Martijn Hagman, Tommy Hilfiger and PVH Global CEO, Talks the Challenges and Benefits of Digitalization
There’s no question 3D designs and digitalization have transformed the fashion business, but what are the challenges, opportunities and most efficient ways to scale it?
That was the topic of conversation between Martijn Hagman, chief executive officer of Tommy Hilfiger Global and PVH Europe, and James Fallon, editorial director of WWD, in a broad-sweeping conversation at the Fairchild Media Group Tech Forum.
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They explored such topics as supply chain pressures, on demand manufacturing, gaming, avatars, connected retail, 3D design and development, digital transformation and getting vendors and factories up to speed digitally in a session titled, “Modernizing Fashion’s Value Chain.”
WWD: Tommy was one of the early adopters of 3D design and development given the creative offices in both New York and Amsterdam. Can you talk us through some of the background of that, and the advantages it has given you as a company?
Martijn Hagman: I think 3D is very interesting and exciting for all of us. What we always aim for as a fashion brand is to be close to the consumer, to be fast, to be sustainable and to be efficient. 3D is clearly a solution for that. It really helps us to achieve all those objectives that we have for our brands and the way we operate. What is unlocking the potential and also a challenge is how do you scale it efficiently, and how do you embed it in your day-to-day thinking and day-to-day working to really achieve all those benefits. That’s a piece of 3D that’s often forgotten. It’s really hard work and it really requires transformation, but once you are at a certain state, there are a lot of benefits.
WWD: You mention the challenges, is the scaling up the main challenge?
M.H.: Yes, I think the scaling up, for sure, because everybody can do 3D design. That’s not something new and it’s not difficult if you do it for a couple of pieces. But if you want to do it consistently season after season, for 10,000 sku’s, or more, that’s hard. Then you need to have a very efficient process, you have a high level of automation, you need to have a very high level of standardization and you need a very, very robust work flow. Otherwise, it’s too time consuming and too costly. It’s also why internally we started a corporate start-up called Stitch, solely focused on that. How can we really scale this efficiently, and how can we support the organization and the transformation? For designers, this is new, and they have been trained and educated to work with 3D design. It requires upskilling and reskilling and creating new capabilities within the organization.
WWD: Is it also difficult then to communicate that to your factories worldwide?
M.H.: That’s definitely part of the transformation. We all know that the fashion industry is analog at best, and not so efficient. That’s a transformation as well on the vendor side. What you see happening now is you talk about strategic partners and strategic vendors. One of the requirements is that they are also investing in 3D design capabilities. As we need to transform and we need to invest, they need to do the same on their end. Then it’s about connecting.
WWD: 3D is much more than design, you actually pushed it down to your digital showrooms and digital selling tools as well. Is that correct?
M.H.: Yes, that’s correct. Of course there’s a benefit on the design process as such and the development process as such, and from there the manufacturing process. Once you have a 3D asset, you can use it in many different ways. We are indeed uploading those 3D assets directly into our digital showrooms. We use it directly for b-to-b-selling. Over the past year, where we had to work remotely, we could connect to our b-to-b customers through our digital showrooms remotely and show them our digital assets, and they were buying off those digital assets. Clearly, a benefit there, and a commercial opportunity. And a similar thing is happening in our direct-to-consumer channels. We’re also seeing digital-only assets are uploaded on direct-to-consumer platforms and being used for sales activities.
WWD: Is there another step beyond that? How are you further developing those selling tools?
M.H.: I think there are many steps beyond that. That’s the exciting piece about 3D. What we’re talking about now is in a way the beginning. Imagine if your entire collection is in a very early stage available as a 3D asset… Think about the marketing experiences for membership platforms, loyalty activities to bring it to the gaming industry and through the gaming industry, connect with a younger consumer and use their 3D assets in those environments. I think there are many, many avenues where you will see digital assets being utilized. That’s also the reality of where the business is going and where the world is probably going. There’s a continuous merge of the physical world and the digital world. I guess soon we will all have a digital version of ourselves.
WWD: You mentioned gaming. Tommy was one of the first brands to move into Animal Crossing and the gaming world. Are you looking even more at VR and AR as experiences for both the wholesale customer and the d-to-c side?
M.H.: Yes, it’s continuously developing and there are more and more commercial uses coming for VR and AR. I think it has enormous opportunity, if you think about offering a unique experience to our end consumers. In a way, if you have the best available VR technology, everybody can constantly be on the front row and I think that’s super exciting. If the mobile phone technology continues to develop, it’s the perfect AR and it’s available for everybody. I do see continuous commercial applications arising in the AR and VR world, and gaming itself is huge, and all brands are seeing the opportunities there as well.
WWD: As the industry aims for close loop or circularity, could it be you use the gaming side to test a product on the consumer, and depending upon on demand, put that into production? Could that be the end goal?
M.H.: That’s definitely part of the thinking. Not just gaming, but all sorts of commercial activities you can employ. More and more we’ll see that the fashion industry will move to on-demand manufacturing, and for on demand, you first need to test, either co-create or have people give feedback or response, have pre-orders and then you start production. Digital allows that. Once you have those digital tools and people can virtually try it on, then people can also give feedback and comments and the inputs and make a decision to buy from that digital version only. You’ll see more and more coming over the next years.
WWD: We’ve talked a lot about the digital world obviously, but how do you bring that digital world into the physical brick-and-mortar side? Both with your own stores but also with your retail partners?
M.H.: Today, you hear a lot about connected retail. It’s the connection of that digital world, the online world, our own platform, as a pure play platform, partners’ platforms with physical stores. That’s connected retail that’s happening right now. End consumers can shop between them pretty seamlessly and inventories are elevated between those channels. Certain advantages offline are now moving online, such as virtual try-ons happening online. The next merge we’ll see is classic commerce and crypto-commerce starting to blend into one wallet. Consumers will have a physical wardrobe and they’ll have a digital wardrobe. That’s on the horizon.
WWD: You mention some of those challenges, but what are some of the opportunities you see in the years ahead?
M.H.: I touched on a few. As we further scale when it comes to digital product development, it unlocks a lot of commercial opportunity, a lot of brand opportunity. What really excites me also is coming out of this period, coming out may be a strong word. At least we see some light and reflecting on the last 15 months, we saw a lot of focus on health, on environment, on inclusion and diversity, on things that really matter in life. I think that’s great and that momentum is fantastic and I hope we can leverage that momentum to take a hard look how we are organized as a business, how are we organized as the fashion industry, and when we think about topics like circularity, sustainability, digitalization, how can we take those learnings to get acceleration and really drive fashion forward for good. I think that’s a huge opportunity, and of course, the whole digitalization is a strong enabler to achieve all that.
AUDIENCE QUESTION: As you bring technology to fashion, what other industries do you look to for inspiration?
M.H.: That’s a good question. As I mentioned, the fashion industry is not really famous for being advanced when it comes to technology and data. We do look at other industries. I think there’s a lot to learn from the automotive industry on how they increase their efficiency and how they became more sustainable. And of course we also look a lot to the tech companies, especially how they deal with data and all the insights they get from data and how they apply to their business model.
AUDIENCE QUESTION: Do you believe that 3D will eventually be throughout the entire sampling process?
M.H.: I think so. Today, if I look at our Tommy business, we have about 80 percent of the product groups that we design in 3D. Certain products groups are still somewhat more difficult to design in 3D, think about jeans and sweaters perhaps, we just need to invest more, and get the technology a little bit up to higher standards. I strongly believe that eventually and not that long from now, we will be designing digitally all our product groups.
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