Transcript - Andrew Rotondi

Season 4, Episode 2

Conversation with Andrew Rotondi, COO/CIO, Dynamic Worldwide

Joshua Williams: Retail Revolution, a unique podcast that features in depth conversations with guest experts in omni-channel retailing with myriad perspectives, technology, consumer engagement, data analytics, merchandising, and more. We pay special attention to current sociopolitical issues and challenges and their implications on fashion retail, as well as opportunities to innovate and rethink retail's future.

Visit RetailRevolutionPodcast.com for more information, including full transcripts and follow us on Instagram and LinkedIn @retailrevolutionpodcast, Retail Revolution is produced by Joshua Williams and hosted by Christopher Lacy. Both are assistant professors in the Fashion Management graduate program at Parsons School of Design.

Christopher Lacy: He is a corporate leader with over 40 years experience in developing and deploying multi-client distribution and logistics systems for fashion and consumer product vendors, retailers, and e-tailers in North America and Asia.

Currently, Andrew serves as chief operations and information officer for Dynamic Worldwide, where he is credited with building both Dynamic's 3PL distribution business and the IT systems which support Dynamic's supply chain. Dynamic Worldwide services over 300 fashion and consumer product wholesalers and retailers, moving in excess of $50 billion at retail.

Andrew is a true retail revolutionary. Today, we will explore his thoughts on the importance of supply chain for all fashion professionals, the evolution of technology and the growing importance of sustainability implementation. All of this and more, on this episode of Retail Revolution with Christopher Lacy.

Andrew. Thank you so much for joining us today. How are you?

Andrew Rotondi: I'm great given our crazy world that we live in. Thank you for having me on this podcast.

Christopher Lacy: Thank you. Thank you. And to your point, it is a crazy world. So, the fact that you were able to make time is amazing at this point. So, I want to jump right in and I want our listeners to hear briefly a bit about your career and what you do.

Andrew Rotondi: So, I started out many, many, many years ago.  Got out of college with an accounting degree from The City University of New York and was very fortunate that my first jobs were related to installing systems, primarily accounting systems and some distribution systems. And it evolved into working with, at least back then, AI companies. And then eventually moving into the company that I'm with today, which is Dynamic Worldwide, a family business that started out in the heart of New York city's garment center for both manufacturing and transporting garments. So, I really was indoctrinated into the world of fashion, primarily through my experience at Dynamic Worldwide.

And we've evolved into a fairly sophisticated resource for both retailers and the vendors that service those retailers, and e-tailers, and had a very successful career. And, we'll be around for a while.

Christopher Lacy: Andrew, that's amazing cause when we think about your career and look at it, you have seen the evolution of logistics and retail and wholesale.

 So, you could speak a lot on different strategies that have been put in place. And one that I want to talk to you about is MRO supply chain, the strategy behind maintenance, repair, and operation and how it really works within the production process.

And I'd love for you to talk to our listeners and really kind of go into what would define a good MRO supply chain strategy and considering, you know, like we just talked about the pandemic, why would that be important right now?

Andrew Rotondi: Given what we've seen this past I guess 12 months with the advent of this, tragic pandemic, if your supply chain wasn't flexible and didn't have alternative resources to be able to either hold or move product, in many cases given the decrease in business, especially as it relates to fashion you're not around or your business has changed dramatically.

And so, the ability to, react to these changes, which many fashion companies, the good ones do have the ability to react, and the retailers that are able to react, are the ones that are still around. And when I say react , in order to be able to make the changes that you need to make, besides having good executive management or top executive management, you have to have the flexibility of systems and the flexibility of the quote unquote "boots on the ground" that will enable you to make those decisions in a very real time way to survive during this pandemic.

Christopher Lacy: You know, when you talk about flexibility, it makes me also think, there's flexibility and then there's speed. And we are in a situation where there are those Amazons of the world and startups, and those companies that really are agile.

And sometimes they're agile simply because they're a smaller size. So, they're able to be agile simply due to the flow of cash that they have to put systems in place. If you were to think about, you know, you talked about the flexibility, but speed right now. How are supply chain processes evolving to ensure, there's the shortest time from point A to point B?

Andrew Rotondi: Well, in the start of, I guess your comment or question, you mentioned the Amazon's of the world. Let me be clear. There's only one Amazon. Okay.  There's Amazon and there's everybody else. And they are an amazing example of flexibility. and their flexibility in their supply chain has evolved through being extremely well-capitalized and focusing on product that people want. So those companies that are focused on product that people need are obviously key. The ability to have , whether it be a supply chain to be able to move products from one end of the country to the other, or to redirect product when supply chains which you do not have control over reach a threshold of capacity,  those companies that can basically redirect and still have the visibility and not lose the time for speed to market are the companies that are successful. And that doesn't happen by magic. It happens by planning. It happens by experience. Certainly, you have to have the capital to be able to make those moves.  And it also happens because you as either vendor or retailer have selected the right partners to be able to achieve during these crisis situations.

Christopher Lacy: When we talk about partnership and there are third party logistics companies that implement different types of technologies, if you're a fashion retailer today and, you're a designer coming out of school, you want to start your own brand. You know, things are going well. You've got now the capital to start your own brand. What are some major things that need to be considered to ensure their supply chain is appropriate for the scale of their business?

Andrew Rotondi: Certain ways it may be easier to start up for some of these entry level , either designers or fashion companies , because the web has provided a tremendous opportunity for sales, especially given the pandemic with the direct to consumer options.  It's opened up doors that would not have been open five years ago.  But having said that you're only going to reach a certain level. And that level is going to plateau at some point. And you got evolve into once this pandemic is over into, whether it be brick and mortar, or whether it be a wholesale business.

And when you start scaling up into that kind of volume to really be a high velocity provider or supplier, that's a whole 'nother animal. It's a whole 'nother dimension of support a whole other dimension of capital required and sophistication that's needed.

And those entities really need to select their partners carefully because it's not an easy task.  And, you know, we've spent literally tens of millions of dollars in reinvesting in our supply chains to provide the resources to our clients. And it's not easy and it changes every day and it requires not only experience, but it requires a level of sophistication  to be able to have these systems in place that will allow you to adapt to changes in the type of business and the type of season that you have to ship.

Christopher Lacy: Do you think that the pandemic, and we've seen this happen and I've talked to many people in the fashion industry and I experienced it as well, it accelerated a lot of issues that needed to be taken care of that probably would have happened, five or six years down the line. If you were to look at it from the logistics perspective of a retail business, a wholesale business, and we know that the supply chain was disrupted, but were there some accelerators that occurred from this that you can look at and go, you know, this actually helped us in this area, or have we not kind of seen that happen yet?

Andrew Rotondi: Well, I mean, we we've clearly seen a number of bankruptcies. We've had a number of clients, some very large clients that are history. They were not doing great before the pandemic, and that was just the nail in the coffin. You know, it's public knowledge, you have a BonTon that went out, Stage that went out, Dress Barn that went out, you have many clients, many retailers, and some of them had a substantial e-commerce business that couldn't make it.

So, there's definitely was a need, I guess, of shaking out those players that maybe weren't going to be around going forward. On the plus side, there were opportunities for other players to pick up that slack. And, we feel that in our business, as long as we continue with our investments in the technology of supply chain and investments in the visibility and providing visibility and digitalization of the data for our customers that's going to basically separate us.

And, you know, on the competitive side, we've seen our competitors, a number of them, exit certain pieces of the business or certain segments of the business, I should say, that will eventually provide opportunities for us over the long haul. And we are optimistic once this vaccine is fully implemented here in the US and abroad that there will be some significant opportunities as the economy tends to bounce, the economy will bounce back.

Because quite honestly, there's a tremendous amount of capital that's been deployed by our government in the forms of loans and such, and although a tremendous number of people are hurting hopefully with the additional stimulus that's been offered over the next couple of months and hopefully more to come we do feel that there will be some significant opportunities. And on a personal level, I mean, people are dying to get out. And, fashion and food and music and the melding of our socialization will provide tremendous opportunities for those brands and fashion designers and retailers that have a stake in it to, I believe, capitalize on it. We just have to hang in there.

Christopher Lacy: Well, you said something in the beginning of your response that I want to go back to.

And it revolves around data and I'm interested to hear from you,  what is it that wholesale sellers in this industry, what's the new data that they want to hear for you? That they're like, we need to know this now and they probably didn't really care about that information before. Or what is something that you're having to kind of get out there to them so that they make better decisions, that's new for you.

Andrew Rotondi: You know, Amazon is setting the gold standard for not only speed of shipping and also reduced costs of shipping, but also in the granularity of the information that's being, not only provided to all of us as consumers, but also in their review of what you're purchasing so that they can recommend additional products.

So, we've all heard the term big data, and that's obviously related to that. So, with our smaller vendors and many of whom don't ship through Amazon, that we do provide the fulfillment for , they're deploying the same type of systems, albeit on a smaller level and are looking to really customize their offerings to consumers and focus on creating, quite honestly, less product, but product that's more focused to specific consumer markets that can maintain their margins and increase the consumer experience. And those companies, from both an e-tailer and a retailer standpoint that are successful in that , will be the ones to evolve and to do well.

And, on some of the higher end product, we've seen an increase in the type of packaging to do maybe some more customized packaging, more promotions. And also there's been a much greater focus on delivery because of the Amazon standard. And instead of shipping something and arriving in five days or three days or two days or the next day. And also in trying to reduce the amount of returns that are coming back, which relates to knowing who your customer is, knowing what their fit is. And that will reduce the number of returns. I could remember when I was in the AI world over 35 years ago we had looked at a product that the investors that were backing the company that I was working for,  were looking at a body scan application. And that was almost 40 years ago. And to date, it's still not perfected yet from what I've seen. There are a number of really good initiatives out there, but that's a big deal for fashion, especially given the customization of different product now where you have stores like Lululemon are doing onsite tailoring. I have a friend who has a shirt company here in New York that basically you go in, you get one fitting and they don't have a digitized yet, but you have custom shirts for the price of shirts that you would normally buy.

Matter of fact, I'm wearing one now. so we see those trends certainly increasing. And it's all because of technology because of the use of data, including big data.

Christopher Lacy: When we talk about the use of that technology and you look at the logistics and, ship time and speed, are are more companies making, starting to make decisions where they, you know, I need to figure out how to not have something shipped from overseas. We've really got to figure out how to localize this process? Because to your point, you know, you're talking about things like customization. I remember, when I was doing custom, made to measure,  I was telling clients, it's going to be about six weeks. It's a six to eight week turnaround. If somebody were to tell you six to eight weeks turn around right now, I mean, that's, there "what? " And that's even, almost, even in the furniture industry now saying to someone, that it would take eight weeks for them to get something. So, is that going to kind of make the shift to where people are rethinking where their distribution centers are and warehouses are and how to make those things more local?

Andrew Rotondi: It's a much more complicated, to some extent yes. But to some extent no .

Christopher Lacy: Ok.

Andrew Rotondi: It's much more complicated than that because the cost of distributing your inventory to various locations is not easy. Number one, it, provides a whole infrastructure to be able to provide that.  Number two it's costly. You know, if you have product that's being made in Asia and you want to ship it out of Florida because you want it to be on the East coast,  unless you have a significant resource to boat it there or fly it there  it's time. And quite honestly, with the pandemic, there have been less sailings because of the pandemic, just with boats and the cost of airlines have had so many less flights. So it, affects that.  There's a number of other factors that are really important, depending on the product category that you ship. We're a significant provider and supplier of 3PL services for outerwear companies. And when you look at the seasonality of outerwear, which is primarily a winter/ fall item,  and many of that item comes from Asia during the time that that product or doing the season that that product has to ship in, goes into the West coast.

Well, having experience, we have facilities on the West coast with the amount of containers of all product that come into the West coast. And they're quite honestly, limited capacity. It's been a nightmare this year.  And when you factor in the pandemic, if you brought product in on the West coast you took a big hit. You took a big hit in terms of costs and in terms of time and in terms of delays. Having said that, if you brought product in from the East coast where quite honestly the majority of product that's shipped are going to East coast, Northeast, which is where the bulk of the population is, certainly you have, you have the Midwest where you have a fairly sizable population there, but it's much more costly to go from West to East than East to West.

And when you factor the pandemic into it, it was a significant time and cost increase. So, you know, I think seasonality has a lot to do with it. I think the weather has a lot to do with it. Certainly holidays affect our buying patterns. So, I think you really have to factor in all of those issues.

And then, when you overlay that on top of the tariffs that we've had , which I've always been there, but obviously were a little bit more significant this year.  And we're not even sure where they're going with our new , if there's a new regime coming in, which there probably will be those trends all have to be factored in.

So, when I talk about a nimble supply chain, or a supply chain that can adapt to those;  that comes with experience of living through this and being able to have the resources to kind of flex and have the options. And a lot of it has to do with systems to be able to track it.

Christopher Lacy: With you saying all of that it does bring up the question for me, which is with all of the things that impacted supply chain and impacted companies from a financial perspective , shipping perspectives, technology perspectives. Has this possibly slowed down the ability for more sustainable and ethical processes along the supply chain?

We know that it's a growing concern amongst consumers, and, there's companies that say, you know, we're being transparent about what we're doing and consumers who want transparency consumers who want more sustainable options of how things get to them; has the pandemic kind of caused the industry to have to slow down that process?

Andrew Rotondi: Yeah.

Christopher Lacy: And that's it?

Andrew Rotondi: Yes, yeah, I mean, when you look at our business, I mean, it's just, our overall business is probably down 30 to 40%. Which is kind of ironic because when you look at the stock market and you look at some of these financial companies, they've done fine because there's just so much money pumped into the economy. So, we're not in the habit of fulfilling dollars or gold or any of that, or you would have done very well this year.  But yes, to answer your question, I feel that the sustainability, the focus on sustainability has been less, because quite honestly, the focus is on survival for many people. And you know, the food industry I've had a number of friends who are in specialty food businesses, and they've done very well. So certain segments of our consumer products have done very well.  But I believe that  as people get out more and as the vaccinations take place it'll start to swing back the other way.

 And there'll be opportunities for more investment in research and development of different products. And I think that you know, certainly the, athleisure I'm sitting here in a sweater and a shirt where if it was, as Joshua knows, if it was back in January or February, I'd be here in a suit and tie right now.

So , and that's changed dramatically. So, you know, that type of product category lends itself for that.

Christopher Lacy: Yeah.

Andrew Rotondi: And we're going to continue to see more of that. I would imagine it would swing back a little bit the other way, but I think that sustainability will be much more of a focus on that. And I hope so anyway.

Christopher Lacy: Right?  I've looked at it and thought the same thing where I was like, you know this will slow down this process, but even though there's this consumer concern, there's also the question of when the sustainability and ethical practices are put into place does it add a cost to the end product? And it could, in some cases . Are the consumers willing to pay that additional cost for sustainable and ethical practices done by a company? And I'd love to know, do you feel like the consumer is ready to go there? And so it's still would be advantageous for any organization to pursue this route.

Andrew Rotondi: Quite honestly, as I said, I think it's right now, people just looking to survive. And I don't feel that that's, it's certainly not the highest priority. You know, if you took a poll I'm sure people would say that that, "yes, it's important," but are they willing to pay more for it? Not at this time.

One of the trends that we've seen on the packaging side for sustainability is the corrugated. That we've seen on the direct to consumer side, more companies moving to plastic bags as opposed to corrugated, or boxes that are, let's say a percentage of recycled , whether that one is more sustainable than the other is, is different. I mean, I just received a package from Kohl's that came In a Mylar bag that normally would have come in in a corrugated box. And the Mylar bags said it's 30% of  recycled materials. They've always had a department that; and they wanted to be at the forefront of that as a major retailer  of sustainability  and basically recycled materials. And we've seen more companies move to that.

Now what's the driving factor for that? Quite honestly, it's really, in my opinion, to reduce costs of shipping because the cost of shipping has gone up fairly significantly for both any of the small parcel carriers and all of these companies are dimensionalizing their packages when you're shipping.

So, the size of the box versus the weight, which is what dimensionalization means, they rating based on that. So, it's certainly going to be smaller and less weight to ship it in a Mylar bag than it would be a corrugated box. And I will tell you, given what's happened with this pandemic with the amount of shipments that have gone to people's homes, the cost of both corrugated and anything paper  is going up anywhere between 6 to 10%.

Christopher Lacy: Wow.

Andrew Rotondi: So, corrugated alone, just, we got notifications is up $50 a ton in the last month and a half.

Christopher Lacy: Wow.

Andrew Rotondi: So, those prices are all going up. Most of the corrugated is recycled anyway, that we're seeing in the boxes that we're using to ship with. So, I don't know how that really fits into, is it really reducing our carbon footprint. Is it reducing this? So...

Christopher Lacy: Right.

Andrew Rotondi: It's interesting.  The vote now for me is for survival.

Christopher Lacy: Well, if we survive, we can definitely start placing our focus on other things that also matter.

So, let's let yes to your point, let's survive!

So, Andrew, I want to thank you so much for being on with us today and doing a lot at Dynamics Worldwide. So, I'd love if you could let our listeners know how they can stay up to date with what's going on.

 Andrew Rotondi:  We certainly have a website, DynamicOnline.com that you can go to. If there's any specific questions you can certainly email me andrew.rotondi@dynamiconline.com or sales@dynamiconline.com.

We do have blasts that we send out to customers. And we certainly can add you to those blasts, just go into sales and send them your email address. Yyou know, we do have followers on LinkedIn, that we do update periodically.

Unfortunately , because of some of the clients that we deal with that we're bound by nondisclosure, we're not able to share some of the details whether it be the successes or the statuses of some of our customers, only because of, of non-disclosure agreements, but certainly as an industry perspective, if anybody has any questions,  we'd be pleased to give them an update.

I mean, we do have, what I call is a 360-degree view of the supply chain for both retailers, e-tailers and wholesalers. And it's been a tough challenge for a lot of companies. There are some bright spots you know, that we've seen, and we are optimistic.

I'm also fortunate to be one of the board members of the Fashion Service Network, which provides information and opportunities for fashion companies. And we do have monthly meetings and we talk about the industry of what's going on. And we have a great board, a very knowledgeable board of both bankers, lawyers, factors, licensing, accountants. all related to the fashion industry, so we talk amongst ourselves and we do try to promote certainly business within the fashion industry. And if there were any companies or individuals who are looking to start a business, who need some advice, you can shoot us an email and you can go to the FSN website, the Fashion Service Network website, and do that. And I will say that I'm also a board member of, we have a family foundation which supports initiatives at Northwell Health, called The Gambino Medical and Science Foundation. And one of the bright spots this year has been charitable contributions. We've met our goal to provide some additional funding to Northwell for pediatric cancer. You know, everybody talks about the pandemic and the like, but we can't lose sight of the fact that disease hasn't stopped out there.

Christopher Lacy: Right.

Andrew Rotondi: And we need to, we need to help wherever we can help and we try to do that.

Christopher Lacy: Andrew, I want to thank you for ending this on such a positive note and a bright spot. And I love hearing the information you just provided to us. So, thank you so much for your time. I look forward to speaking to you again in the future, and maybe we'll be talking about how everything's changed for the better and we've officially survived.

 So, I hope you have a great rest of your day and thank you for your time.

Andrew Rotondi: You're very welcome.

Joshua Williams: Thank you for listening to this episode of Retail Revolution, a very special thank you to everyone who has helped make this podcast possible. If you'd like to support the work we're doing, please visit our show page at retailrevolutionpodcast.com and click on the donate link. Our theme music was composed by Spencer Powell.

Be well and stay tuned for our next episode.

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