The buzzword these days in fashion retailing and manufacturing is sustainability. What are companies doing to reduce their carbon footprint? Who is using recycled materials to shape their fashion lines? What’s the latest in recycled packaging and recycled clothing?
Yet many wonder if customers really care about these climate-saving steps. If they do, will they pay more for them?
A recent survey by London-based Retail Week and Infor, an enterprise resource planning company, tried to answer those questions and more.
Taking the pulse of 1,000 people in the United Kingdom, the extensive survey showed that consumers aged 18 to 24 are more likely to be eco-conscious than people over the age of 65.
Some 55 percent of consumers are more likely to buy from a retailer or brand with a strong ethical and sustainable ethos, but 28 percent said greener measures did not influence their shopping patterns while only 14 percent said they research which retailer is sustainable before shopping.
While shoppers seem to want a lot of sustainability from retailers and brands, many don’t necessarily want to pay a lot more for it. Almost one-quarter said they wouldn’t be willing to slap down more money for sustainable goods while 17 percent noted they would be comfortable with a price hike of no more than 5 percent. Those willing to pay 5 percent to 10 percent more comprised 27 percent of the group. That stands in contrast to a First Insight report saying that two-thirds of surveyed consumers would shell out for sustainable goods.
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Still, consumers want faster change. Of those surveyed, 61 percent believe retailers need to be bolder in their sustainability targets that should be met way before 2030 or 2040, which is a target date listed by many climate change agreements.
Helene Behrenfeldt, Infor’s strategy director for fashion, said retailers and brands need to “start thinking about their ability to ensure sustainable designs that minimize the impact on the planet in terms of materials, processes and production waste.”
She added that these companies need to make goods with a longer product lifecycles and offer services such as refurbishment, resale and rental to reduce waste.
Fixing fast fashion with innovative alternatives
With that in mind, various industry-disruptive companies are entering the longer product lifecycle space. Rent the Runway in the United States and My Wardrobe HQ in Great Britain have done a good job of elevating rental fashions to be more acceptable to shoppers and provide a solution to fast-fashion waste.
Rent the Runway is now listed on the Nasdaq, reporting that annual sales grew 66 percent to $59 million by the end of 2021. One of its advertising messages is that it’s time to break up with fast fashion.
Also popular are platforms including Depop, Vinted, Vestiaire Collective and Poshmark, which are popular in driving sales of preowned and vintage clothing. Last year, Etsy acquired Depop, a peer-to-peer fashion resale website, for $1.6 billion after Depop’s revenue in 2020 totaled $70 million on gross merchandise sales of $650 million.
The rental market emphasizes that consumers want to figure out how to buy less clothing but have a fresh selection of clothing at the same time.
One way to make consumers feel less guilty is to offer a buy-back clothing program that finds a new use for old clothes. Eileen Fisher has been doing this for years with her Renew program, which takes back old Eileen Fisher clothing and finds a new use for them. Or Patagonia has a program where consumers can turn in old Patagonia duds and get credit towards a future purchase. Some companies take old clothing and sell it to companies that turn it into insulation or carpet mats.
Then there are those companies that are adopting a degrowth business strategy. This means they stock less merchandise based on predicted demand to eliminate overproduction. Ralph Lauren Corp. has been working with this concept and has increased profits by understanding its sell-through, the survey said.
Bankers are getting into the sustainability business too. They are providing financing that rewards corporate responsibility. The survey showed that British clothing company Joules updated its funding last year with Barclays Bank that includes a $32.8 million revolving credit facility and an $11.8 million term loan whose interest rates are linked to hitting targets including carbon emissions and employee engagement.
The Top 5, according to consumers
In the Retail Week survey, consumers said their top five most sustainable companies in the industry were H&M, Nike, Primark, Marks & Spencer and Amazon, which seems counterintuitive to some because H&M has been criticized for its fast-fashion model and Amazon eats up a lot of energy by delivering goods and running mammoth warehouses.
Yet, H&M has made an effort to use more sustainable and recycled materials in its clothing and to work with coalitions that are trying to reduce the ecological footprint that fashion is leaving. Also, H&M is working on a clothing-to-clothing recycling model in its home country of Sweden and is offering a clothing buy-back program too.
Nike gets a favorable nod because it is producing more products with at least 20 percent recycled materials in them—a fact predominantly listed on its website. It has been touting its ground-only shipping effort in the United States as well as its program called Nike Refurbished. This idea involves Nike repairing used products and then reselling them at Nike Factory, Nike Unite and Nike Community stores.
Amazon gets high marks for buying electric delivery vans last year and taking a 20 percent stake in the electric automaker Rivian, signaling that the mammoth commerce company is serious about cutting carbon emissions.
Primark is working with Recover to make all of its clothes from recycled or more sustainable inputs by 2030. It also released denim produced in lockstep with the Ellen MacArthur Jeans Redesign guidelines specifying minimums for circularity and sustainability.
The survey emphasizes that retailers looking to be successfully sustainable must measure their existing carbon footprint, understand which areas of the business need improvement, and initiate plans to take meaningful action.
There are three tiers of action that retailers can take to reduce their carbon footprint. First is controlling direct greenhouse gas emissions that occur from their own sources, such as combustion in owned or controlled boilers, furnaces, vehicles or emissions from owned chemical production.
Second is to buy energy from facilities that are reducing their carbon footprint. And third, is working with raw material suppliers and transportation providers who are using sustainable resources and reducing their consumption of goods.