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Yarn Market
Jim Phillips, Contributing Editor

Keeping Customers Happy

Jim Phillips, Contributing Editor

I n an environment where price is king and competitive pressures intense, yarn spinners today should be looking for every opportunity to differentiate their businesses from their competitors.  If a spinner has a better product at a better price, or a product with enhanced intrinsic value, creating separation from competitors is usually not too difficult.  But what about commodity offerings in which each player is offering basically the same product at the same price to the same customers?

"In a commodities-based business, price always rules," said one business analyst.  "But in a market where there are multiple choices from similarly priced competitive products, opportunities exist to separate from the pack.  Speed to market is, of course, a key factor.  And so is customer service, both before and after the order is placed.  Product quality is also a huge issue.  Few things ruin business relationships faster than a product that is not quite up to specs.  But a major intangible in business is the customer experience. How easy is it for customers to buy from you?  Is ordering simple, with clearly delineated expectations for both the manufacturer and the customer? In a commodities world, all else being equal, customers keep coming back to those companies they like to do business with."

"We are able to keep our customers happy by having an aggressive delivery strategy," said one Southeastern spinner.  "Our ability to get business often hinges on whether we can get product to our customers, particularly those in Central America, faster than anyone else."

Said another:  "Our customers tell us they often have quality issues from offshore manufacturers.  Sometimes the product isn't up to specifications.  Other times they get the wrong product entirely. Our customers know they are going to get exactly what they ordered when they buy from us.  This helps us tremendously, especially in those instances where we can't quite match the price."

"Service and the customer experience is everything today," said the analyst.  "When one product is the same as another and can be had for the same price, the only way to stand out is to make sure your customers are not just satisfied, but happy – and that goes way beyond meeting basic expectations."

Blue Times For "Green" Companies

Of course, the best way to generate new business is to create an offering that is markedly different than others in the market or that fulfills unmet customer needs.  But, just because something is all the rage, that doesn't necessarily guarantee success.  Take, for example, the current "green" wave sweeping the world in a number of product areas.  While consumers are increasingly demanding cleaner water, organic foods, cars with reduced emissions, environmentally friendly papers and so on, there seems to be a relative lack of regard for the textile products they use and wear." The recent Chapter 11 filing of a noted textile company is evidence that the same consumer who demands organic fruits and vegetables may not be so discerning when it comes to textile and apparel products.

Wellman Inc., the first company to make fiber from recycled post-consumer waste, filed for Chapter 11 in February. Martin Color-Fi, another producer of products from recycled waste, underwent several reorganizations in the earlier part of this decade.  Both of these companies took a difficult-to-dispose-of waste, the PET containers commonly used to bottle soft drinks, and made fibers and yarns for home fashions, apparel, recreational vehicles, carpets and a host of other end-uses. According to Wellman's website, the company has the capacity to reclaim 2.5 billion PET containers per year.

Many spinners note that the difficulty and expense associated with manufacturing green textile products isn't justified by consumer demand.

"Manufacturing organic products may be great for large companies that have the resources to do it," said one specialty ring spinner. "But it can be difficult for smaller ones. We just can't justify the cost."

Part of the problem, he said, is the difficulty in charging the consumer for value adds in textile and apparel products.

"If a consumer sees blue towels at a retail store of apparent similar quality, she is usually going to buy the cheaper one, regardless of whether the more expensive one was made from organic cotton," he said.

"Adding value is important in being able to generate sales," he continued.  "However, it's important for us to get return on that added value. And we're just not seeing that right now in organic products."

April 29, 2008