Talking fashion with Greg Hewitt, CEO of DHL Express U.S

Prior to Fashion Week earlier this fall in New York City, LM Group News Editor had a chance to talk with Greg Hewitt, CEO of DHL Express U.S, about his company’s involvement and role in Fashion Week from a logistics and supply chain perspective. An edited transcript of the conversation follows below.

LM: How do you approach Fashion Week from a logistics perspective, given the fast and frenetic pace the event always seems to be on?

Greg Hewitt: If you look back at our sponsorship and involvement in fashion week, it really ties into linking our brand to an important vertical segment in the market. When you think of fashion, you think of time critical, high-value and a certain level of sensitivity, because the designs are quite often one of a kind. There is that level of anxiety from the designer that they need to know they have a trusted partner to move that collection to [Fashion Week] on time. When we look at sponsorships, we look to align ourselves with organizations or events that tie into what we do best. In the last 50 years, we have been involved with fashion as a business, we have been helping, whether it has been designers or manufacturers, or retailers, move textiles, garments and fashion around the globe. And at the same time we have been involved in the supply chain just as long, so whether it is the movement of samples back and forth during the design process or sending the first prototype that comes off the line over for review, or whether when it’s the collection using the DHL Express air and ocean business moving the entire production line, once a retailer buys the product or designs that then move into store locations around the world. There is a good natural fit where we want the design community and the buyers there from the retail locations to associate the DHL brand with fashion and our capability to help them with their supply chain, whether it’s the physical movement of goods from a shipping standpoint, or the customs expertise locally in a number of countries that they might be sourcing materials to create their designs or even a case of VIP gifts or passes for the event, which we want to be associated with our brand. This helps to further extend our credibility in the fashion world, as well as growing and expanding these relationships through DHL Exported?

LM: Can you please explain the DHL Exported offering and how it works?

Hewitt: It’s a program that we worked on with IMG that focused on recognizing, helping and assisting up and coming designers. The idea behind it was to combine DHL’s logistics capabilities and access to global markets, with IMG’s marketing side to attract new buyers and show their goods. Our goal was to help them streamline their internal logistics processes and help the designers source the materials they would need from around the globe and to bring their creative designs to life. The idea is that designers from anywhere in the world are invited to submit an application to expand their business to one of four key retail markets. It has an export mentality, too, so they to bring forth a business case that shows their export development strategy, including the shipping and logistics assistance they would need, the marketing and public relations support they would need, as well as their social and digital platforms, including their desire around e-commerce portals to support sales for their winter collection. This way, a German designer, whose market has traditionally been Europe, looks at the New York market and can state his or her business is ready to go into a new market. And the application describes how the designer’s brand would transfer outside of Germany and into the U.S. market…and leverage our capability to grow the business in New York.   

LM: When people think of direct to consumer fashion sales, e-commerce often comes to mind. With e-commerce continuing to gain more and more traction, how does that change things from a logistics services perspective as things continue to change?

Hewitt: When I look at the evolution of online retail, in the early days the online community started with how do I distribute to my current customers that don’t want to come into a store anymore and want to buy online and it just started looking more local than global in terms of getting out of a city and state and, instead, across the U.S. And then the evolution becomes what if I want to buy goods in easy, well-known, and established trade partners like Canada, the UK, Australia, and even Mexico under NAFTA. These are countries that are known for trade agreements and it is generally easy to move goods to and back, and in a lot of ways are very comfortable making purchases with U.S. dollars and understand there be a currency adjustment when going online. Shipping to these areas is pretty well-known and established by integrators like DHL od through mail options. That is the early days. I think what we saw and are seeing now over the last few years is the true globalization of e-commerce, which is the idea, from a U.S.-centric standpoint, that people around the globe want the kind of access to the goods that are popular in the U.S. or are popular in American pop culture, or hot or popular in the fashion sense.

LM: Does that come with challenges?

Hewitt: Yes, with globalization people now have greater access to anything and everything. And what the consumer expects now is almost immediate gratification so what that has meant is you need to feed into your supply chain and get closest to market to actually deliver as soon as possible. We have seen that both globally and locally, and now people like Amazon are doing that within hours. For us, on the international side, we are providing that access through a big yellow machine to 220 countries and territories with what we believe to be the greatest speed in the industry, so it is allowing things to get around the world fast and to service that immediate gratification. 

LM: Looking at the fashion supply chain, what are some of the biggest changes you have seen over the years, in regards to the impact e-commerce has had?

Hewitt: In the earliest days, the role DHL Express would have played would have been working with the designer in sending samples back and forth and building the prototype, getting the single samples out to buyers to look at to create that initial buy to create that excitement. We also did that with the manufacturer to make sure that textiles, or what would go into the finished goods, got shipped into the manufacturing site. Once the collection was being made, at that point the bigger, broader collection was going out to the retailer for sale, and that was when our global forwarding sister company would come in and handled the movement of those goods to the traditional retailer. That included the evolvement and creation of the first paying garment transportation methodology, ending up in a retailer’s distribution center or going direct to some big store locations. As a traditional supply chain, that was how retail worked in fashion. With the emergence of e-commerce, those things are still going on but now what you start to see is instead of selling just into big retailers that are filling up warehouses with hanging garments and putting them into their stores, you are also seeing designers selling into boutiques in these markets or going into direct to consumer. And through DHL Express and DHL E-commerce we started moving high-value goods overseas and helping with the clearance, which was usually still being done in the local currency and usually using traditional services. Things are also expanding through changes in technology, which is providing changes like full visibility into the landed costs for duty and taxes and some developments around, for IT, looking at applications that would allow changes for secure payment and transaction. That all provides better visibility to the consumer for the full cost, and more goods are now moving that way, and what you start to see is more people are moving away from going to the big store and are buying things direct online as they have access to everything and understand the full costs and we are seeing a bit a bit of a shift on the global forwarding side as a little bit more is going from the manufacturing sites to direct to consumer or direct to smaller locations in which e-commerce is moving. And at that point really because of the costs of international shipping and the costs we have to maintain such a great infrastructure, it really was moving high-value goods at that point. Through things like the emergence of our e-commerce division whom leverages network moves with postal relationships around the globe, that division brings a more cost effective approach for lower-value and smaller, lighter weight products like fashion accessories.