The Candid Voice in Retail Technology: Objective Insights, Pragmatic Advice

Sustainability: Fashion’s Next Frontier

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In the “Before Times,” the fashion industry was just beginning to grapple with the impact of fast fashion and a general glut of product that ends up damaging the environment and generates sad and terrible human rights abuses across the entire product lifecycle.

The pandemic certainly highlighted one thing, for sure: the industry simply makes too much stuff, and while we talk about supply chain shocks, the demand chain shock of all shocks highlighted just how much “too much” really is.

Sometime in the next nine-to-twelve months, this issue is going to come back into sharp relief. Why? Because product is coming in anticipation of a strong holiday season, and there’s still the matter of disposing of last year’s “stuff” which never went anywhere.

Be prepared. Pressure will rise as soon as the Pandemic starts to unwind, for all brands, but most especially fashion brands at all price points. Fast fashion may well suffer at the hands of recycled higher-end merchandise. This year we did hear about China’s horrifying treatment of the Uighurs, including forced labor and potentially pure genocide. Brands promised to avoid cotton picked in their region, but it rapidly became apparent that it was hard to separate the cotton produced in their region (XUAR) from all other cotton. The region produces a fifth of the world’s cotton and if you’re producing product with cotton grown in China, there’s no real way to tell where exactly it came from. A reckoning will come soon. H&M has already been tarred with the Uyghur brush. More companies will follow.

There is no doubt this warning will cause many eye-rolls. A year of almost no business and now you want us to worry about a different existential threat? C’mon. Well, yeah, I do. Why? Because the consumers do. Further, you can expect that as Generation Z starts to take its place in the world of consumption, they’re going to care even more!

The Center for Strategic & International Studies suggests strongly that finding alternative sourcing opportunities is an imperative. The Business Of Fashion just introduced The BoF Sustainability Index, which involves “measuring fashion’s progress towards avoiding catastrophic climate change and achieving broader social imperatives by 2030.” Boy, that’s a mouthful. But it’s also an imperative. In a podcast available on the site, the BoF evaluates how 15 of fashion’s largest companies measure up.

Now, to be completely honest, when it comes to environmental challenges I was much more focused on technology throw-aways, but it turns out that fashion has a huge impact on our environment, from production through lack of consumption (or in the case of fast fashion, the rapid throw-away of purchased merchandise). So BoF editor Sarah Kent spent her pandemic lockdown time with her team developing the index that includes waste of both human and natural resources.

After 15 years of being enamored with cheap stuff, suddenly, the industry is talking about a very fancy term: Scaling circularity. What does that mean? In simpler English it means the increased sale of second-hand clothes. The resale market has been building for a decade, but really did pale compared to the crazy-fast supply chain of companies like H&M. “Second-hand” is becoming cool, just as quality and timelessness is coming back into vogue. You can be pretty sure that a (for example) Gucci second-hand product will last longer and be of higher quality than a first-run H&M product.

Why does this matter to a retail tech analyst like me? Well, first, I’m simply a student of retail. It feels like I never hit the bottom of issues in this deceptively simple industry. Second, I do care about what happens to the world we leave behind for future generations. Third, I’ve always thought that sourcing product halfway around the world from the point of demand was very short-sighted and had hidden costs that didn’t always show up on today’s P&L. Finally, you can’t do a lot of what’s being proposed without technology. Technology is needed to measure a baseline for fashion retailers in emissions, water and air pollution. Then it’s needed to measure progress.

I listened to a podcast on the topic, and the message was straightforward. The industry is moving too slowly. Here we are, retailers and brand managers alike. We thought this was one of the most dynamic industries around. Now, from almost every angle, retail time just isn’t fast enough. It’s time to change.

So, along with your omnichannel initiatives, it really is imperative to think about sustainability initiatives. A decade ago, partner Steve Rowen and I conducted a benchmark study on sustainability in retail, and we found that really, for retailers it was simply a proxy for cost-savings. That was then. Whatever you thought then, and whatever you may think now, this is a BFD for today and tomorrow’s consumers. Instead of waiting for disaster to strike, it behooves us to make process, sourcing and monitoring technology investments to ensure we can stay ahead of it.

When I had my knee replaced a couple of years ago, my surgeon strongly recommended that I “stay ahead of the pain” because it was easier to control it before it hit than after the agony struck. I didn’t love it. Four weeks of constant pain medication was actually not my idea of a good time. Still, the one time I avoided “staying ahead” I was in a world of hurt for hours, until I got it back under control. I learned my lesson.

Long story short – fashion retailers and brand managers – stay ahead of the pain. Even as you’re working your way out of the pandemic blues, you have to act to improve the sustainability and simple humanity of your supply chain now. As they said in the BoF podcast, you must start to make your plans now. It’s not going to be cheap. It’s not going to be easy. But it must be done. Put together a cross-functional team to work on the problem. Maybe consider hiring a “VP of Sustainability” whose job it is to focus on the issue and lead this team. Work with suppliers and other retailers and brand managers to create improvements. Think about your sourcing strategies.

Ultimately a more sustainable enterprise with less excess product will be a money-maker. Getting there won’t be easy, but if you can stay ahead of the pain, you’ll find yourself in a much better position.