1. 0 Randi Nolan Principal Kurt Salmon Associates

2. 1 “If a man can… make a better mousetrap… the world will make a beaten path to his door.” -Ralph Waldo Emerson, 1803-1882

3. 2 “If a man can… make a better mousetrap… the world will make a beaten path to his door.” -KSA, 2005 offerfashionable every 8-10 weeks, ^ all of his doors ^

4. 3 1.Define your consumer 2.Define product development strategy 3.Define assortment strategy/positioning 4. Accelerate speed to market 5. Balance efficiency and effectiveness 6. Integrate sourcing and development activities 7. Enhance information availability

5. 4 Effective Product Development Newness Speed Discipline

6. 5 Newness Speed Discipline

7. 6 Newness retail leaders see results 4.4 7.0% 5.5 6.8 16.2% 10.6% Turns Margin Turns Margin Turns Margin Traditional model Updated model Newness model 6.8 Source: KSA Analysis

8. 7 Finding the right new product

9. 8 Too many of today’s fashions are designed for younger consumers Clothing manufacturers don’t understand what styles I like Base: Total Respondents: % who agree strongly/somewhat Source: KSA Bi-annual Consumer Outlook Survey 2003 Chasing hot fashion frustrates consumers

10. 9 Have you defined your “Stephanie”? Clearly define your target consumer: Style Lifestyle Hobbies Entertainment Demographic

11. 10 Source: KSA Survey 2003 Have NOT defined a target consumer INEFFECTIVELY integrated consumer input into product development process “Stephanie” is not pervasive…

12. 11 Who is doing “newness” well… Talbots: We want customers to know that if they see something they love, they should buy it now, because it may not be here in a few weeks…” “…[Chico’s] has been able to sustain stellar sales growth over the past several years because of the retailer’s reputation for flowing in new merchandise. To the consumer, it creates a sense of urgency and the need to shop frequently.” –WWD, 02/24/04

13. 12 1.Define your consumer 2. Define assortment strategy/positioning 3.Define supply chain strategy 4. 5. 6. 7.

14. 13 Newness Speed Discipline

15. 14 Source: KSA Survey 2003 Comparing apples and oranges Retail Timeline Branded Wholesale Timeline Market Week Lead- times 6 Months 9 Months

16. 15 Today’s wholesale cycle times are highly inefficient -11-7-5-3 0 In-store Design begins before read on previous seasonal sales Seasonal overlap makes it impossible to “focus” Starting too early allows everyone to change their minds Issues Market Week - 13 Months 6-7 Months 5-6 Months -9 11-13 Months

17. 16 Retailers view of the timeline will shift 2007 -11-7-5-3 0 In-store - 13 Months -9 Today Market Week Fashion Injections (reserved OTB) Continuous “Market Week”

18. 17 Stop studying Zara!!! “[Zara] can design, produce and deliver a new garment and put it on display in its stores worldwide in a mere 15 days…” -Harvard Business Review 11/04

19. 18 Collaborative Spec Development / Transfer Activities to Vendors Elimination of Separate PD and Sourcing Groups Visibility to Product and Process Performance Tomorrow’s top 3 Phase Develop Decisions Create Greater Overlap of Design, Technical Development and Sourcing Create Strategic Alliances Today’s top 3 How can you reduce cycle time?

20. 19 Who is doing “speed” well…

21. 20 1.Define your consumer 2.Define product development strategy 3.Define assortment strategy/positioning 4. Accelerate speed to market 5. Balance efficiency and effectiveness 6. Integrate sourcing and development activities 7.

22. 21 Newness Speed Discipline

23. 22 Leaders have three traits 1.Integrated process/ calendar 2.Calendar management process and adherence 3.Planning throughout the supply chain

24. 23 A calendar or a marriage?

25. 24 Do you really have a calendar? Source: KSA Survey 2003 1. Integrated calendar 2. Calendar management process 3. Strong calendar adherance

26. 25 What’s your plan?

27. 26 How do the leaders instill discipline? Web-based PLM tools Collaborative Development and Product Information On-line Visibility to Process Tracking Alerts, Notifications, and Exception Management

28. 27 Discipline: Just Do It “…PLM tools, not only to help… manage information about their products, but also to… standardize the process that controls the commercialization of styles while [providing]… reporting visibility… -Paul Herring, CTO, Nike Apparel Magazine 12/01/04 “…PLM tools, not only to help… manage information about their products, but also to… standardize the process that controls the commercialization of styles while [providing]… reporting visibility… -Paul Herring, CTO, Nike Apparel Magazine 12/01/04

29. 28 1.Define your consumer 2.Define product development strategy 3.Define assortment strategy/positioning 4. Accelerate speed to market 5. Balance efficiency and effectiveness 6. Integrate sourcing and development activities 7. Enhance information availability

30. 29 1.Define your consumer 2.Define product development strategy 3.Define assortment strategy/positioning 4. Accelerate speed to market 5. Balance efficiency and effectiveness 6. Integrate sourcing and development activities 7. Enhance information availability

31. 30 Newness Speed Discipline

32. 31