circularity and how reverse logistics impacts maybe the bigger strategic goal. And then there were also nonprofits in the room. There were ⁓

also solution providers of course in the room. And what I was excited to do at part of that show was I led three round table discussions. So the way the show was formatted was we had our keynotes and then there were breaks between the keynotes so that people could go like upstairs and it was like this huge room with all these round tables and they had experts and industry leaders to lead round table discussions.

And I do have some highlights, but I’m going to pause it for a second.

Shelley E. Kohan (02:32)
I was gonna say, I know it’s all secret stuff behind closed doors, but can you share any kind of, maybe some key takeaways, what you learned?

Liza Amlani (02:40)
Yes, I think the first thing was that returns are not just an operation problem. They are a product creation problem rooted in materials, fit and design. So think of reason codes as a great example, training employees, frontline to connect with what’s happening in the DC when sorting is happening, ⁓ having the right

return codes is very important and having the employees match return codes to ⁓ what’s happening in terms of insights going back to the Merchant Design Team, for example, if there’s an issue with fit, right? ⁓ And I think having just the use of technology to help us do that faster and better and more accurately, I think that was a really big takeaway, but.

Returns should shape how products are designed, how they’re developed and how they’re bought and right now I don’t believe that’s happening But there it can happen

Shelley E. Kohan (03:45)
I,

and it should happen and going back to your first point about sustainability, if you think about it, returns are a big sustainability issue because the higher the reports, the more stuff, the more it gets put back, then it doesn’t, I mean, it’s like, if you could solve it at the beginning design process, you can reduce ⁓ some of that impact on our planet too, right?

Liza Amlani (03:55)
yes.

Yes.

Exactly, and I think the real fix here is preventing returns instead of mitigating them. So that was my biggest takeaway from NRF Rev. Absolutely loved it. It was amazing. And then ⁓ I was lucky enough to also go to the Foundation Honors Dinner, so that was really, really nice. They honored Fran Horowitz of Abercrombie, and it was lovely. So I think it really humanized why we’re in retail in the first place, and I just, you know, just giving back to the students and…

Shelley E. Kohan (04:13)
Bye!

Of course.

Liza Amlani (04:39)
⁓ seeing how these retail executives have really embedded their journey in people and I think that is what NRF was really about this year.

Shelley E. Kohan (04:51)
That’s great. ⁓ I love that. That’s a whole different take on NRF than what I’ve gotten from a lot of other people. So thanks for sharing that. ⁓ That’s a whole other podcast. All right, so let’s talk about the material life. So first, just kind of give our audience just a little kind of high level view of what’s the book about and what is your intention with the book.

Liza Amlani (05:01)
yes. I didn’t even get into the big show, but we can do that later. That’s a whole other podcast. Yes.

So the core idea of the material life is that

the how matters more than the what. Meaning the way we go to market and create products matters more than what we’re

Now let that sit for a minute because that’s something coming from a merchant of 20 years. That’s not very common, right, for a merchant anyway.

Shelley E. Kohan (05:45)
Right.

Liza Amlani (05:48)
I’ll give you an example. Here’s what I’ve observed, having this career in retail for over 20 years, merchandising, product creation. When I was with Ralph Lauren, for example, I was never involved in the design function or the sourcing function, or I never visited a factory floor. It’s never been something that merchants really do unless they’re at a super high level.

But it is not it’s not common. So the focus is really on What is the assortment? What is how will the consumer react to the assortment? You know, what is the? execution of the merchandising strategy on the shop floor and it’s really rare that a merchant will see a factory floor and Because merchants are not exposed to this and we leave it with sourcing and product development. What’s happening is

costly industry problems like overdevelopment like excess inventory like this extended time to get to market These things are happening Because merchants spend time downstream versus upstream Yeah, so that’s really the core ⁓ I guess it’s a core message of the material life. Yeah

Shelley E. Kohan (06:50)
Mm-hmm.

That’s

great. And I know there’s so many companies out there that are really focused on product innovation, product innovation, product innovation, but you have kind of a different spin. You’re really talking about process innovation. So tell me a little bit about that.

Liza Amlani (07:30)
Now this is really the theme of the entire book is that process innovation is the most underrated opportunity in the supply chain, specifically in fashion. And what we talk about is this concept of being materialistic and implementing material direction in the product creation calendar, elevating teams to collaborate more and design into materials versus going to market.

and creating new materials, which is directly connected to sustainability initiatives. And the market’s already thinking about this because the market has already expressed that materials are the foundation of a product. Let’s say garment. Fabric is the franchise. Think Lululemon, Viore, Uniqlo, right? The market has already expressed that.

Materials are the foundation of the product and fabric is the foundation. But even if this is the case, if we look at the product creation process, typically is not required to design into these materials. The concept to market process has always been design leading when it really should be materials leading.

Shelley E. Kohan (08:51)
Right.

Wow, that’s a big change, mindset change, isn’t it?

Liza Amlani (08:58)
It absolutely is. And the way that we think about this process change, we really need to think about it across every single function in the product creation process. Whether we’re talking to sourcing, supply chain, product development, tech designers, or merchants and planners who are starting to develop a line plan architecture all the way to the assortment plan.

It’s really connecting those internal cross-functional teams to meaningfully eliminate a lot of those silos because now we are not only talking about materials at every milestone because we’re leading with materials, we are reducing significant unnecessary development because even when we think of the line plan, if we add in

you know, this is the material that we’re going to use for this capsule or this collection in the delivery, we know that that is going to be a constant and we’re not going to see rework later.

Shelley E. Kohan (10:03)
That’s great. I think so I got to reflect back on something you’ve said a second ago about merchants don’t normally visit factories. And I have to say since the pandemic.

Liza Amlani (10:10)
Mmm.

Shelley E. Kohan (10:13)
I think you have a great opportunity right now to really get this message out because CEOs are visiting factories because of everything that’s gone on with supply chain over the past five, six years. So I think it’s a great opportunity to kind of make impact on this movement. The other thing that you always talk about is you talk about this creation calendar having multiple tracks. You know, what does that mean and why is that something that we should be thinking about as retailers or brands?

Liza Amlani (10:20)
Mm-hmm.

Mm-hmm.

Well, this is a great tie-in to what we call AI, which is actually acceptable inequality. And I know I’ve talked about this in, I think, some of your classes, right? And it is about innovating the product creation calendar to include multiple tracks. So when we think about how apparel is created today, and this is really almost category agnostic, because if you think about apparel, footwear, accessories, even…

Shelley E. Kohan (10:51)
Yes.

Liza Amlani (11:11)
home decor and textiles within home. The single track calendar, it assumes that all products are equal and as such all products are created equally. But the reality check is that single tracks have their limits. And once those limits are hit, single tracks contribute to excess inventory and it overburdens vendors. So,

process innovation here is needed to involve the single track calendar into multiple tracks. And the intention of it is to misalign, well, really it’s to remove that inherent misalignment of product from its value chain. So think of it this way. If tracks are created by product type seasonality, think seasonless versus core versus seasonal fashion, and

Shelley E. Kohan (12:04)
Mm-hmm.

Liza Amlani (12:07)
design and development complexity, then the tracks can be further distinguished by the extent of digital product creation. So keep seasonal, season-less items strictly on digital since they reoccur every season or every other season. Reserve physical sampling and prototyping for like an innovation track or something, you know, highly complex. And then capsules.

are smaller than the main season. Let’s say you have ⁓ a collab with another brand. Think, you know, I mean, there’s so many other, I won’t even get into it. But think of Capsule Collections, which are smaller than the main season, so they’d need fewer touch points, so they’ll be a smaller track. And then you have Fast Track, which is triggered by market signals, launching closer to market, shorter timelines. And that track can use tactics like postponement, for example.

Shelley E. Kohan (12:44)
you

And so when you’re trying to manage, I’m not a merchant like you’re a merchant. I understand merchandising and I understand the functions of merchandising, but you’re the true merchant. So when you think about having these multiple tracks and you’re a big company, how are you managing all this? Is this easy to manage? Is there transparency? Is there digital databases that help with adjustments and flexibility and agility in these multiple tracks?

Liza Amlani (13:33)
Definitely. I think the way that we need to think about implementing multiple tracks within our current process is when you have, for example, a fast track, which is very market reactive, you’re going to have a pod to approve those. Anything that needs approving, and it’s much more simplified than your regular track calendar, so that those decisions will be faster so that you get to market faster. Because ideally, you

What does every merchant want? Full price sales, closer to market, understanding what the consumer wants, closer to the season that we’re gonna sell it. And if we take a step back and we look at what do our calendars look like today? Well, they’re at least a year. It takes 52 weeks sometimes, right, to get from concept to market, sometimes longer. And if it’s longer, it means you have overlapping calendars.

Shelley E. Kohan (14:21)
Yeah.

Liza Amlani (14:30)
and you’re working on multiple seasons at a time, it gets even more complicated. And you’re getting even further away from the customer. And what happens is you have a lot more overdevelopment, a lot more rework, a lot more guessing what the consumer wants. And then add in technology. Well, I think that teams will probably break, right? I mean, what we’re seeing today, and I’ve seen it, ⁓ you know, in some of the teams that I’ve worked with even.

recently is that we’ll have one category working on almost all digital product creation, but they’re still following the same calendar. So even though they’re designed to go faster, right, they still have to wait for approval. So that’s why in some cases you’re going to have different tracks for different types of products.

Shelley E. Kohan (15:23)
Yeah, think part of that is ⁓ it’s difficult changing the mindset. You know, can put the process in place, but I think the most difficult thing is changing the people’s mindset. ⁓ It kind of…

Liza Amlani (15:29)
yes. ⁓

Absolutely. Especially in

fashion and retail because we are so used to working in these retail silos, these highly matrixed organizations, especially with obviously the larger organizations, that thinking how we can innovate the process has to come from leadership, right? It has to come from leadership and it has to say, okay, you know, we’re just gonna find out what it, how is our culture reacting to change today?

And how do we break down those silos so that those cultures are a lot more open to innovation, to change, to implementing technology in the right way, in the right place?

Shelley E. Kohan (16:14)
It’s kind of funny, Liza, because you’ll get a kick out of this. So you just gave me a big flashback. So ⁓ back, I don’t know, I’m going to say 10 years ago, I swear to God, most of my job was trying to convince retailers to use analytics. And it was really hard because buyers would say, I know what sells. I know my customer. I want to get this. And analytics would say, don’t buy that, buy this. And trying to convince them, it was a whole.

Liza Amlani (16:19)
Ha ha.

Ha ha.

Shelley E. Kohan (16:39)
whole huge issue in changing the mindset of the buyers and I feel now you’re kind of at this crossroads on the production side.

Liza Amlani (16:48)
Definitely. And to add what you just said, and such a great point, is that today these retail cross-functional teams across every cross-function, maybe except marketing, don’t really trust the technology, right? And even though we say that they’re involved in the decision-making process, are we really understanding how each cross-function

is touched by a new technology. And I gave this example yesterday on a webinar where we talked about the implementation of a PLM. Now a PLM is like you need a great PLM, something robust where if you do start to digitize your materials, it can actually house them. It can talk to the vendor. The vendor can collaborate. Like PLM is going to help you get your product to market.

faster in the most efficient way possible. But if you’re not involving planning, forecasting, and even even merchandising, right, in how you are building the criteria to either engage with a PLM or not, then that is a massive massive miss because planning their numbers

Their forecasts need to be visible in, like, when we create our vendor orders, right? I have seen many, many duct tape together solutions that talk to this amazing PLM but it’s a mess because you’re not really engaging with all the teams that are touching it.

Shelley E. Kohan (18:24)
Yeah.

Yeah, the collaboration is so important. Let’s talk about, tell me a little bit about, there’s tons of technology out there, but tell me, how does technology play a role here and what can companies do in terms of implementing the right technology or softwares? What should they be thinking about?

Liza Amlani (18:45)
Yes.

So, you know, I can’t take credit for this particular phrase, but I do believe we need to balance the tech and touch wherever we decide to implement it. And I think it was from Nesbit’s book in like 1987, and he talks about this balance of ⁓ technology and human touch, and it’s exactly what we need today. So if we think about the self-

Checkout example. This is great example that’s very fitting for today, right? When we lean too much into the tech, it fails. Amazon Go, great example, right? They’re closing all their stores. ⁓ But when I go shopping at Walmart, there are associates in the self-checkout lane, and they help the customer through any sort of friction when they are trying to self-checkout. And there’s always friction, right?

Shelley E. Kohan (19:35)
Mm-hmm.

Liza Amlani (19:55)
But that’s where that balance of tech and touch is working. And the customer is able to choose which lane they want to go. Do they want self-checkout or do they want the human touch 100 %? So tech is supposed to be a tool. And trying to bolt technology onto outdated processes and hoping for progress is such a big waste of time and money. And I think that’s something we all need to come to terms with. So balancing that tech with

human touch, making sure that we are aligning with how our customer wants to engage with us, how our internal teams want to engage with us, and how we want to advance in things like digital product creation and digitizing material libraries. All of these things are great if they work. And if we understand, OK, do we need a librarian when we have a digital materials library? Yes, we do.

because then the design team can have help when they are looking to design into existing materials, which is something we also talk about in our book.

Shelley E. Kohan (21:03)
that’s amazing. I never even thought about it. But now that you say that, makes perfect sense. Of course you do, right? You got to be able to go through all the content quickly. And you need someone who’s proficient at that. ⁓ That’s amazing. So if you had to leave like closing thought,

If you had to say run, don’t walk, do these things, what would those things be? Would there be a few things? mean, what’s your big advice for retailers and brands out there today going into 26 and 27?

Liza Amlani (21:34)
Really understanding where overdevelopment is happening. I have talked to a few retailers that have really acknowledged that overdevelopment is happening. It’s something that we saw in our report. was the number one issue that brand and retail executives and manufacturers highlighted as a challenge, as overdevelopment as a challenge. If we think about it from a material standpoint and a product standpoint, so just separating them, I’d say…

do that first. And if you already have visibility into your overdevelopment of materials, you’re halfway there. So that’s great. But what we need to do is also understand how does that material that we’re choosing, so this is fabric, print, color, how does that journey align with product that’s being developed? If we have overdevelopment of product, let’s say after assortment lock,

We’re changing things, we’re changing colors, we’re adding. I’ve done it, I know what happens. Are we choosing, are we choosing existing materials? Is that a requirement? So really looking at overdevelopment as a whole, I think that’s really important. And that is directly going to connect with your profit, your margin, right? How much time it’s gonna take you to get to market. So it’s really going to shorten.

Shelley E. Kohan (22:39)
No, it never happens. Come on. ⁓

Liza Amlani (23:04)
and eliminate some of those things which are big problems today. It’s also, sorry, go ahead.

Shelley E. Kohan (23:08)
Yeah, and no,

no, I was just going to say that that’s, you know, reducing the time, reducing the markdowns, reducing the waste. That’s all cost of goods. That’s margin. 100 % break to the margin.

Liza Amlani (23:21)
It is.

And you and I both know, and everyone that’s going to listen to this knows, that that cost that we think is free, because we think the vendor is paying for all that extra unnecessary development, whether it is material or product, it is going to be charged back to the brand. And every CFO will agree with me that it is a line item. But we don’t see that.

Shelley E. Kohan (23:43)
Thanks

Liza Amlani (23:50)
while we’re creating the product. So there is a cost associated with working in this way. And this is exactly why we need to really dig into how we’re creating the product versus what we’re creating from a merchant.

Shelley E. Kohan (24:07)
Love it. Thank you so much. I appreciate you coming on and sharing that. And of course your book, Material Life, is great. And for anyone that’s listening, I mean, I’ll toot your own horn.

But my favorite newsletter is The Merchant Life. I think it’s great, it’s always on topic, so subscribe to The Merchant Life, especially if you’re interested in all things merchant and updated, you know, processes and all kinds of fun nuggets that are in your newsletter that you put out. So thank you for helping us be better retailers and merchants and brands.

Liza Amlani (24:19)
You

Thank you.

Thanks Shelley. And you can find the Merchant Life newsletter at themerchantlife.com is where you subscribe. You can find the every newsletter on our website as well. And I post a lot on LinkedIn, so feel free to get in touch and let’s talk about materials.

Shelley E. Kohan (25:00)
Awesome, thank you.