The wisdom received in corporate America is that you have to spend money to make money.
And that’s true enough.
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But just how much money, how do companies decide to return to their shops and how well all these dollars are spent – very important.
Fashion goes through an investment cycle and pours more resources into technology and business.
A WWD study on annual reports that result in the details planned investment expenditure for the coming year showed that 14 of the 18 tested companies increase expenses.
Amazon and Walmart Inc. are on the list as the largest clothing dealer, but are really outlier domances as in the world of e-commerce and in Walmart’s case inpatient shops.
Together, the two managers plan to issue more than 100 billion US dollars for Capex this year and to plow more funds into a future that is strengthened not only in terms of scaling, but also more digital.
Last year Amazon plowed and plans 12.2 percent of its turnover in Capex to spend more this year, and while a large part of it is taking its lucrative web services -Cloud business, it offers a useful comparison point. The rest of the list only issued 3.5 percent of sales, which accountants call “property, facility and equipment”.
And some of the weakest companies in the industry reduce their expenses.
Kohls Corp. For example, its investment process reduces an area of 400 to 425 million US dollars compared to $ 466 million in the previous year, which is the focus of a decrease of 11.5 percent. There are some nuances kohl’s just exchanged information from a route in which it increases the expenses for the introduction of Sephora shops in the shop, but the company also has a turn in a turn and has many areas that could use TLC.
Sonia Lapinsky, head of the Fashion Retail at Alixpartner, compared the Capex editions in the broader economy.
“The large companies are like billionaires,” she said. “You have more and more advantages, can spend and come ahead.”
This competition – everyone who competes with Amazon and Walmart in one way or another – makes it all the more important for everyone else in business, making fashion and selling to be careful where they put their money.
The problem is that there are so many places to spend – and to be able to catch up, since so many fashion players like to be quick followers instead of pioneers.
“We often go to retailers and their systems are old and inadequate and they have been planted together for so many years,” said Lapinsky. “A lot of it is only an upgrade. At some point you have to improve a large part of this technology infrastructure. So you may have low technical costs, but you delay the inevitable. We call it technical debt.”
Likewise, retailers and brands have looked at their physical business compared to pandemic and are still playing catching up.
“It is in 2025 and we finally realize that people actually want to shop in the shops again,” said Lapinsky. “The retailers have taken all the costs for the shops when they close them. They somehow get used to this low level of costs and costs. Now it is almost like the debts of the shops. The same. The business needs some facelifts and upgrades and consumers require a better experience.”
While the buck always lasts with the Chief Executive Officer, the matter of Capex really ends up on the Corner switch.
CEOs in large companies forms strategy and “sell” investors to promise future growth, but at its core there is their job to assign resources, to devote money and people to a problem or plan.
“You all have every manager – the head of the shop, the head of marketing, the digital product – all with all these needs needs and tell you that you are most important and critical,” said Lapinsky. “How does this guide evaluate and deepens where they will use their dollars? What will give you the greatest bang for your money?”
This is a question that is now more urgent, since artificial intelligence is not only the cultural conversation, but also the investment discussion in the economy.
“We will see a kind of shift in the CEO of retail in the coming years because the skills are simply different,” said Lapinsky. “And those who do not hug this and either learn what questions are to be asked and how to put the right people around themselves will think that they will really be neglected.”
AI is expected to receive more and more investments, although companies are still trying to find out how this money can work effectively.
“What we have seen in recent years is that everyone in AI deals,” said Nora Kleine Willinghoefer, who heads Luxury and fashion in Kearney’s consumer practice. “If you don’t work with the AI today, don’t keep going with the market.”
CEOs think bigger and bigger in this dabbling.
“We see the shift in the shift in the shift in the shift that reinterpret the future of work sensibly,” said Kleine Willinghoefer. “So we speak everything of the concept of product design, the merchandising and planning functions. Of course, some of them are more suitable for automation.”
Brands also plan to use AI to support the design, connect with consumers and much more.
“Not only the task is automated here or some good insights there,” she said. “It’s about really rethinking the role of these people. What does the dealer do the future? How are you scenario management? How do you consider data sources much more sensible?”
If you do all of this correctly, the type of leadership is required that really cannot buy money.
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