Updated: 6 days ago
We all know that the fashion industry involves highly sensitive consumer behavior that has many meanings. There are many consumer journeys shared through different channels, and ever-evolving trends influence decision making in many ways, including styles. Running after this ever-changing game is the reality of the fashion business. Now, the effects of COVID-19 have made the process even more difficult and brands need to constantly adjust their offerings to produce products that have a chance to sell.
Why Is The Widely Used Global Business Model Not Working?
It's reasonable to assume that the role of consumer data in generating accurate perceptions and making predictions is perfect for a brand.
In addition to the lack of sufficient data in both offline and online sources regarding the fashion industry, there is also the problem of brands' accessibility to existing data.
The process of converting existing raw data into valuable analytics is expensive and makes this data inaccessible to small and midsize brands that lack the relevant technologies and know-how.
In this article, I want to focus on the costs that the fashion industry, and indeed all of us, pay for inaccurate estimates due to the factors outlined. I want to estimate the quantitative role of data in influencing overproduction. I also plan to compare existing sustainable concepts and their overall capacity to influence sustainability in fashion.
Are there any sustainable initiatives that can change a significant part of fashion for the better? The need for a big change in fashion has been discussed for a long time. But what really needs to be changed to make our industry more sustainable?
Is it circularity? Sustainable production? Or do we need to activate digital fashion to reduce actual consumption?
What do we get if we do all this at 100% capacity? Do you think fashion will be sustainable then? What would be the result of such a change? Is it naive to believe we can achieve this? Also, what else can we do to accelerate overall change?
The well-known, yet shocking fact:
Fashion is responsible for 10% of all carbon dioxide emissions. This makes fashion one of the most polluting industries in the world.
What else can we do to accelerate overall change?
I would like to start by explaining exactly which business model is responsible for this general situation. Many expect the answer here to be "fast fashion".
But I have a different idea.
This is the whole problem of pre-made fashion, where we can find examples of overproduction at any brand level, from small to large, affordable to luxury.
All pre-production brands are listed here. Therefore, I prefer to refer to and refer to this pervasive and global business model, where fashion products are pre-made, for future sales. In fact, with an estimated 100 billion products, we can attribute 95% of all fashion to this bespoke business model.
Exploring the Three Stages of Sustainability
All brands with the same process structure follow three stages. But the speed and frequency of cycles between processes can vary significantly.
At the very beginning of the fashion value chain, a decision is made about what should be produced and where it should be distributed. Let's call this the pre-production phase. The next stages will be the production and the third sales process. In general, the term sustainability can be found in all three phases, but with quite different concepts and approaches.
Let's start with circularity.
The circularity within this current and widely used business model of a pre-made fashion is part of the aftermarket product lifecycle. This means that the circular piece begins when the garment is sold to a consumer.
We need to separate this circularity from other business models such as on-demand manufacturing. In the world of manufactured fashion, circularity only happens when clothing is sold.
The question is, what part of the total amount of clothing produced is sold to the end consumer?
According to the Circular Textile Association of Australia (ACTA), excess inventory is estimated at €210 billion each year, about 30% of total global production. McKinsey reported that this year, excess product value from the Spring/Summer 2020 collections alone is estimated at between €140 billion and €160 billion worldwide. This increases the amount of excess product to almost 50%.
We're talking about more than 30% of unsold fashion items that go to landfill regularly, which is "normal" for the fashion industry, if not a crisis like the current one.
Knowing that fashion generates more than 10% of the world's CO₂ emissions means that 30-50% of production is just to fill the garbage!
Isn't it incredible?
As a result, if we go back to the point of circularity in the current business model, only 50% to 70% of all fashion products produced end up in the hands of buyers and could potentially fall into the circular model. I found it really interesting to read the 2020 fashion report prepared by the Circular Fashion Summit in partnership with PWC.
According to the report;
“Each expert has his own opinion on the subject. But even industry leaders cannot clearly understand and express all these terms in one voice and cannot integrate them into existing processes.”
It has been made very clear that there is no certainty about what the circular economy really is.
Therefore, here I am confident in expressing my thoughts, willing to apply my own way of thinking and reasoning, using available facts to understand everything I have learned by going into the literature and combining information in my own way.
Going further and taking into account the business model of pre-made fashion, the circular economy is about different, specific concepts and ideas that ultimately happen after the sales process. Some are linked to the attractiveness, resale, resale, or even refurbishment, remodeling of product information.
With a long lifetime and traceable future use, we need to remove clothes that were washed incorrectly or damaged in a shorter time than expected due to poor quality from the number of clothes that can be circulated.
There are no concrete figures on how many garments purchased by consumers are then processed in the circular economy, but we can't speak for more than 5-10% for now, which is an overly optimistic range and accounts for about 3-5% of the total fashion produced.
There are great initiatives in this area that include business ideas and technologies that allow to extend the life cycle of a garment.
All these processes of a circular model depend heavily on their digital capabilities to establish end-to-end connections of different products and create digital environments that allow users to find and use this idea in the most efficient way.
Can We See Clothing Sustainably Produced But Not Sold Sustainably?
Now let's go back to the current business model in fashion.
If we say that circularity can only happen after the sale, what is the role of this sustainable concept in the production cycle?
Simply put, we have sustainability in the manufacture of a particular product, given the quality of the garments, the working conditions, the wages of the workers, the chemicals used in the manufacture of the garments and, for example, the different materials and fabrics that can degrade and decompose. These and many other concepts are factors that affect sustainability while producing fashion.
According to Business Research Company, the value of the global ethical fashion market size enriched by almost $6.35 billion in 2019 and is predicted to grow to $8.25 billion by 2023. Considering the overall volume of the $1.8 trillion fashion market – ethical and sustainable The total amount of fashion produced in such a way remains very small. - of course, it costs fashion brands more to think rationally and economically while producing more expensive clothing, and they are already in a lot of trouble to figure out how to solve the situation with the general situation and the changes around COVID'19.
İmaj Kredisi: Shutterstock