Fashion and sustainability: the crying need for a more responsible supply chain management
Farfetch has announced launching pre-orders on some of the brands on its platform. That’s some news to be happy about and let me tell you here, in my humble opinion, why.
First let’s remind ourselves of the CSR landscape and current stakes in the fashion industry.
One, the environmental impact of fashion.
Although numbers vary greatly, and there is, unfortunately, as of today no precise mean of estimating accurately this impact, it is commonly agreed on that fashion pollutes and not in a small way.
Small aparté, and I won’t get into too much detail here, but accurate data, or the lack thereof, is a key pain point to address. It hardly means anything to set goals such as reducing the industry’s emissions by 30% by 2030 when one doesn’t know where he is starting from and hence can’t set up appropriate action plans. Having a comprehensive and reliable calculation of the industry’s and its companies’ environmental footprint is step number 1.
Fashion produces carbon emissions whether through its manufacturing plants or transportation from one point to another often across the whole globe; fashion produces a lot of waste with tons of unrecyclable packaging, one time use VM props, unused stock of fabrics and materials, the unsold product stock and, at the end of the cycle, the consumer’s used clothes; fashion uses a lot of water in particular in the denim industry where the UN estimates that it takes almost 4L of water to make one pair of jeans from producing the cotton to getting the pair to the store; fashion uses polluting heavy chemicals, whether be the pesticides in the cotton field, the leather tanning chemical or the dyeing chemicals, taking a heavy toll on its workers’ health and potentially polluting water supply and landfills.
Although for now [Farfetch’s] pre-order concept is based on stock that has already been produced, I expect it, long-term, to be done pre-production and to be generalized across channels so brands can estimate their production based on the actual feedback from the market and not on mere bets from buyers and business analysist.
Second, the societal impact.
This is a wider topic that will require a dedicated post but let’s state among many things fashion’s long established distorted beauty standards, indirectly promoting eating disorders and self-doubt particularly among female teenagers, fashion’s labor abuse from overexploiting cheap production labor in sometimes unsafe conditions to lacking regulation for its models and their well-being, fashion’s lack of diversity whether in its common representations or among its staff and lastly fashion’s inequalities with a clear underrepresentation of women in top executive positions. Of course, situations vary greatly among the different companies in the industry and lots of progress has been made lately especially with movements such as #MeToo or #BLM, associations such as Model Law in France to promote the fashion models’ rights, the enactment of charters such as the 2017 LVMH-Kering one or the slow shift in common representation towards a more diverse landscape. But still, there is tremendous progress to be made for an actual change to happen.
Last, but not the least, the impact on animal welfare.
While this has been a concern at Stella McCartney’s for years it is definitely not common to most companies. With leathergoods representing up to 50% of the revenues of one’s brand, it is understandably a very sensitive topic and most brands are not ready to go leather-free. Going exotic-free — eg alligator, ostrich, snake, lizards — was one step, led for instance by CHANEL or Victoria Beckham, as producing exotic skins can hardly comply with ethical means of production — cf the Hermes Texas alligator farm scandal from 2015 — some countries even believing that skinning animals alive makes their skin suppler. But such move is yet to be seen at bigger exotic leathergoods players and regardless, its weight remains small in the offer and in sales versus that of regular leather.
More and more brands are also going fur-free and, while it is appreciated to see brands such as Fendi, key player in the fur industry, to offer faux-fur products on its runway or big multibrands such as Neiman Marcus or MyTheresa going fur-free from Spring 2022, again the core of the issue remains regular leather and what’s more, going fur-free doesn’t mean anything if it is without sustainable and responsible alternatives. Indeed faux-fur, especially in the fast-fashion industry, are highly reliant on synthetic polymerics, aka plastic, and usually require dyeing, which means, as mentioned earlier, heavy chemicals, water pollution etc. The substantial challenge hence becomes producing faux-fur that looks real, is as durable and as warm as the original while being made of sustainable and recyclable materials and in an environmentally responsible way.
Some may argue that leather is a by-product of the meat or milk industry […]. Farming cows for their skin is a great lever for revenue and profit maximization, [and] with the rise of non-meat trends among consumers it is utopian to believe that leather will remain a by-product of the meat industry.
Back to the elephant in the room: leather. Some may argue that leather is a by-product of the meat or milk industry and although that’s in great part true, this is not a sustainable approach. One, because the farmer production is still driven by consumer demand and by revenue growth while leather is the most valuable part of the animal — meaning that farming cows for their skin is a great lever for revenue and profit maximization. Second, because, with the rise of non-meat trends among consumers it is utopian to believe that leather will remain a by-product of the meat industry. Also, on top of those by-products, the most luxurious skins often come from newborn calves, taken away from their mother and killed before they can be edible, or worse, from unborn calves, which undisputedly raises high ethical concerns. Lastly, while this by-product approach might be true in regulated markets in Europe or the US, it is very much less the case in developing countries where animal protection laws are close to non-existent and where endangered species are cruelly killed regardless of their meat production capacity.
Back to today’s topic, Farfetch’s launch of preorders and the overall need for a shift in the Supply chain management. As mentioned at the beginning of this post, fashion gives rise to a lot of waste whether in raw materials or end products, and this is becoming more and more of a concern given the tremendous growth ambitions in the industry and post-pandemic revenge shopping just around the corner.
So, what is it that brands can do? Implement a more responsible supply chain management.
First, brands should know where and how the pieces they sell are made and should communicate transparently on it. H&M for instance is able to display on its EU and US websites the environmental impact of some of its products in terms of water consumption, greenhouse gas emissions and fossil fuels, thanks to the Higg index, developed by the Sustainable Apparel Coalition. Regulations forcing companies to investigate the sourcing of their products should also help.
Second, companies should try to turn to eco-friendly materials whether for their packaging or for their products, focusing their efforts on their big volume drivers first. Nylon for instance is not biodegradable and causes high volumes of greenhouse emissions while it represents a significant part of the offer at Prada, with its signature Nylon offer requiring about hundreds of thousands of meters of nylon annually, or Longchamp, with its iconic Le Pliage bag. Both brands have switched to recycled nylon, Prada even making a brand statement by launching the Re-Nylon product range made of nylon coming solely from ocean plastics, fishing nets and textile fiber waste. Packaging should be the first priority to tackle though, as it has the shortest lifecycle, and while the topic might be easy to address for fast fashion brands — cf H&M shifting to paper bag packaging for its online orders — the challenge could be more substantial for luxury brands where the packaging’s design and aesthetics are a key part of the brand’s visual identity and require meticulous care and quality.
Third, fashion brands should strive towards a more circular industry, encouraging recycling and reducing waste. Stock destruction is not an option anymore and is certainly detrimental to one’s brand image. Starting with the materials used in the production cycle. As fabrics and patterns are very often one-shot, particularly in the luxury industry, brands either destroy or pile up unused stocks in their warehouses, to usually never be used again. With this in mind, LVMH launched Nona Source, an online platform giving access to emerging creatives and brands in Europe to high-quality fabrics and leathers at a competitive price.
Then comes the stock depletion of final products, where brands need to think about the post-shelf life of their products, starting with destocking. First, internally, though staff sales, which most brands manage on their own, trying to strike the right balance between depleting the stock and not overwhelming the market with their products as it would risk devaluating the latter and lead to potential brand dilution. However, due to the usually inefficient management of these sales, the prices remaining high for a big portion of the staff and some products being overly creative for the average person not identifying herself to a VOGUE photoshoot model, there is no such thing as a 100% sell-through. That’s when the second destock cycle starts, handled by external vendors such as Arlettie in France or Onthelist in Asia, which is usually not used by top-tier luxury players out of fear of brand dilution, hence the need for brands to internalize resale as much as possible and to rethink the way this is done, through all-year-long internal online platforms for instance.
It is up to the consumer, and society as a whole, to operate the mind and behavioral shift towards a more responsible consumption, recycling, re-using, reselling, donating, buying timeless pieces more than fast-fashion, buying second-hand and maybe even renting instead of buying…
This being said, an even leaner stock management approach would be to avoid having the need for this depletion at all by having a better match between the offer and the actual demand. While in the luxury industry this is pretty much under control with strong merchandising teams at global, regional, local and sometimes even boutique level, enabling to have the most accurate forecasts and the most targeted offer, this is not always the case in the fast-fashion mass-consumption approach. Regardless, forecasting and buying have flaws and are not 100% accurate since they are human-led and since it is important to take bets on some products in order to display the vitality of the brand through a wide offer including highly creative pieces. This is when Farfetch’s pre-order announcement comes into play as, unlike the now old see-now-buy-now concept, it can help reduce the gap between offer and demand. Although for now this pre-order concept is based on stock that has already been produced, I expect it, long-term, to be done pre-production and to be generalized across channels so brands can estimate their production based on the actual feedback from the market and not on mere bets from buyers and business analysist.
Lastly, stock management does not stop after the product has reached its happy end-consumer. Indeed, the industry’s responsibility extends in my opinion beyond the lifecycle spent under a given brand’s ownership. Afterall, fashion, even on the luxury end, remains fashion, and can get out of trend or fall out of favor with its first owner and that’s when brands should consider the second life of their products as well, owning resell platforms or networks, both internally and externally, or offering in-house restoration services such as CHANEL’s Chanel&Moi restoring care service for iconic handbags. On the resale side, VestiaireCollective has paved the way and while it is being addressed by multibrand dealers such as Farfetch, who has included a section dedicated to pre-owned and vintage since 2010 on its platform, or fast fashion brands such as H&M, who just launched H&M Rewear in Canada, a platform to buy and sell second-hand items from any brand, it is far from being addressed by luxury players.
To wrap up, the stakes and options are still wide open and there is a lot that brands can do. First step will be setting up a standardized approach to establishing and analyzing figures. Then, setting up a consensus as to what the industry’s targets are with a clearly identified timeline. Lastly, aligning on regulations across all the CSR topics raised above and having a clear roadmap with new technologies and new business models not solely dependent on product consumption, while operating an overall cultural shift when it comes to consumption. All of which will require industry-wide commitment and investments. Also, fashion brands should be mindful of how they address this topic, be consistent across their different initiatives and make sure their values, speech and actions are aligned to not come off as an opportunistic upstart, which would be the most detrimental to the brand’s equity.
Of course, regardless of all the things that brands can do, it is up to the consumer, and society as a whole, to operate the mind and behavioral shift towards a more responsible consumption, recycling, re-using, reselling, donating, buying timeless pieces more than fast-fashion, buying second-hand and maybe even renting instead of buying…. Although this last business model still needs to be finetuned to reduce the environmental footprint linked to shipments and to the clothes’ cleaning, to offer a more elevated customer experience and to have leaner stock management, I am highly convinced of this alternative for the future of fashion and a great supporter of the likes of Renttherunway or Frontrow, with many more to come I’m sure!
