When it comes to sustainable labeling, not all types of claims have an equal impact on product performance, according to an executive at Centric Software.
During the “Tracking Sustainability with Technology” panel at Sourcing Journal’s Sustainability Summit, Jade Huang, vice president of Style Sage at Centric Software, shared data from the company’s analysis of more than 8 million fashion products on thousands of e-commerce sites across Germany, the United Kingdom and the United States. Across the board, only 12 percent of merchandise was marked with general sustainability claims, such as “eco,” “recycled” or “vegan leather.” And just 0.5 percent of products held certified claims from groups like Fairtrade or Better Cotton. While they represent a smaller subset of retailers’ assortments, handbags, footwear and apparel with certifications boasted better sell-through rates than those with generic claims or no sustainable messaging, showing certain consumers’ willingness to spend on verified goods.
“For the consumers who believe that certified products that are actually sustainable is really important to their philosophy of life, how they spend their money, how they think about their purchases, how they live their life, if it’s part of their philosophy, they’re willing to pay for that,” said Huang during the session, moderated by Sourcing Journal’s business editor Glenn Taylor.
Huang likened fashion’s current trajectory to the earlier rise of organic food awareness. As consumers became more educated, they began to seek out verification that what they were buying was actually organic, such as USDA certification. In fashion, this understanding is still developing.
“There is a small cohort of customers that are starting to get more educated,” Huang said. “Over time, we’ll reach the masses, like a technology adoption curve. We’re in the beginning—we’re early adopters—and eventually the customers can get to a point where everyone sort of understands and knows and looks for those things.”
Certification comes with higher prices, and just as there are consumers who won’t shell out for organic food at the grocery store, Huang expects there will still be some fashion shoppers who will not pay more for sustainable apparel.
Both general and certified sustainability claims had risen rapidly over the last five years, but the numbers have dropped off this year. Huang suggested this could be partly due to “financial pressures” like inflation, but she is hopeful growth will resume going forward.
Whether from increasingly educated consumers or due diligence regulations, companies are facing growing scrutiny on whether their products are truly sustainable. Rather than sustainability or traceability being a “post-mortem” consideration after the purchase order comes in, Reid Swanson, sales director, North America East at Centric Software, suggested that it should be more “proactive” and an up-front consideration in the planning and development of collections.
Sarah Von Holst, product manager, sustainability at Centric Software, said that fashion firms’ teams are often siloed, but establishing access to shared data supports more informed decision-making. Giving an example of how Centric Software’s product lifecycle management (PLM) solution creates this connection, Von Holst explained that the sourcing team might have insights on a particular supplier’s machinery while the quality team knows how the vendor performs on audits. By combining multiple data sets, a firm gets a full view of their partners’ capabilities.
Centric’s PLM can also integrate with and pull data from platforms like the Higg Index for further visibility on areas such as material impact. “Data isn’t perfect. However, it is a step towards standardization,” said Von Holst. “You can’t just make a gut decision of ‘This is good, this is bad.’”
Technology maturity and adoption is growing to support improved visibility and data sharing, including across platforms. “PLM is just one part of the puzzle,” said Swanson. “There is no silver bullet technologically, so we know that there needs to be integrations, there needs to be more transparency.”