Consumer focus, CBI parity top AAMA agenda - Caribbean Basin Initiative; American Apparel Manufacturers Assn

Without frequent and direct communication with its customers, the sewn products complex retailers, manufacturers and suppliers alike - will not prosper.

That was the strong message heard by the 160 executives attending the American Apparel Manufacturers Association's (AAMA) annual meeting this past May, which had "The Year of the Consumer" as its central theme.

To drive the point home, outgoing AAMA chairman Charles E. "Gus" Whalen Jr., CEO, The Warren Featherbone Co., set the stage for the meeting in Orlando, FL, at Walt Disney World, which has been noted time and time again as a corporation with world-class customer service benchmarks.

"Disney believes and understands that it's their customers that have created Disney. And Disney created a culture in which you and I [as consumers] could participate in and inspire them," said Whalen. "That is a very different way of looking at business and I think it's the best possible way."

The sewn products industry still has much to strive for in achieving this level of interaction, pointed out David Cole, chairman and CEO of Kurt Salmon Associates (KSA), who addressed the group during the opening presentation at the meeting. "Unfortunately, today we see an industry with very strong evidence that we are abandoning our consumers; putting them up for adoption and letting [other companies] earn their trust."

For example, KSA's Annual Consumer [Outlook.sup.sm] '98 Survey revealed that there currently is very little consumer testing of new products in the apparel market. "Less than half of the respondents [to the survey] regularly conduct any kind of direct consumer research," said Cole. "As a result, we have very little marketing development and very little consumer segmentation."

Only 29 percent of retailers capture store consumer purchase histories with some type of "loyal shopper card," store charge card or similar program, Cole added. And those collecting the information aren't doing much with it at the retail level: Only about 8 percent do some target marketing programs and only 6 percent segment their customer bases. Moreover, half of the retailers surveyed have absolutely no plans to track this information in the future.

Among those retailers looking to improve these numbers is JCPenney Co., noted chairman and CEO James Oesterreicher, who gave the meeting's closing presentation. He emphasized: "The decisions that we make today must be made faster than [at] any time in retailing history. As retailers and suppliers, neither of us can ever afford to get to a point where we think we have totally figured out customers. And what's worse than thinking we have figured them out is becoming in any way complacent.

"The ultimate success of our business - yours and mine - clearly relies on our ever-expanding knowledge of the millions of customers that we are trying to serve better," Oesterreicher added. "It's probably natural that some of us came here thinking we had a pretty good handle on what today's customer is all about. But after this program, I suspect that many of you are humbling down and will rededicate an even more intense customer focus."

Changing of the Guard

Marty Granoff, incoming chairman of the AAMA and chairman of Val D'or Inc., is hoping that AAMA member companies also will dedicate concentrated effort to his initiatives, which were introduced under the theme "The Year of Change." His focus will address the rapidly changing global economy and preparations for the new millennium under a three-pronged approach:

* Government relations and trade policy;

* Standards and ethics; and

* Membership services.

During his incoming address, Granoff noted that his top priority is CBI parity, which would afford apparel entering the United States from Central America and the Caribbean comparable treatment with products imported from Mexico under NAFTA. "In the emerging global economy, where mergers cross international lines, this is becoming more important than ever," said Granoff. "Our respect and effectiveness in Washington only will come from a presence, both financially and in number.

"CBI parity continues to be an elusive rainbow that we must continue to chase with passion, conviction and effort," Granoff added. "It is estimated that [AAMA members] pay more than $400 million annually in duties from the CBI region. Consider how much money your individual firm would save; it is probably the single biggest opportunity for most of our membership."

In addressing ethics and standards, the AAMA will introduce a new plan for compliance and monitoring, which will be 'proactive rather than reactive," noted Granoff. Additionally, based on findings of a recent membership survey that revealed a low level of participation among smaller AAMA companies, new services will be offered for these members. This will include a fabric sourcing committee that will help members purchase competitively priced raw materials from countries around the world.

'We also will encourage our smaller members who are interested in setting up plants offshore to ask for aid from those [members] who have experience in this area," added Granoff. "They will arrange plant tours and help with questions. And we will focus on exporting our products and ensuring a level playing field in foreign countries."

Lisa C. Rabon is editor in chief of Bobbin.

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