Here, the minds behind WhichPLM share their thoughts on our industry model post-pandemic, and the role that the conscious consumer will play in developing it.
The worldwide spread of COVID-19 has changed the way we go about our daily lives. What was evolving slowly but steadily pre-pandemic is now accelerating at pace. We are now experiencing a dramatic push toward digitization. In just the first quarter of this year, Nike reported a 75% increase in digital sales. Traditional retailers have little choice but to follow in the steps of others and are scrambling to join the online world.
And the rapid spread of the pandemic has too accelerated the way our customers consume product, as well as what product they consume.
In recent months, how many times can you say you really needed to wear a dress shirt, a blouse, or a suit jacket to a (virtual) meeting? A couple of times, perhaps. With the majority of us working from our own homes, our buying patterns have changed to a more leisurely lifestyle . In an article produced by Lyst (a business specializing in consumer insight) back in June, they reported a significant change in what we are buying, globally: in the UK shoppers were interested in dungarees and sneakers; Canada saw a rise in loafers; and shoppers in France were searching for jogging pieces. It’s obvious that comfort appears to be a major factor with the shift to many working from home. Lyst also revealed that sustainability searches on their platform increased by 75% in 2019, and then another 37% at the beginning of this year.
Put plainly: as consumers, we’ve changed. We’ve made a shift towards buying more environmentally friendly, well-made, quality products designed to last the test of time – and it’s a shift that’s been fast-tracked by COVID-19. And with this shift comes a greater need for understanding what’s involved in the creation of a product. How environmentally friendly are the materials? How was it manufactured? Was it made fairly?
It’s now imperative that retailers rethink their business models – carefully. A report issued by The Fashion Revolution for 2020 displayed an increase in recent transparency in our industry. It disclosed the percentage of companies now publishing their policies in some key areas, with ‘child labour’ up from 85% in 2019 to 91% for 2020; and ‘worker health & safety’ up from 86% to 91% this year as well.
Consumers of all generations want a greener, fairer world. In April 2020, McKinsey surveyed 2,000 UK & German fashion consumers and found that 88% wanted a reduction in pollution. (Consider that today around half a million tons of microfiber – the equivalent of 3 million barrels of oil – is being dumped into the ocean every year.) It also found that 67% of consumers make a purchase based on whether or not it was made with sustainable materials – something that has been historically difficult to really measure (until recently); 65% plan to purchase more durable fashion and 63% really consider a brand’s sustainability reputation before making a purchase.
It’s these last 2 statistics we want to focus on. It takes decades to build a good reputation in this industry and, today, a mere few minutes for it to be destroyed. Already this year we’ve seen billions in value wiped off the share prices as investors shun companies that are not acting correctly, resulting in lowering of a company’s market value.
You only need to read the press to see a long list of well-known fashion companies of all types that are still making the wrong choices when it comes to the broader subject of corporate social responsibility (CSR) and the environment. And when a potential 63% of your consumer base might walk away due to issues with your ethical and environmental practices, it’s not worth the risk. With a large percentage of customers also planning to purchase more durable fashion products, it’s no surprise that many companies are currently moving away from the ‘fast fashion’ model toward a slower quality, ‘made to last’ product model. Consumers will look toward those companies that are making positive strides in a more, environmentally conscious way.
Major vulnerabilities have been unearthed – in particular when it comes to fast-fashion and environmental consciousness. Fast-fashion businesses have come under repeated fire for producing excessive quantities of cheap products. It’s reported that global clothing production actually doubled between 2000 and 2014 …beginning around the same time the term ‘fast-fashion’ was coined.
Recent issues in this sector have commanded that businesses do some serious introspection. We are already hearing of a slowing down in other sectors, and would expect to see fast-fashion’s calendar slowing down as well.
In order to ensure that products are made as ethically and sustainably as possible, companies need the capabilities of PLM and other best-of-breed tools to help design, develop, source and manufacture products sustainably. Beyond product lifecycle management, this can include 3D software, digital dyeing and digital printing technology, and more.
New digital manufacturing methods can also realise greater use of environmental materials, and reduce excess inventory. And investing in real-time supplier collaboration and fair labour rates as part of a new, sustainable business model can update traditional, high-volume supply chains to become real-time demand-driven value chains.
A couple of years ago, the United Nations launched a drive to highlight the negative environmental cost of staying fashionable. Since then, a growing number of companies – including luxury & large volume retailers – have started integrating sustainability principles into their business strategies, designing sustainability into the process from trends, storyboards, development, manufacturing, and all the way to the consumer and beyond. It’s clear that green has at last come of age!
Governments from around the world are listening to the increased concerns and intensity coming from consumers. And as a result, they’re introducing and adapting laws and initiatives to combat the negative effects of fashion’s outdated business models, production methods and over consumption. Globally, some key programs include: the UK’s Modern Slavery Act, passed in 2015 and updated as recently as September this year; the ILO; the UN Alliance; the CEO Agenda 2020 of Switzerland; a French pact bringing together leading players in fashion to tackle climate, biodiversity and oceans; and Transshipment laws in the USA, which are helping to tackle companies that are simply adding labels to a product to avoid paying the correct duties and instead are trying to pass these off as being sourced in that country.
It’s apparent that the fashion sector is indeed waking up to the idea that the industry needs to change. Greenwashing on tenuous grounds will no longer work for fashion businesses as consumers are able to see beyond the marketing spin! So it’s time to collaborate and connect the downstream to upstream innovation.
Today’s consumer wants the full story of how their product was made, which means true transparency across the end-to-end value-chain. Now that technologies like AI and advanced Internet of Things (IoT) are being adopted globally for manufacturing, companies can have access to a new level of real-time transparency and are capable of exploring possible scenarios and responses. Companies now have the ability to quickly adapt based on new demand, reduce inventory by just-in-time manufacturing, improve Bill of Materials (BOM) helping to notify designers and buyers of the impact of certain material choices. Accurate and fair synthetic Bill of Labour (BOL) costing, and use of Internet of Things (IoT) devices to help improved Track and Trace efficiency and quality.
The future digital model of working, driven via PLM will benefit not only the retailer, brand and manufacturer, but also today’s conscious consumer. We won’t go back to the cheap and destructive bulk model of fast-fashion; instead we will use PLM linked together with supporting best-of-breed solution to share data that will help unlock the understanding of fashion’s sustainability goals, and work with a near-real-time demand reduced inventory model.
Products will be ‘made to last’, and to deliver on this goal businesses need to use real-time technologies sharing a common set of master data.