Covid-19 put a spotlight on the fashion supply chain’s sustainability shortcomings. But the pandemic can also prove to be the catalyst to move the industry in a more responsible direction.
Recent research from Accenture’s The Dock laid out six recommendations for transforming the post-pandemic fashion supply chain to be more transparent and responsible. At the top of the list is placing sustainability equivalent to financial performance as a strategic driver, including measuring the sustainable ROI across suppliers and retailers.
The report also calls for a shift in how brands work with manufacturers. Accenture asks companies to consider the impact their choices have upstream in the supply chain, such as how poor planning and tight deadlines could lead to subcontracting or overtime for factory workers. Additionally, the research also stresses the importance of collaboration, strategic partnerships and creating common goals for sustainability. Audits also need to be standardized to drive efficiency and visibility.
Finally, to unlock more traceability and sustainability reporting capabilities, companies should update their technology, using tools such as artificial intelligence and predictive analytics to glean more insights from the data they already have.
Accenture’s senior managing director and global head of retail, Jill Standish, spoke to Sourcing Journal about how brands can build a culture of responsibility and develop technology for greater accountability.
SJ: What are consumers’ expectations today about retailers’ responsibilities as they relate to product safety and the workers who make their goods?
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JS: There is a growing demand for retailers to be responsible businesses. In a world where retailers face jury by social media at every moment—and things can change for good or for bad in an instant—a company’s purpose and responsibility is more important than ever. When it comes to responsibility, brands no longer have the luxury of choice around whether to share their corporate values with their consumers’. And the risk is higher when it comes to fashion; this is an industry where the consumer aligns their spending to brands that share their own shifting values and tastes, and reflect them almost immediately on the rack.
In today’s sensitive and transparent world, people’s values are increasingly becoming infused in their shopping habits. Consumers are more environmentally and socially conscious, turning to brands that not only talk about responsibility, but demonstrate it. Our research showed that consumers think retailers also have a responsibility to address wider social issues through their business practices and working conditions. How many retailers can honestly say they’re ready for that level of transparency? In their journey to become responsible businesses, retailers and brands need to act in tune with their values and ensure that their stakeholders—consumers, employees, investors, partners and the planet—are with them every step of the way.
SJ: How can retailers develop a culture that permeates their supply chain and consumer relationships?
JS: Retailers and their supply chain partners will need to rebuild their supply networks to serve a radically different set of circumstances. Now is the time to redesign the clothing supply chain, and transparency and traceability must be the guiding forces. The “restart” driven by the pandemic gives brands and retailers an opportunity to fundamentally reassess their ways of working, and crucially, work alongside manufacturers and suppliers to build sustainable mechanisms into their supply networks in order to transform the industry.
Improving the transparency of the production system could have a singular effect on sustainability, for customers, workforces, shareholders and our planet. This is one of the great challenges in the manufacturing world: how to bring transparency to incredibly complicated systems, and how to use it to drive sustainable and ethical practices. Data-driven ESG (environmental, social and governance) solutions are required to provide information and traceability. The potential benefits are huge, and given the scale of the process, there is a diverse range of opportunities.
Strong partner relationships make or break retailers’ ability to develop the breakthrough business models that embed resilience and drive growth. As such, retailers’ work with partners ultimately informs how well they deliver to investors.
The need for responsibility of course also extends into individual customer relationships. Consumers want retailers to take their privacy and security obligations seriously, especially when it comes to their data. That’s not a new expectation, but in a digitized retail environment increasingly reliant on e-commerce and customer data, it’s a vital consideration.
SJ: How can the industry bring accountability into the equation?
JS: The imperative for responsible retail and accountability is just that—an imperative.
This is an industry that is heavily interdependent, as illustrated by recent challenges. The pandemic has highlighted the phrase “we are all in this together,” which is also the case with retail. Creating meaningful change will require a huge amount of collaboration across strategy, transparency, trust and guidance—but unlike other sectors, many of these companies are already accustomed to working with each other, meaning they are already primed for change. Building back better means utilizing the technology and data we now have available—and even building the ecosystems to share and maximize those insights. From securing sustainable water supplies to evolving shared auditing principles, a resilient supply chain will be essential to future-proofing their business.
SJ: How can retailers harness technology to bolster a culture of accountability?
JS: If we are to forge genuine, systemic change, a broader program of pre-competitive collaboration is required, where different parties agree on transformation and then technology is the enabler to make it happen.
Data-driven, enhanced sourcing protocols have begun to answer that call with improved efficiencies and reduced impact on the environment. The apparel industry produces masses of data, but it is often in impractical, outdated formats that are hard to mine for insights. Creating value means capturing the right data, at the right time, with appropriate controls and measures to ensure its validity, and using technology to unlock opportunities. By combining qualitative assessment with quantitative data capture and analysis, the industry has an opportunity to use this data intelligently and make real progress.
And as we rebuild revenue and re-establish cost basis and margin goals, next-generation product creation, development and sourcing should embed lean, responsible ESG practices and agility from the outset. Programmatic solutions in lead time management, responsible vendor partnerships, onshoring, traceability and land to market ecosystem strategies will help reshape retailers’ product network. Then, AI can help you get to market faster and deploy inventory more efficiently and effectively across all channels.
An excerpt of this interview appears in the Sourcing Summit companion report, R/Evolution. Click here to read more about how the industry can position for post-pandemic success from thought leaders from Lectra, Suuchi, Tommy Bahama, IBM and more.