Coats Thread leads discussion on digitising Sri Lanka’s apparel industry

The world’s largest industrial thread manufacturer and one of the Lankan apparel industry’s most trusted value chain partners, Coats Thread is a historic company that is over two centuries old. However, this has not stopped Coats from becoming one of the most technologically-advanced thread makers in the world, with a strong digital front and a strong vision that connects it to the future of fashion. One of the forerunners advocating and driving this steadfast vision for a digitally enhanced way of doing business in the company is Coats Chief Digital and Technology Officer Hizmy Hassen. The Coats Lanka Managing Director Douglas Aceiro—one of the most senior fashion value chain leaders in the country—invited Hassen to share his thoughts, ideas and methods in digitising the wearables industry with the Sri Lankan apparel industry. Hassen visited Sri Lanka and shared his insights and ideas with local apparel makers at the recently-concluded South Asian Apparel Leadership Forum 2017. Continuing this highly-significant discussion a month after the conference, Hassen and Aceiro gave the following insights to Daily FT recently:

Q: Mercedes-Benz Fashion Week Sri Lanka just ended, and Coats played a key role in it. Can you tell us why Coats partnered the event and how the company was involved in it?

Aceiro: Coats has been a partner of AOD and the platforms that it creates, from inception. We believe in talent development, the CR work done by AOD with artisans in our rural areas and the opportunity given to the key players in the Industry to display the great level of innovative designs in fashion during the runaway show.

The SAALF is also a fantastic forum to understand new trends and the challenges faced by the apparel industry. We continue to bring speakers from our senior leadership in order to provide insight and our global views to the local industry.

Q: Coats hosted a session at the South Asian Apparel Leadership Forum. Can you tell us a little about it?

Aceiro: Our Chief Digital and Technology Officer, Hizmy Hassen, provided great insights to our apparel industry leaders on how our organisation is yet again re-inventing itself in our journey moving from the Industrial to the Digital age. For over 250 years, Coats has been providing solutions to the apparel industry through innovation and now it is through focus on digitising our processes and customer experience.

Q: Coats is an active voice in the industry, about championing digital to make better business sense. Why does Coats value digitisation so much?

Hassen: Digitisation and technology are key enablers for us in two areas;

1. To deliver improvements in customer experience, particularly in transactions with customers.

2. The ability to make our internal collaboration and enterprise processes more efficient and effective.

It ultimately leads to an enhanced customer experience so we have invested resource and energy in digitising key processes. We’ve seen that translate into improved feedback from our customers in terms of our service levels which has also contributed to market share gain as we grow with our customers.

Q: How important do you think digitisation is to Lankan apparel makers, and why?

Hassen: Apparel manufacturers can certainly look to use digital as they look to retail brands for opportunity. Digital is fast becoming a predominant channel offering increasing marketing and commercial opportunity for manufacturers. They don’t need to look at investment in bricks and mortar, or physical distribution, as digital provides an opportunity for manufacturers to talk directly to and sell products to consumers. It is totally disrupting the traditional retail industry and distribution networks that we have come to understand.

Q: Can you give a recent example of how Coats has implemented digital to make better business sense?

Hassen: A recent example of Coats using digital to make better business sense, is improving our understanding of our customers and how they interact with us. Digital provides the opportunity to use data we’ve collected from customers on their product sampling, how they purchase from us and how they pay us. Data analytics enables us to understand exactly how and when they pay us so we are able to now tailor reminders very specifically to each customer based on their payment schedules, showing exactly what is outstanding and making it much more convenient for them to clear outstanding invoices.

Q: Coats is also a brand that has a retail front in Sri Lanka. What are your lessons in the use of digital for retail/sales in Sri Lanka?

Hassen: Retail is changing fast thanks to digital. An opportunity for Coats is to really expand the retail front, not using bricks and mortar, but using e-commerce and digital marketing communication. Some retailers, particularly in Asia, have used digital and mobile commerce to reach parts of the market that are otherwise difficult to reach. The challenge obviously is distribution. This is an area that has yet to mature in Sri Lanka and is largely B2B. Manufacturer to consumer is a space that has yet to develop but as it does e-commerce will become an opportunity for Coats.

Q: What about Coats’ involvement with developing artisan communities in the country?

Aceiro: AOD and Coats are partners in the fantastic handloom project that AOD founder, Linda Speldewinde, leads in supporting artisans and the rural communities in Sri Lanka. The project develops young and emerging talented designers, like Nithya, who in engaging with the communities will develop those areas bringing income through fashion that can be exported outside Sri Lanka. We are very proud to be a partner in this great initiative.

Q: What do you see as valuable insights to Lankan apparel makers on using the digital channels, as they set out to make retail brands in Sri Lanka?

Hassen: Digitisation will become a key differentiator for the Sri Lankan apparel industry. It’s a small exporting market when compared with the giants of the industry such as, China, Vietnam and Bangladesh. What it has done is focus on niche, high value products. To grow exports: from $ 5 billion to 8 billion seems to be the ambition of the industry. The biggest challenge will be labour and labour availability; so, digitisation will be an opportunity to enhance the output of the labour force. How would they do that? It is all about using data to more effectively identify and remove non-value added activities, and to understand where robotisation and automation will have the biggest impact in terms of output, lead time and delivery to enhance the industry’s customer value proposition. So digitisation would become not just an enabler, but a survival strategy in the apparel industry if it is to grow or continue to grow in the face of challenging labour availability.

Q: What’s next for Coats in the areas of fashion, design and innovation?

Aceiro: Our vision is to continue being the industry leader in providing solutions to our customers and brands which are built on product innovation, speed to market, improved productivity and supported by environmental sustainability and compliance.

We continue to expand our operations in the country as we are certain that the apparel industry in Sri Lanka will continue to lead the way in driving innovation, technology and ethics to sustaining the sector going forward.