Saturday, July 15, 2017

Five Real Reasons Retailers are Failing

The Retail Collapse is Really Just Suicide

While the business pundits and politicians blame the Internet and foreign competition. American retailers just keep loading the gun, spinning the cylinder and pulling the trigger. Sure, online sales are increasing, but they are only about 10% of consumer transactions.  The real problem is retailers and brands have crawled in a corner and shot themselves in the wallet.  Here are five of the bullets that are aimed at the retail and brand market.  They must stop spinning the cylinder and playing the bad odds or a major segment of the economy will collapse.

 Dependence on Malls for Store Traffic

Bullet one impacting store closings is dependence on common mall locations from anchors like Sears, J.C. Penney and Macy’s and specialty stores like; The Limited, Wet Seal, Bebe, BCBG, Guess, Crocs and many more. For years, malls brought shoppers together for a social experience. They were more than commerce centers they were social hubs for seeing friends, planning weekends and sharing experiences.  All interactions that now are more efficient and personal on social media.  Losing this segment of social traffic and the attached peer pressure to purchase left many retailers and brand outlets without the store traffic they depended on to support impulse purchases.  Most malls were not financially prepared to counter this loss of traffic so as the ecosystem collapsed the dependent stores became memories.

It is important to remember that all malls have not suffered this fate some are huge successes and support retailers that have adapted to this new environment.  These sustaining commerce centers fall into two categories.  The entertainment based mall is the most spectacular and although most of the largest are outside the U.S. there are still some impressive examples in the states.  These malls draw with live shows, amusements, rides, giant multi screen cinema complexes and restaurant level food venues.

Another successful model is outdoor shopping centers usually anchored by a superstore like Wal-Mart or chain box store like Home Depot or Lowes.  Non-competing specialty stores or food or service outlets, like fast food franchises and personal services, surround these anchors.
Anchor store based mall

 Nickelodeon Universe at entertainment based
Mall of America

Stocking by Season Not by Product Movement

One of the technical differences between superstores and traditional department and specialty stores is their buying decision structure.  Most super stores have enough buying leverage to create flexible purchase contracts, which allow them to stock and display product based on consumer purchases derived from their POS data.  Simply put, in superstores consumers drive the product availability.  Many of the retailers currently in trouble still use seasons to drive product stocking.  This is especially true of the apparel sector where stores buy in bulk thinking that lower volume pricing will insure profits. Six to twelve months before every season they spin the cylinder and pull the trigger based on the best possible forecast.  Every retailer believes that they will spin up a winner but there are too many risks loaded and sooner or later the inevitable happens. This outdated forecasting system sourcing leaves retailers with fashion losers, odd sizes and excess merchandise when the next seasonal shipment is on the way.  Discount and clearance sales blow away all the planned profits leaving limited cash to operate the store leading to self inflicted bankruptcy.

Modern POS stocking is an exercise in constant product resetting based on the velocity of consumer product purchase.  Restocking and repositioning are mapped by computer and tied to simple formulas like, “Gross Profit X Inventory turns” product indexes (GPxT=PI).  This index competes with other products in the same category for on-hand inventory, product display position and replenishment orders. This is why many of us have experienced going back to Costco and finding that the product we bought three weeks ago is no longer on the floor. This process creates much less risk of product “backfire” since actual sales drive the inventory not dangerous forecast roulette that blow away profits.

Many of the current and pending retail and brand closures have been caused by self inflicted clearance discounts caused by out dated stocking, antiquated POS systems and seasonal based buying.  Coordinating sales and manufacturing in real time is the path to saving jobs in both manufacturing and retailing.

Discounting Retail’s Omni-Channel Advantages

Omni-channel retailers have a huge selling advantage with consumers.  They can address the customer at every level of value gratification.  With some merchandising restructuring retailers can satisfy instant, delayed and deferred gratification much better than online only stores.
A Touch Screen endless aisle of touch it, feel it, try it choices for the consumer and a virtual inventory with no risk for the retailer and brand.  The consumer can choose fabric, color and print from thousands of virtual SKU's and pick-up in store or ship to home in three days.

First, retailers need to recognize today’s customer is no longer an impulse shopper manipulated by advertising or sales.  According to Forrester Research, over 83% of retail purchases are influenced by information gained online.  This data defines today’s customer not as a traditional shopper but a dedicated searcher.  Retailers without an informative presence on the inter-net cannot compete to satisfy modern consumers.  Web presence only gets retailers the opportunity to compete the real advantage is the physical customer interface.  Touch it, feel it, try it, gives the retail experience depth and value.  The instant gratification of immediate possession only happens at retail.  The delayed gratification of customization and later pickup or home delivery is the most profit making change available to retailers today.  It can be as simple as the custom paint counter at the home center or a custom printed holiday card or even custom dyed, printed and fitted clothing sent to your home or picked up at the store.  Deferred gratification is satisfied, by allowing the customer to create the perfect fit by creating their body avatar at the store and then building a wardrobe around their “digital body” at home.  This technology available today is seen every day on HGTV by custom home decorators to visualize different coverings on furniture in the customer’s home.  For the retailer, selling from a virtual inventory with no stocking cost or risk, retail price and purchase driven production insures a profit in every sale.

Ignoring New Production Coloring Technologies

Removing this bullet is both the most critical to profits and the most difficult to install.  For hundreds if not thousands of years color has been applied to fabric by essentially the same process. First you mix the color of choice, then you apply it to the fabric and then fix the color through heat, steam or drying.  Next, operators prepare for the next job by must carefully cleaning the equipment and then mixing a batch of the next color.  If your printing each color must be separated, mixed to match, burned to a screen, registered to each other and after printing carefully cleaned for the next run.  All of these actions cost the dye and print house time and lost income.  In the end that cost is passed on in the form of sir-charges and minimums preventing the brand or retailer from quick replenishment or custom orders based on actual sales.  This process of individual premixed colors is the single greatest obsolete manufacturing technology causing product risk and excess labor costs.  Separating, printing and/or sewing in dyed or printed colors cost labor time and over production and eventually extended delivery time and inventory risk.
Current screen printing requires each color to be separated, mixed to match, burned to a screen, registered to each other and after printing carefully cleaned for the next run.  Screen print is currently over 90% of all printed textile and apparel production.  This mass production technology cripples profits in the garment and textile markets.
The irony is that all this time the technology that solves this manufacturing dilemma has been sitting on the desk at your office.  Ever wonder how that desktop printer produces all those colorful charts, slides and pictures, instantly without mixing inks, making screens and time consuming cleanup between each print?  This coloring technology is call “process color” and it has been producing the brilliant colored point-of-purchase and fabric based display art at shows, conferences and stores for years.  The technology and equipment is available today to create the same “change-on-the-fly” pollution free colors and prints on apparel and textiles.  The industry continues to resist while they hope that better data, design and PLM software will save them from over production and the inevitable clearance sale bullet.
Digital process color printing changes on the fly with little or no downtime and produces to match sales without dangerous pollution or separation and screen costs.

Obsolete Merchandising and Sales Methods

 Today many stores operate on a “buyer knows best” merchandising strategy where the brand/store buyer determines what product will be offered to the customer.  This strategy assumes the stores or brands customers all have similar taste and style.  This provider centric strategy is demanded by factors like mass production, long transportation and distribution lead times and dedicated floor space that must be filled.
Making the fundamental change to a customer centric merchandising strategy has baffled most of the retail chains because it requires changing manufacturing, sourcing, real time POS, customer interface and online design.  The customer centric store operates with at least these key customer participation features:
  •   Purchase Activated Manufacturing either while-you-wait in the store (Direct-to-Garment) or at touch screen kiosk for unlimited color choice and at home delivery.
  •   Optional personal take home avatar for individual fitting at home.
  •   Endless aisle touchscreen access to virtual inventory.
  •   Sales associate guided product customization.
  •  Access to personal closet of previous purchases and product virtual lay-away.
  • Automatic POS linked production replenishing actual sales.
All these technologies are available today but retailers shun their use for a myriad of reasons from “wait and see” to “there’s no hope” while continued inaction just spins the cylinder and…

Wednesday, June 21, 2017

Principle 5: Consumer/Buyer Participation Determines Product Value

Consumer Value Creates Sustainable Profits
Consumer/Buyer Participation Determines Product Value Direct integration with the consumer/buyer sales offer creates value through participation in product selection and individualization.  Consumers can individualize product and buyers can create/test exclusive and private label apparel without inventory risk.

Product Value

Product value can have a number of different connotations, for instance, product value to a consumer could refer to price, fit, durability, peer aceptance or all of these and more.  Product value to a retailer or a brand often is more related to profits or corporate identity and to a manufacturer the term often refers to profit through ease of production and productivity.  If value relates to all these different propositions then how does consumer/buyer participation impact all these diverse definitions at each level of the supply path. 

Consumer Value

For the consumer the ability to select and customize a product represents the highest level of personal relevance.  That personal attachment translates into a willingness to pay more for the product because the personal value is based on more than price. Even more important, the participation of the consumer indicates exactly what he or she wants to buy and therefore the probability of a final transaction becomes much more reliable.  This ability to shape the product replaces much of the desire to shape the deal in the mind of the consumer creating a much higher attachment to the content of the product rather than just the price.  This identification with the personalized product has both a positive value in the desire to complete the transaction and a negative impact if the product is not readily available.  This need for instant gratification is the weakness of the online sales experience and the strength of the retail experience however, online merchants are way ahead in mitigating this gratification delay by providing instant downloading of products like aps, books and financial services and heavy investment in developing technology to provide quicker physical product delivery.  The ever present downside for both online and retail is; that in order to satisfy this important consumer value proposition the seller must hold greater volumes of inventory in anticipation of the consumer’s desired product features.  The only practical solution to this conundrum is to invest in Purchase Activated Manufacturing (PAM) with it’s integrated virtual inventory.  A virtual inventory is an endless aisle of customizable product held in the digital state and converted to a custom physical product on demand in a Purchase Activated Manufacturing facility.  This facility can be the paint counter at ACE or a direct-to-garment digital printer in a retail store or a production line in the corner of the regional distribution center.

Retailer Value

For the retailer and indirectly the brand the value of consumer participation is simply sustainable profits.  Consumer participation creates higher sell-through of product, which directly raises profits.  Selling higher percentage of on-hand inventory helps produce higher profits for the entire supply chain because, it reduces unsold inventory the single greatest profit killer in retailing.
Based on 6000 units, Landed Duty Paid cost $18, Retail price $45, Sell through and markdowns based on current U.S. women's retail apparel averages.
Retailers and brands need to remember that the funds they leveraged and paid  for unsold product is by far the most expensive funds they risk whether the funds are borrowed or advanced, selling one to pay for three is an unsustainable proposition.  When sell through averages only 28.5% of on-hand inventory (according to Accelerated Analytics, Inc. POS data), discounts to clear inventory wreck profits.  The search for lower labor prices and the adoption of time-to-market design software create more inventory and only make this problem more expensive and more of a death sentence.  

Summary: Participation = Value = Profits

Focusing product decisions on the consumer with active cunsumer participation allows a retailer, e-tailer or brand to work from realtime trend data instead of forecasts that hope to predict trends a year in advance.  Using real time sales data and demand replenisment, retailers can tweak product and designers can use today’s 3D design platforms to feed a virtual inventory and PAM production with time-to-purchase restocking of 10 days or less.  This strategy reduces unsold product losses and creates customer loyalty while insuring sustainable profits.

The New Era of Searchers vs. Shoppers

What is the difference between today’s consumer and buyer and the consumers and buyers of the past.  The quick answer, assumed by the pundits and today’s failing retailers, is that every consumer and B2B buyer is shopping on line.  Yet by far the bulk of apparel actual sales still occur in a retail store.  The origin of this misconception/excuse is rooted in two key facts about the consumer purchasing experience.  First, according to Forrester Research, Inc. well over half of the retail  apparel purchases are influenced by online information and second the “social” traffic that used to be automatic at the mall has been replaced by social interactions online.  In short visiting with your friends is a lot easier online in a virtual world of social media than the real world of crusing the mall.

Based on this data and the reality of hundreds of specialty apparel retailers circling the drain, it’s time to redefine the apparel consumer.  We are no longer dealing with a shopper but rather today’s consumer is a searcher.  The ineffecient “mall crawl” has been replace by meta data and cookies the help explore the vast inventory of the internet.  These searchers are no longer limited by location or local culture they can explore product from all over the world while floating down an “amazonian” river or trekking through “googleland”.

Today’s retail store buyer has an even more complex reencarnation.  With the advent of the UPC code and more recently the RFID tag, stores are capable of mapping their floorspace and tracking product purchases in real time.  Today’s buyer can get daily reports from store operations and know product successes failures in as they happen.  Even though, buyers may get the data to know what’s happening, there is little they can do except reducing price to drive sales.  Reducing prices drives “deal” shopping and ultimatley kills profits needed for store operations leading to layoffs and closings.  For buyers and merchandisers the dream state is, “never out of stock, never over stock”.  Getting to that state requires unique product and flexable contracts that are tied to actual sales.  The ability to create custom product with supply fexibility and weekly varible shipping that can support retail searchers and safe product availability sustaining product value and profits.

What’s Next?

How valuable would your smartphone be if you couldn’t choose the apps you wanted?  Would you want paint that wasn’t exactly the color you chose?  What if you could always be sure that the apparel look you wanted was always a perfect fit for your body!

Those three questions represent the three levels of apparel buying consumer participation online or on retail store kiosk.

Level One Virtual Inventory Catalog

Level one is the VI Catalog Level.  Just like the app catalog on your smart phone provides almost unlimited choice of product, an online catalog of apparel choices allows the searching consumer to find their look without hours of shopping.  Pictures of finished apparel usually shown on models and often used to offer unsold or discounted merchandise out of season characterize current catalog page layouts. Catalog level online is a digital version of the old mail order catalog with an online search and purchase twist. These product displays are the easiest to design and update.  This picture or object based format is the most compatible with multiplatform and omni-channel applications.  Catalog page layouts can get highly sophisticated with 3D/360° views, product comparison and magnification flash screens.

Catalog layouts represent product already in inventory and therefore depend on price and features selected by the seller.  Because the inventory is already purchased and in stock the risk of profit loss from further clearance discounts and unsold product is still very real.  This application of digital display technology can create a discount platform and if properly synchronized with social media can drive additional sales volume.  The down side is that since the product represents the seller’s vision to the consumer/buyer the price often becomes the key value criteria.  This price-based value can force discounting of on hand inventory to increase sell-through and in turn drive down profits.

Level One Objectives:

·      Develop a template for the search experience and test consumer use and reaction in store and online.
·      Build a direct HD link to 3D/360° between your design software and the catalog template.
·      Build a direct link to 2D print and piece nests between your design software and the Virtual Inventory server.
·      Build, sample and produce your products in process color.

Level Two Mass Customization

Level Two adds a consumer/buyer Mass Customization features to the catalog.  This user driven configurator software allows the consumer/buyer to change colors and/or prints as well as adding certain embellishments like lettering, edge treatments and embroidery. Although these additions are limited to digitally manufactured choices already prepared and tested they still represent significant customization choices to the consumer/buyer.  The configurator level product offering level can usually be identified by a menu of user driven choices shown in a side panel of the display screen.  This menu can be as simple as “Choose Your Color” or a complex set of colors, fonts and objects.

Click the link below to experience EMBODEE's "state-of-the-art" online product customizing.

Many companies at all levels of the sourcing chain (retail, brand and manufacturing) resist configurator level offerings because their enterprise management software (ERP, PLM, POS etc.) is not agile enough to handle this multi faceted data stream.  Manufacturers are also faced with creating agility in technologies previously dedicated to the efficiency of common product volume.  Because of this resistance many online displays that look like configurators are actually level one search plugins that help the consumer/buyer navigate a large on hand inventory. While this solution provides more choices it may not allow for future upgrades to additional merchandising opportunities.

Level Two Objectives:

·      Find a configurator that places objects in a format compatible with catalog and printer outputs.
·      Produce a HD 3D/360° rendering of the customized garment.
·      Build a search and retrieval system for consumer/buyer designed SKU’s.
·      Create consumer specific personal collections for individuals to reorder or redecorate.

Level Three Contour Fitting

Level three; consumer participation is based on the most important historical value in apparel sales, the individual ultimate value of personal fit.  The ability to tailor clothing to a customer’s body shape has always represented the ultimate value in a personal wardrobe.  The digital capability of creating and grading a garment in real time to the body shape of an individual consumer is the key to insuring sale of apparel at full profit.  A number of technologies in scanning, measurement algorithms and 3D photographic interpretation have been able to produce holographic visually functional models of consumers.  However, creating an accurate 3D measurable and drape ready hologram is only one third of the solution.  The second piece of the solution is a 3D/360° display version of individually fitted apparel that is of sufficient resolution and detail to place in the personal catalog of the customer with the ability to rotate and magnify as well as customize. The last third of the solution is the ability to produce a 2D production pattern, and nested RIP compatible color print file including printable placement of embellishments and accurate working sewing instructions. 
 This early Microsoft Retail scenario demonstrates the ability to capture shapes and visualize products in an Omni-channel experience.

Level Three Objectives:

·      Create individual fitted catalogs for “loyalty premium” consumers.
·      Gather fitting data for specialty micro-sizing of new products.
·      Identify a test market base for future product releases and embellishment choices.
After extensive testing our team has concluded that two companies are at least two-thirds of the way to a full solution but as of mid 2017 no seamless complete software is on the market.  Unfortunately although the current software allows PAM demand manufacturing and mass customization it does not yet support seamless, integrated Level Three, Fitted Purchase Activated Manufacturing.

There is however current technology available that creates the ultimate level of consumer satisfaction and engagement and will support a level of productivity and profit that sustains jobs and domestic manufacturing in this important segment of our economy.

The misguided reluctance and delayed action of the current apparel industry to transition from “supply and demand” to “demand and supply” and to directly link the individual consumer to the final product is the primary cause of today's collapse in apparel and retail jobs.

Wednesday, May 17, 2017

A Timeline to the Loss of Manufacturing and the Crash of Specialty Apparel Retail


Events all the way back to the early 1900's have shaped our apparel and textile import imbalance and manufacturing loss.  Here are some of the defining milestones in a continuing timeline.


1911 Unions and Progressive Sewing Begins

The deadly fire at the Triangle Shirtwaist factory killing 146 piecework sewing workers caused a public outcry and new safety and work regulations.  Quietly the industry looked for new manufacturing processes to replace the individual seamstress with a less multi-skilled employee that allowed for more personnel turnover.  This allowed factories to work around new work regulations instituted in the 1920’s

1916 The Mass Production Assembly Line is Perfected

In 1916, Henry Ford was determined to build a simple, reliable and affordable car; a car the average American worker could afford. Out of this determination came the Model T (Identical and Black Only!) and the assembly line - two innovations that revolutionized American society and molded the world we live in today.

Profitable Mass Production based on volume efficiency was born and the apparel manufacturing industry began to adopt the process.

1920’s & 30’s Ready-to-Wear Builds Factories & Brands

Retailers feature ready-to-wear apparel and fashion magazines promote production apparel based on illustrated garment patterns.  The shift from tailored sewing to production sewing accelerates allowing more assembly line mass production.  The key element of mass production, uniformity of product, is still hampering full adoption.

July 1939 Standard Sizing Promotes Mass Manufacturing

The Roosevelt administration creates a project to measure tens of thousands of American women from 1939 to 1940.  This project is designed to formulate standard sizing for the industry and promote ready-to-wear and U.S. manufacturing.  The plan is a success and mass manufacturing and the assembly line dominate apparel production.  Jobs increase even though wages only slowly increase, and by 1965 over 95% of our clothing was made in the U.S.

December 2, 1970 Regulations Choke Textile Manufacturing

The Environmental Protection Agency (EPA) is formed to consolidated the regulations and laws designed to protect the environment.  Water regulations and the Clean Water Acts of the early 70’s quickly targeted the textile industry as one of historically the largest polluters.  These acts effectively caused US textile mills to leave the US starting in 1970 with the formation of the Environmental Protection Act (EPA). They went to countries with huge pools of cheap labor and no restrictions on water or air pollution. 
Suddenly the US apparel manufacturers were faced with long raw material supply lines and large minimum orders of fabric, colors and designs. (Remember Henry Ford: "You can have any color you want as long as it is BLACK'). Another huge layer of overhead costs that were rarely included in garment cost sheets.

January 1974 MFA Separates Textile and Apparel

In an attempt to mitigate the impact of overseas fabric (textile) production the U.S. and Europe agreed to the Multi-Fiber Arrangement (MFA).  Under the MFA, the United States and the European Union restricted imports from developing countries in an effort to protect their own domestic industries.
The MFA was active from 1974 till 2004. The agreement imposed quotas on the amount that developing countries could export in the form of yarn, fabric and clothing to developed countries.
Key to this arrangement was that it did not include certain countries. Examples like Bangladesh and China, which increased exports to the U.S. and EU dramatically during the term of the MFA.

8:01 AM June 26, 1974 UPC’s Change Everything and Empower Giant Retailers

In a seemingly unrelated event at a Marsh Supermarket in Troy, Ohio, a 10-pack (50 sticks) of Wrigley's Juicy Fruit chewing gum became the first UPC marked item ever scanned at a retail checkout.  This is the development that would eventually link real-time “point-of-sale” (POS) data with all stocking, display, promotion, planning, distribution and manufacturing caused a massive restructuring of retailing world wide.  This ability to know exactly what merchandise sold under what conditions (promotion, clearance, positioning, etc.) at what price and eventually to what customer, changed the playing field.  Grocery and general merchandise stores were soon adopting complex software that converted POS data to maps of product velocity, inventory and positioning called plan-o-grams.  This created the opportunity to manage larger and larger stores based on product movement and gross profit or “shelf index”.  These stores evolved into giant locations known today by the generic, “box stores”.  Stores like Home Depot , Wal-Mart, Kroger and others including specialty discount stores like T J Max, HomeGoods and other flourish because they adhere to strict stocking rules driven by POS data.  Many apparel stores still rely on trend analysis and forecasting to stock their sales inventory.  Since these retailers still deal with long production lead times they operate at high risk. 

Early 1980’s Textile Leads Apparel Overseas and Enables Box Stores to Make Volume Buys

The cumulative effect of textile plants leaving the country and long and longer product lead times started to force the loss of apparel manufacturing throughout the U.S. To help resolve this logistical quandary, US apparel factories followed textile factories overseas, hoping the cheaper labor would help defray the new lead-time and transportation costs.  According to the Dictionary of American History published by the Gale Group, by 1980 the country had lost over 25% of the apparel manufacturing jobs.
Larger retailers, aka the box stores, began to grow and exert their buying leverage in the countries not included in the Free Trade Agreement FTA/MFA trade pact. This buying leverage allowed the POS based retailers to tie their inventory much closed to actual sales and the impact of their volume allowed them to dictate lower costs and create consumer value based on price.
Source: Office of Textiles and Apparel, U.S. Department of Commerce

1992 DAMA Helps Send the Last Apparel Jobs Overseas

In a well meaning attempt to save manufacturing jobs an a disappearing major industrial segment the federal government funded $222 million to created the Demand Activated Manufacturing Architecture (DAMA) Project from 1993 to 1997.
According to the official description:
The DAMA project team consisted of around 30 companies, four Department of Energy (DOE) national laboratories, one DOE production facility, several universities, and one Cooperative Research and Development Agreement(CRADA) spread across the entire country.
The stated goal was:
The industry has determined that collaborative business practices are necessary to provide a significant reduction in time and cost to product pipelines. Potential savings in the U.S. Integrated Textile Complex (ITC) are estimated at $45Billion per year with a realistically achievable 50% reduction in time. DOE has determined that there was a need to ensure a reliable nuclear deterrent with declining resources by applying information technologies and shared business practices to product realization. The DOE goal was to reduce product realization cycle time by 50%, which will result in significant cost savings, while achieving ten times fewer defects.

Source U.S. Bureau of Labor Statistics
If successful the project would have provided a continuous integrated path from sales, to sourcing, to manufacturing, to inventory.  This integrated demand path would reduce risk and provide detailed inventory control and greater profits, ultimately moving production closer to sales and reversing the job loss.  Great idea, poor execution, rather than focus on the growing technology of apparel production, the project was seduced by the 1990’s promise of the rapidly growing internet technology of information exchange.
The project spent vast amounts of money improving the ordering and communications and control of apparel sourcing, while supporting the concept of mass manufacturing.  The result was a technology leap in the ability to manage sourcing and production management information.  This information did not change the process of textile manufacturing, fabric coloring or apparel manufacturing, however, it did provide a better window on labor costs and quantify the savings of overseas manufacturing.  Thus with greater visibility and control thanks to taxpayer financed internet software 70% more apparel jobs moved overseas.

2005 After the MFA the WTO is No Solution

This was the end of the MFA’s term (1974-2004)  and the U.S. tried once more to save the apparel trade by brining the textile and apparel trade under the auspices of the World Trade Organization (WTO).
Wikipedia’s history of the transition taken from a number of references:

At the General Agreement on Tariffs and Trade (GATT) Uruguay Round, it was decided to bring the textile trade under the jurisdiction of the World Trade Organization. The Agreement on Textiles and Clothing provided for the gradual dismantling of the quotas that existed under the MFA. This process was completed on 1 January 2005. However, large tariffs remain in place on many textile products.
During early 2005, textile and clothing exports from China to the West grew by 100% or more in many items, leading the US and EU to cite China's WTO accession agreement allowing them to restrict the rate of growth to 7.5% per year until 2008. In June, China agreed with the EU to limit the rate to 10% for 3 years. No such agreement was reached with the US, which imposed its own import growth quotas of 7.5% instead.
The simple average U.S. tariff on all goods in 2012 was 4.7 percent (calculated as the average tariff applied to 10,511 tariff lines). However, the applied tariff rate for U.S. imports in 2012 (calculated as duties paid divided by customs value) was 1.3 percent, which confirms that there is a higher incidence of importation of products subject to low- or zero-tariffs (which, in turn, confirms the protectionist, anti-consumer nature of tariffs). For apparel products (catalogued in Harmonized Tariff Schedule Chapters 61 and 62), the average applied rate of duty was 13.1 percent in 2012, with importers paying as much as 32 percent on some articles of clothing.

The question remains if the apparel trade is protected by a duty of up to 32% and the added costs of transportation from overseas why can’t U.S. factories recover and why are apparel retailers failing.

2009 Online Technology Cuts Into Retail Sales

Forrester Research commissioned by Google
Initially the online competition to brick and mortar retail was focused on clearance of excess inventory through secondary sales and the sale of custom printed uniforms and athletic wear.  Consumers soon became more sophisticated and the conversion from mall shopper to online searcher changed buying habits.
Wandering the mall for the “right look” was easier on social media and finding bargains and the right fit in stock was much more efficient on store internet sites.  The chart shows the increasing influence of online searching and directional shopping.  It also shows that over 80% of purchases still occurs at a physical location where look, feel and fit are confirmed. 
The impact of social media has had much more to do with the demise in mall traffic than a reduction in retail sales.  Lists of affected and failing retailers and anchors are directly related to mall locations and the demise in social traffic.  Companies and pundits who blame internet for these failures are overlooking the social role of malls that has been replaced online.

2017 The Retail Segment Follows the Manufacturing Collapse

Thousands of retail stores, mall anchors and  apparel specialty stores are closing in 2017.  There are lots of individual reasons but the common link is inventory overload caused by lack of store traffic and cost based volume purchasing driven by forecasting and mass manufacturing technology.  The result is debilitating discounts and lack of product differentiation.  Massive inventories at brand level and distribution sites caused by cost based volume buying leave retailers and brands with little alternatives.
According to Advanced Analytics, a major supplier of POS data, product sales are less than 25% of inventory in the first 8 weeks of a garment’s retail sales and still less than 30% after 13 weeks.  These sell-through levels cannot support retail apparel sales and will soon collapse brands that also search for cost savings through volume buying.

2017 Enter The New Player Purchase Based Demand Manufacturing

Demand printed using no water, no minimums, direct from a virtual inventory...

Direct-to-garment, digital sublimation, Active Tunnel Infusion and other coloring and dye technologies that don’t need water and polluting chemicals are now operating in small factories all over the U.S.  These purchase activated factories understand the value of B2B and direct to consumer demand based inventories.  They will soon evolve with design and sewing services and use their high profit low risk virtual inventory production to build a new future of domestic manufacturing.  Unfortunately the current large brands and retailers have little understanding or regard for this innovative wave of entrepreneurs.  This institutional resistance to change will likely result in many more iconic retail and brand failures before apparel manufacturing fully returns.  Since the consumers a here and their demand ultimately drives purchase activated manufacturing the future is bright.