Just before Covid-19, French President Emmanuel Macron and François-Henri Pinault, CEO of Kering, revealed the Fashion Pact at the G7 summit last year. Aimed to dramatically reduce the environmental impacts of the fashion industry, the coalition was signed by over 70 fashion companies, including the likes of H&M, Nike and the PVH group.
While it seemed like the groundwork for a more sustainable future had been laid, many were worried the economic implications of the pandemic would derail the industry’s plans. Fuel was added to the situation as consumers were left appalled as fashion companies abandoned suppliers and factory workers, contributing to an even larger humanitarian crisis.
However, as all of this was happening, a demand for more ethically sourced products started to gain momentum. Consumers, now more aware than ever, are more insistent of product transparency, especially regarding sourcing and materials.
Despite popular belief, sustainable sourcing counts only as a small fraction of reducing a brand’s carbon footprint. To achieve full sustainability, the efforts must go further than just the supply chain. This means rethinking the way brands produce collections, the retail calendar and ultimately, creating a more circular lifespan for fashion products.
The inventory problem
To get to the root of the problem, the sustainable mindset has to start before the collection is even made.
An issue that many brands face at the end of the season is excess inventory. Typically contributed by poorly planned product cycles, fashion’s rigid seasonal calendar of Spring/Summer and Fall/Winter requires brands to launch products way ahead of the real corresponding season. Essentially, it means brands are releasing spring products in winter and summer products in fall.
It is important to remember that this system was created prior to the online shopping craze, when brands only had physical stores, and shipping and distributing inventory to all these locations took several months.
However, today’s shopper is a “buy-now-wear-now” consumer. As online shopping grows more common, even the concept of a seasonal collection is outdated.
Because of this seasonal misalignment, brands are often left with piles of unsold stock that require markdowns to clear. This puts a further impact on exit margins, leading to reduced profits and worse, more waste in the landfill.
However, the solution to this problem is inherently simple. By reworking the trading schedules and planning product launches closer to the season, brands are able to provide consumers with products when they actually want them – and delay the need for markdowns. Furthermore, by expanding a product’s shelf life, it is able to be sold for a longer period of time at full price.
This exact strategy was used by H&M for their summer product launch this year. Omnilytics captured that the brand launched its collection on June 1, less than a month before the official start of summer in the US. This eventually helped the brand to have a more robust trading season, steering clear of deep discounts and improving its stock position.
Brands that relied on international sourcing were among the most affected by lockdowns. Unable to get inventory across borders, many were forced to resort to near-shore sourcing to fulfil their production needs.
For example, brands like H&M that source the majority of their products in China encountered various logistical problems in receiving their orders. As a result, production had to be quickly shifted to alternative sourcing locations such as Vietnam and Mexico.
While sourcing from multiple locations undoubtedly increased production cost, an upside to this was that many were able to expedite lead times by avoiding long-haul shipments. Concurrently, not having to import products from overseas resulted in brands lowering their carbon emissions greatly. Shifting to suppliers nearer to home also provided more flexibility for brands to react to shifting demands, even during a season.
As mentioned earlier, the growing number of conscious consumers has also urged fashion brands to further explore sustainable materials. One of the materials that saw highest growth this year was Better Cotton, a more ethically grown and sourced form of cotton. Omnilytics data showed an 800 per cent increase in the number of new Better Cotton products compared with the same period last year.
The use of recycled materials and hemp has also increased, driven by the denim segment. Levi’s currently has a sustainably focused capsule called the Wellthread Collection, which features hemp as the main cotton substitute.
Hemp is not only more sustainable but also more economical compared with regular cotton, as it requires approximately 70 per cent less water to produce while occupying less space.
As sustainable fashion becomes increasingly part of the industry narrative, it’s still far too common for brands to falsely claim sustainability to capitalise on its growing consumer base.
Even well-intended brands have fallen victim to greenwashing due to the lack of transparency in third-party suppliers and the wider supply chain. Before communicating these efforts publicly, brands must ensure they are advocating sustainability in an authentic way and the information shared is entirely accurate.
For example, brands like Patagonia and Levi’s have integrated detailed information regarding the origins of their materials and production processes in the garment tags of each product. Everlane has taken the concept of transparency even further by sharing how the price of a product is calculated through a diagram displayed on the product page. The process, called transparent pricing, explicitly discloses all the costs involved in producing and shipping.
Beyond just product information, Everlane also practices the “choose what you pay” concept, which allows customers to decide how much they are willing to pay for an item and understand the effects of cost on product development.
This concept was initiated to help Everlane get a better idea of consumer demand and avoid overproduction by only focusing on an optimal number of units. Although seemingly a risky move, revealing the true cost behind their products resulted in 12 per cent of customers purchasing the item at a higher price.
Looking to the future
As stated by Michael Kobori, the former vice president of sustainability at Levi’s: “Sustainability is probably number nine or 10 in the list of factors that they use to choose [a pair of jeans]. But all other things being equal, sustainability can be a differentiator for the brand.”
By now, most professionals in the industry are in agreement that the current way of operating is not only damaging but is also unprofitable in the long haul. With the impacts of climate change progressively affecting our daily lives, the call to build a more sustainable future is louder than ever.
A growing niche with indispensable importance, sustainable fashion is not just another opportunity to fulfil corporate responsibility but to bring genuine change and forge a more resilient fashion industry that is free of all negative implications.