The competitive advantage from sustainability for fashion businesses

The competitive advantage from sustainability for fashion businesses
26th February 2020 Robyn Lockyer
Robyn Lockyer
In Blog

As the focus of the global fashion industry goes from London to Paris via Milan for the first Fashion Weeks of the year, one increasingly important question faced by every big fashion house, major brand and upstart label is how to meet demand for greater sustainability where business models depend on consumption for their commercial success.

Consumers want it – as evidenced by the threefold increase in online searches for sustainable fashion between 2016 and 2019 – policymakers are increasingly ready to demand it, as demonstrated by last year’s Environmental Audit Committee’s Inquiry into the Sustainability of the Fashion Industry and campaigners like Extinction Rebellion show no sign of letting up on the pressure they put on the sector to change.

So how well is the industry responding to this pressure? The pace of change may not be as fast as some would like, but there are clear signs that across the fashion sector, companies are starting to seek out ways of making their business models more sustainable.

Sustainable products and production

One area which has seen scrutiny from the public, campaigners and government, is the impact of pollution and water scarcity on vulnerable local communities, a result of wasteful and destructive production models.

Fashion businesses are starting to respond by making changes to the product and how it is produced, with more sustainable commercial practices influencing operating models.

The surge in ‘conscious collections’ has seen increased recycled content in garments and innovations in alternative materials, claiming more sustainable footprints. For example, H&M is trialling the use of natural coffee dyes and ‘leather’ produced from wine by-products. This follows a shift from a focus purely on bio-based and recycled fibres.

More progressive brands are looking to adapt part or all of their business model around new avenues for growth in resale platforms and rental services.

Rental markets are appealing to the customer appetite for ‘newness’ minus the waste. Platforms such as the RealReal and thredUp are giving customers a means of interacting with luxury brands at a more accessible price point – also opening up new demographics and relationships with customers. Similarly, brands that have typically used more traditional sales models – such as Gant – are increasingly experimenting with rental service models with forthcoming collections.

Radical transparency

A second area of change is being driven by increasing consumer confusion over what ‘sustainable fashion’ really is and what it means to them.

Customers want more meaningful and reliable information on the sustainability of clothes they wear – both product level information and information about how garments are produced – the impact on the community and workers.

At the vanguard of this are brands such as Everlane, which has embraced an approach of ‘radical transparency’, listing supplier factories on shop floors and social media, sharing price breakdowns with its customers alongside details of provenance of the fabrics used in the garments.

The designer brand Theory recently unveiled a new labelling system for its garments which demonstrates to customers that its signature fabrics – wool, linen and cotton – can be traced back to their origins. The company is now working towards increasing the number of items that can carry the label.

And, transparency is no longer really enough: there is increasing demand from customers for concrete actions brands are taking to ensure products are made with the highest environmental and social standards – and reflect greater engagement with their suppliers focused on continuous improvement in performance.

An alternative to disposable fashion

A third area of focus is seeing brands use their retail stores as assets which can be used to improve their sustainability performance, providing unique experiences that connect with customers on sustainability in new ways in-store.

Textile recycling or takeback schemes have become more commonplace, with many brands and retailers offering rewards or incentives in-store for customers returning unwanted clothes. Some retailers now offer repair services or on-demand personalisation in-store as a way of extending garment life.

There may be a long way to go before the fashion industry can flaunt its sustainability credentials, but the future direction of travel for the sector is clear.

The challenge for brands is to understand what this means for their operating model and what kind of relationships they must forge with customers, manufacturers and other cross-sector partners.

It requires a new mindset which is not only prepared for scrutiny but focused on continually meeting the highest social and environmental credentials.

The brands which embrace this soonest will be best placed to thrive while those who drag their feet will likely find themselves competing for an ever-diminishing pool of customers.