The Covid-19 pandemic has triggered a shift in awareness of the importance of sustainability and protecting the environment. The much-documented murky waters of canals in Venice became clear – just one case which highlights the industrial impact on the planet which fashion plays a role in.
Some brands have long built sustainability into their DNA – Levi’s is just one example. Michael Kobori was appointed as Vice President of Sustainability in 2001. Four years later, Levi’s became more transparent by publishing the details of all its active suppliers in an unprecedented move. Kobori stated in an interview with Sustainable Nation from 2018 that, “Sustainability is probably number nine or ten in the list of factors that they use to choose [a pair of jeans]. But all other things being equal, sustainability can be a differentiator for the brand.” Levi’s is more interested in what’s right in the long term than short term profit.
As a brand, pursuing sustainable practices has a higher barrier to entry. Not only are materials more expensive, but there is niche knowledge required that may not exist internally. And the pay-off may not be felt immediately, or with much force. Despite the buzz surrounding sustainable products, not all consumers feel that it is worth splurging money on. According to Harvard Business Review, 65% of consumers said they would buy purpose-driven products but only 26% followed through. This forces brands to choose between sacrificing profit and losing customers.
However, sustainable materials are not the only way for brands to achieve sustainability.
This report aims to uncover how brands can champion sustainability by strengthening the supply chain and pivoting buying and merchandising practices. A checklist is included at the end of this report to guide execution of sustainable practices.
Over 12,000 data points were analysed from March to June 2020 in US and UK markets on the following brands – Levi Strauss, Patagonia, Everlane, Polo Ralph Lauren and H&M, to reveal insights from their sustainable assortments.
All data used in this report comes from products retailing online as tracked by Omnilytics, unless otherwise mentioned.
Brands seek cheap sourcing due to margin pressure. Materials are often sourced from overseas, leading to longer lead times. Additionally, the nature of relationships between brands and manufacturers has become increasingly transactional, making the formation of sustainable partnerships challenging.
Sourcing countries should be diversified to include more nearshoring than far abroad. By sourcing locally and within the region, there will be less reliance on fabric imports. The decrease in imports shortens lead times while decreasing carbon footprint. This diversification also prevents disruptions to the sourcing mix in case of any unforeseen events.
For example, brands that sourced materials solely from China were heavily affected earlier this year during the lockdown protocol. Brands with alternative sourcing countries experienced less disruption to deliveries and stock levels. 33% of supply chain leaders have shifted sourcing and manufacturing activities out of China or aim to do so by 2023. Vietnam, India and Mexico are common alternatives as sourcing countries.
Moving sourcing closer to home will provide greater flexibility to react quickly to mid-season shifts in consumer demand while beating competitors to market.
The material that saw the most growth was Better Cotton at close to 800% YoY increase. Pants & Leggings saw the highest category sell-out at 50%.
Organic Cotton and Recycled Materials also saw notable growth, where the assortment count more than doubled. The only material that had a narrower offering in 2020 was Silk which shrank by 13%.
A key difference between Organic Cotton and Better Cotton is that the former refrains from use of synthetic pesticides and chemical fertilisers, whereas the latter reduces the environmental footprint of cotton farming.
Polo Ralph Lauren and Levi’s – members of the Better Cotton Initiative (BCI) – were the main contributors to the Better Cotton assortment. The latest BCI report revealed that Better Cotton represents 19% of global cotton production and is targeted to 30% by the end of the year.
Though the brands analysed have upped their Hemp usage, this hasn’t yet resulted in high SKU counts. Mainly used by Patagonia and Levi’s, Hemp requires approximately 70% less water to cultivate than Cotton while occupying half the space. Additionally, the global demand for Hemp is increasing where the market is forecasted to achieve a 15.8% revenue-based compound annual growth rate from 2020 to 2027.
Efficient exchange of real-time information is vital in demand-driven supply chains. Such information exchange can be fostered through the use of digital tools, boosting agility and flexibility of the supply chain.
A fashion analytics tool like Omnilytics can streamline the flow of information in the business process. Fostering collaboration, virtual lookbooks can be shared across internal teams and manufacturers with ease. The saved products feature bookmarks design inspirations from existing SKUs, allowing the creation of multiple collections. The real-time element reduces miscommunication between parties as changes to saved products are reflected immediately.
Meanwhile, technological advancements in 3D imagery have given rise to 3D prototyping.
Products are designed using 3D imagery, followed by virtual sampling. This completely replaces the need for paper designs and physical sampling, where each sample can be costly and time consuming to produce. The use of 3D prototyping increases speed to market by shortening lead times by up to 50% while administering cost savings of up to 70%.
