Promising areas for innovation in COVID-19 times: Part 2

Fashion for Good points to solutions in key focus areas to strengthen the fashion industry

Katrin Ley
Jun 3, 2020 · 5 min read
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Credit: Fashion for Good

In our previous article, we covered Supply Chain Transformation, the first of three key areas in the fashion industry that have been highlighted by COVID-19 and the ripple effect of the lock down on the fashion supply chain. Though these areas have long been on the industry’s radar, given the devastating impact of the crisis and the immediate need for alternative solutions, they have received tremendous attention in recent weeks.

In this second piece, we will cover innovations that offer solutions in Stock Management.

Part 2: Stock Management

Many fashion retailers deal with overstock issues as a matter of everyday business. As sales decline with many stores having to shut down, vast volumes of unsold and unshipped garments (+40 – 60% deadstock and overstock from the COVID-19 crisis according to a survey by the Global Fashion Agenda) are now a costly resource.

Brands and retailers need solutions that retain the value of their product as long as possible.

We highlight five options* for stock management: Sell, Shift, Rework/Resell/Rent, Keep and Recycle or Downcycle. Where possible, we’ve included innovators working on these opportunities from around the world.

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Credit: Presstigieux

The natural first option, even if at a discount. Important points to consider if this is the chosen solution are brand dilution risk and the potential resetting of consumer expectations of the product price point.

Explore redistribution through wholesale or third-party sellers, either in existing markets or through online platforms.

  • Yellow Octopus (UK) Yellow Octopus are a one stop shop for retailers and ecommerce platforms looking to get the best return on their stock. They have a global network of secondary markets ensuring that the brand is protected. None of the products they process go to landfill. reGAIN app & Reflaunt also sit under the Yellow Octopus umbrella.
  • Reskinned (UK) support both stock redistribution as well as white label recommerce platforms.
  • Reflaunt (UK) has a global network of leading second-hand marketplaces and technology enabling instant and simultaneous listing of items across multiple channels.
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Credit: Fashion for Good

Reworking products addresses excess stock in the immediate term and can be incorporated into future seasons.

Recommerce on the other hand, addresses disruption to the supply chain as production is paused and stock for upcoming seasons may fall short.

Re-work:

Frankie Collective, Beyond Retro and Atelier & Repairs — rework garments into new collections. The latter two also have facilities or networks in India and Vietnam.

Re-Sell:

Trove, Thredup and The Renewal Workshop continue to scale production and can work with brands from design through to the production stage. During the lockdown period, consumers have shown their appetite for recommerce as platforms such as those listed here, are doing well;

Rent:

GIBBON, RE-NT, and StyleLend or similar platforms rent garments to consumers. They simultaneously allow brands to gather data and consumer insights for future exploration in this space. Alternatively, innovators such as Lizee can support brands launching their own rental platforms.

An alternative solution is to hold on to stock for future seasons. This depends of course on capabilities for storage as well as the seasonality of products; it’s likely easier to implement for basics or never out of stock items.

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Credit: Presstigieux

Finally, if none of the above options are viable, recycling or down-cycling products can be explored. Mechanical recycling is currently the most developed solution available, but the feedstock requirements are still fairly narrow, favouring predominantly pure cotton and wool as this produces a much higher yield and is thus commercially viable. Other material compositions that are not currently mechanically recycled into fibres for garments will most likely be either converted into energy or downcycled into inferior quality fibres and lower-value products, such as shoddy or insulation filling. There may be some opportunity for brands to retrieve a small amount overstock value here.

In the near-term, as chemical recyclers are refining and optimising their processes, brands can support the scaling of these technologies by testing and validating small amounts of their output thereby allowing an innovator to demonstrate what might be achievable at scale. In the longer term, committing to offtake over a sustained period is essential. Traditionally, investors support scaling through capital investment but brands too, through their venture arms, can play an important role here.

Overstock is not just an issue brought about through the COVID-19 crisis; this is chronic problem within the industry. The crisis gifts brands with the opportunity to re-examine the importance and utilisation of resources. Innovation in the field of predictive manufacturing, sorting and recycling should help to ensure resources are used more efficiently and effectively, ensuring a robust, sustainable business model for the future. Producing less with more recycled content and on a more predictive/just-in-time manner potentially places brands in a better financial position should they encounter another crisis in times to come.

*based on points identified by The Business of Fashion

In part three of this series, we will dive into the remaining key area; Digital Acceleration.

This article was made possible through the research and contributions from:

Georgia Parker — Innovation Manager at Fashion for Good

Emily Franklin — Innovation Associate at Fashion for Good

Jana van den Bergen — Innovation Analyst at Fashion for Good

Fashion for Good

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