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How Target is Meeting Customer Demand for Ethical Fashion With Technology

With advancements like AI, machine learning, m-commerce, sewbots and drones, it seems there’s no aspect of the apparel industry that technology hasn’t transformed.

But for all the automation that’s gaining traction throughout the supply chain, one area remains mired in what now feels like the dark ages. Forget tablets and robots, today the most used tools in the quality inspection process are still pen and paper, with an assist from email and spreadsheets.

It’s an inefficient system that undermines vital initiatives like speed to market but what’s worse is it can leave brands and retailers vulnerable to abuses—abuses that can cost time, money and reputation.

“The way that audits are performed are broken in many ways. Retailers and brands aren’t confident that the places that are declared to be the production facilities are the real ones,” said Inspectorio CEO Carlos Moncayo. “[They also can’t know what’s] happening at the moment of the inspection and if it’s been done properly. There’s not really any way to verify how and where it was done and if it was completed according to brands’ and retailers’ standards.”

This opaque system stands in direct opposition to the way in which the industry is evolving.

These days, even investors are taking CSR and sustainability practices into account as they evaluate companies and their risk.

According to Katie Schmitz Eulitt, strategic advisor for stakeholder engagement at the Sustainability Accounting Standards Board, 90 percent of the top 100 asset managers globally evaluate environmental and social governance when making decisions.

And consumers are watching too. Today’s shoppers are likely to be as concerned with fit and fashion as they are with ensuring the companies they buy from are socially responsible.

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According to the 2017 Cone Communications CSR Study, 90 percent of American consumers expect companies to protect and benefit society and the environment. Moreover, 79 percent actively look for goods that are socially and environmentally responsible.

It’s a sentiment that’s ingrained in millennial and Gen Z consumers, especially.

“The younger generation, in particular, is willing to pay for the responsibility factor, because they’re not buying as much stuff in the first place,” NPD Group retail analyst Marshal Cohen told AdWeek. “They want to buy things that are good for the environment and are going to last.”

The firm found these shoppers will spend up to 15 percent more to support ethical fashion.

Irene Quarshie, vice president of product quality and responsible sourcing of Target, is seeing a similar shift in the mindset of her company’s consumers as well.

“Our guests increasingly want to know not only what’s in their products but under what conditions those products were made,” she said.

The retailer is one of a growing number of companies that publicly lists the factories they use, and this year it added tier 2 apparel factories to its disclosure.

To further its transparency goals, Target is also onboarding the Inspectorio technology platform, which will digitize its quality inspection process, enabling better product quality consistency and providing the retailer with more confidence in the inspection results. “The platform gives you real-time access to the production status, a location of a factory and enables you to connect the dots between a vendor and the multiple factories that maybe attached to the vendor,” she said.

Inspectorio is positioned to finally make the manual process obsolete. Using the platform, inspectors can use an app on their phones or mobile devices to capture and relay information from the factory to suppliers, brands and retailer partners. Beyond cutting down on time spent on inspections and remediations, the system verifies elements of the process that can sometimes be questionable.

Through technology like beacons and GPS tracking, Inspectorio can provide peace of mind to partners along the supply chain that the information supplied by factories and inspectors accurately reflects the conditions where products are actually being made. In this way, it promises to greatly reduce the possibility that brands and retailers could be blindsided by issues that make headlines and tarnish reputations.

Target has fostered Inspectorio’s development through the startup tech firm’s participation its inaugural Tech Stars incubator program last year and a pilot program this summer, which produced promising results. The retailer is currently onboarding the Inspectorio platform with 50 vendors, which translates to 100 factories and 10 percent of the company’s product assortment.

Quarshie is looking forward to gaining a broad range of benefits from the relationship.

“We’re going to look at things like productivity, resource optimization and guest/product experience because we want to be able to connect what’s happening in the factories to how our guests engage with our products,” she said. “Milliennials and the generation that’s coming after them, you see a greater sense of interest in country of origin and workers so we believe that this technology will help bridge that gap.”