eCommerce Forum Addressing the Market Distruption December 5

e-Commerce Forum Addressing the Market Distruption December 5, 2017 CONFIDENTIAL 1

A New Business Vocabulary Disruption Transformation Innovation 4/12/17 CONFIDENTIAL 2

A Quick History Market Clout • The Manufacturer – from the start of the Industrial Revolution until late in the 20 th Century, the manufacturer determined what would be made • The Retailer – In the last few decades of the 1900 s, the retailer, especially the mass retailers, assumed the power seat determining style and volume • The Consumer – now sits in the power seat influenced by what is “hot” today and fueled by E-Commerce

Amazon is now the largest US Retailer Source: Cohen & Co.

> 2000 US retail stores closed in 2016 > 2 X that amount will close in 2017 4/12/17 CONFIDENTIAL 5

“America’s Love Affair with Shopping has gone on-line” (the Economist) 4/12/17 CONFIDENTIAL 6

Typical US Shopping Mall

Apple Store the Exception

Reach of Internet • 48% of individuals worldwide use the Internet • 54% of households worldwide have Internet access • Close to half (47. 6%) of the world’s households own a computer • In developed countries, 81% use the Internet • Internet usage is definitely youth driven – 71% of 15 -24 year olds worldwide are on-line – 94% of youths in this category are on-line in developed countries • But, it is not just generational …. . Source: International Telecommunications Union

Market Evolution, Revolution, Disruption Everyone in this room is an on-line shopper!! • I used to ask how many people have shopped on-line but today I ask how many have not • So, let’s see a show of hands – has anyone not shopped online? • How many of you have shopped on-line in the last month? The last week? 4/12/17 CONFIDENTIAL 10

Market Evolution, Revolution, Disruption So how does this impact Suppliers and Factories? • Consumers buy multiple sizes and return the ones that don’t work • Consumers want a fast delivery (65% of people that buy at retail say it is because they want to product right away, “buy-now, wear-now”) • Consumers want to avoid shipping costs (44% say they purchase only from on-line sites that have free shipping, this is sometimes a major reason why they buy rom a retail store) • On-line returns have gotten easier and easier • 50%+ still buy retail but they have narrowed the search on-line 4/12/17 CONFIDENTIAL 11

A Renewed Mantra Make what is selling instead of Selling what has been made Speed to Market is essential for e-Commerce Execution 4/12/17 CONFIDENTIAL 12

Addressing Disruption • Takeaway #1 – “Blowup the traditional development process” • Takeaway #2 – Embrace 3 D Design, Planning and Selling (Virtual prototyping) • Takeaway #3 – Supply Chains must be shortened (from recent speech by Ed Gribbin, Alvanon)

The Risk of Complacency “If it Ain’t Broke, Don’t Fix It” – Thomas Bert Lance But the world continues to change (even faster)and if you ignore change you stand to lose You need to understand the “new” playing field and reexamine your competitive strengths and weaknesses Page 14

You are operating in a complex and complicated environment but do not fool yourself by thinking it will return to the old way of business or get easier. So let’s hear from our panel ….

E-Commerce Panel • Raymond Conesa - Director e-Commerce, Perry Ellis International • Simone Ross – Vice President Setlog; former VP Development and Sourcing Victorinox/Swiss Army; Director Product Development, Hugo Boss • Colin Israel – Founder/President Black Ink Strategy; former CFO/COO Alpha Industries; former Managing Director/GM International, Black Diamond; former CIO, Volcom • Moderator: Walter Wilhelm – Chairman WWA Advisors

E-commerce & Merchandising Forum | 5 th December 2017 Meet OSCA® ©Setlog

No time for further delay “While there is a tendency to do nothing until everything settles down, consumer behavior is rapidly changing and increasingly demanding. ” “Delaying will only leave you further behind. ” Prof. Joel Sutherland, Managing Director Supply Chain Management Institute University of San Diego December 5, 2017 ©Setlog

Challenges of SCM – Complexity and Interaction Information flood Short Product Lifecycle Speed to market Globalization Sustainability Additional Services Social Compliance Standardiza tion Collaboration December 5, 2017 Multi-/Omni Channel Green Production & Logistics ©Setlog Page 19

…making value chain management smart connective, … Product Development Sourcing Order Management Quality Assurance Logistics Integration Gateway Agencies Supplier Factories Forwarder Quality Control Compliance Laboratories Corporate Communication Warehouses December 5, 2017 ©Setlog Page 20

Some Facts & Figures about Setlog Locations: New York (USA), Bochum (Germany) Founded: 2001 Industries: Apparel, Textiles, Shoes, Bags, Electronics, Furniture, Toys, Pots & Pans 80+ Countries online 100+ Loyal clients 35, 000+ Users across the globe December 5, 2017 ©Setlog Page 21

Io. T- The Internet of Things Quelle: Eröffnungsvortrag auf dem Zukunftskongress 2017 - Prof. Dr. hc. Michael ten Hompel acatech Study 2017 December 5, 2017 ©Setlog

The Century of Supply Chain Management The 20 th Century mobilized people. The 21 st Century mobilizes things. “When we take our chances, this will become the century of Supply Chain Management. “* *July 29, 2017 Prof Michael ten Hompel at the Official Opening of the Logistics Campus at the Fraunhofer Institute, Dortmund, Germany December 5, 2017 ©Setlog

E-Commerce Panel • Raymond Conesa - Director e-Commerce, Perry Ellis International • Simone Ross – Vice President Setlog; former VP Development and Sourcing Victorinox/Swiss Army; Director Product Development, Hugo Boss • Colin Israel – Founder/President Black Ink Strategy; former CFO/COO Alpha Industries; former Managing Director/GM International, Black Diamond; former CIO, Volcom • Moderator: Walter Wilhelm – Chairman WWA Advisors