Show 111 – How Digital Acceleration Is Driving Sustainable Fashion & Beauty
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The latest episode to be produced in partnership with SAP UK, where the topic for discussion was how digital acceleration is helping to drive sustainable fashion and beauty.
- Anne-Christine Polet, SVP Digital Ventures HATCH and STITCH, PVH Europe
- Joanna Jenson, Founder and Chair, Child’s Farm
- Maria Morias, Global Industry Director for Consumer Industries, SAP
- Gemma Carver, Global CX Adviser for retail, SAP
- Kev McFadyen, Brand Director for Berghaus, Pentland Brands
Maria began the conversation by explaining that, within the fashion and beauty industries, she has been seeing a tremendous amount of work over the past couple of years, mainly due to the efforts of organisations looking at sustainability and circular economy such as the Ellen MacArthur Foundation. But more recently, and for very specific use cases for sustainability, there are Think Tanks such as Sephia Group or Circklo, particularly with consumption and production of goods and services, which is a very important sustainability goal that was defined by the UN. So, the fashion industry alone is worth more than 2.5 trillion dollars and seventy-five million people. But across the full life cycle of clothing, we know that the annual footprint is something spectacular, like 3.3bn of CO2. So, something needs to happen with product lifecycle in order to meet the 2030 targets. The extension of product life cycle is rapidly becoming mandatory for brands that aim to compete in a market where consumers are better informed than ever before. And that’s where digitalisation plays a huge role.
Hatch & Stitch
Anne-Christine then introduced the two technology start-ups she is working with at PVH Europe, HATCH and STITCH. She said the main aim of these two groups is to digitise the value chain. When speaking of the value chain, it’s everything that the consumer does not see; how your garment gets created, how it’s sold to different department stores and retailers and how it eventually gets to the consumer. In the traditional process that the industry has run for a very long time, there’s a lot of waste, there’s a lot of rework, there’s inefficiency. She believes that with the right technology and with the right kind of transformation mindset, they can do a lot better. STITCH’s sole aim is to scale 3D garment creation at fashion brands, to really allow brands to start designing digitally and make the process first time right instead of sixth time right; reduced prototypes, reduced samples. Secondly, HATCH are really passionate about digitising wholesale selling, which right now is conducted in showrooms, you need a huge number of samples to actually sell the collection to your retailers. The digital firm also aims to digitise that process completely, whether in showroom or remotely. It really allows brands to reduce that dependency on samples, to increase their efficiency, to reduce their time to market and that creates a lot of opportunities to improve from a sustainability point of view.
Joanna added that the reason the sustainability message is front and centre for Child’s Farm is because they are predominantly a baby and child skin care brand and therefore, she believes that they have a responsibility for looking after the adults of the future and feels extremely strongly that they must, through their own ability to do things, educate the future custodians of the planet. She explained that they launched when her children were very little as a solution for them, they have kept on going in the same vein using PCR and they have now actually moved to a stage where they have got 100% ocean prevented plastic, that’s plastic that has been got from rivers, tributaries, that is bad for the ocean, it’s collected in a community initiative, so really helping people achieve things. Everything they do, from looking at packaging to the ingredients that they use, they look for the impact that that has on the environment and therefore for the business, because they are the leading brand in the UK, they have this fantastic opportunity to encourage consumers to take on board what they are doing in the context of their own lives. Something Child’s Farm do differently as an SME (small to medium enterprise) to the larger businesses is that they don’t greenwash what they are doing. They don’t talk about what they are going to do, they talk about things when they have done them because Joanna sees so often in the press headline grabbing statistics about “we will be doing this”, but we never actually hear about when these big companies have actually done it. She explained how they had to go further afield to get their ocean prevented plastics because the big pharmaceutical and the big consumer companies have taken everything within the European water basin. Whether they’re using it or not is yet to be seen. But for Child’s Farm, it’s so important as they’re working to become a B Corp next year. She added, there is no excuse for any SME not to take this approach and if SMEs are then the lifeblood of the economy and in due course, we see a lot of them being purchased by these larger companies. Your grass roots effect could be hugely impactful.
Gemma explained the three ways brands are embracing the sustainability:
- Conversation – whilst Gemma agreed that virtue signalling should be avoided at all costs, she said that it is a positive thing for brands to be having conversations with their consumers and their suppliers and manufacturers. She said that they are really using digital channels to communicate their intentions, their vision and the hard and fast fact about products, whether it’s on an e-commerce experience or through various digital channels, social media channels and so on. She believes that e-commerce platforms are even becoming more aware of how to organize data and put that data into platforms so that you can, for example, tag information to be able to show how sustainable it is and what the precedence of the product is.
- Reengineering the supply chain – You see small up and coming SME brands actually challenging all these preconceptions, the likes of, say, in footwear, which is hugely wasteful actually in terms of production, brands like, Allbirds really challenging larger brands like Nike. There’s a lot of work going on, for example, a brand that Gemma worked on when she was at Pentland Brands, Kicker’s, just redesigned the way it makes its footwear to design out some of the more inefficient processes. So, you see a lot already happening, both in terms of the way products are designed and then the way the materials are sourced.
- E-commerce – There’s been an absolutely huge increase in online purchasing since COVID-19 came into all of our lives, but with that comes enormous inefficiency. Gemma explained that it is incumbent on all the brands to reduce and to think how to organise the supply chain to be more efficient? A brand that doubles its average basket size per order and sends it in one shipment as opposed to multiple deliveries, can reduce average emissions by 30 percent and reduce shipping costs by 50 percent. She believes that we are at a point now where it actually makes business sense to run sustainably and when we can bring those two things together, that’s why we’re seeing this big move forward. COVID-19 may slow that down somewhat, but if you look at the big fashion platforms like Zalando, Europe’s largest fashion platform, there’s another big global fashion group which runs fashion platforms across South America, Central Europe, Southeast Asia, they’re really putting sustainability at the heart of how they innovate. And when you see that movement at scale, the tanker really is starting to turn.
Maria added that in terms of the greenwashing aspect or thinking that it’s easy to think that corporate is not really doing anything to move the needle, she has been collaborating on a study where she has read the accounts and reports of hundreds of the top Fortune 500 companies. She said she has read hundreds of them from 2018, 2019, looking into the ESG’s, the non-financial metrics of each one of these businesses, what were they reporting on in terms of CO2 emissions, waste management, water consumption and energy consumption, and then ranking them in terms of ESG and then compare what they say their investments using digital transformation. She said that there is definitely a gap there. So, the direction of digital transformation tends to be in some cases related with the ESGs that they report to, but not in all the cases. She explained that all of these big companies are the first ones to say that there is a long way to go. In this particular ranking she was working on a scale from one to 100 and there was no one scoring higher than 70. However, of the ones scoring between 60 and 70, the top three were fashion and beauty – L’Oreal, Inditex and Nike – and what they had in their accounts and reports that proves that it goes beyond greenwashing is the application of money for digital transformation in circular economy business cases, in measuring ESGs, in making their supply chain more transparent. Maria believes that there’s hope that some of the big businesses are heading in the right direction. There’s definitely a leadership coming from Europe on this, when we look at the legislation across the world, Europe is leading the way. There are interesting conversations happening around taxonomy, categorization of products and her hope is really that at some point this means higher taxes for non-sustainable products.
Joanna agreed that that would be absolutely the right thing to do and that is why something like B Corp makes businesses focus on what they’re doing, because it’s more than just sustainability, it’s about people as well and the community within which they work, anything that drives every single member of that group, whether it’s a small or a large business to be conscious. Joanna said that that was the key point here; being completely conscious of where their products that they use come from. She explained that, whilst having a conversation with a group of 14 to 23 year olds about fast fashion, their biggest frustration was that they can only afford to buy cheap fashion, but that comes at a cost and it comes at a human cost. Joanna said that she would love to see fashion houses talking to the young, to understand, from them, what their frustrations are. They want to buy sustainable products, they all buy stuff digitally, they need to be told exactly what a good product is, a virtuous product, if you like, a product that will let them sleep at night versus one which could exploit their workers, using products which are totally unsustainable with the environment. That would be in an amazing initiative to actually bring the youth of Europe together and hear what they have to say.
Gemma added that she thinks that people underestimate young people at their peril now. She told a story of her 11-year-old daughter who wanted to spend some of her birthday money on a fast fashion brand but wanted to know if it was good for the world first. They are being heavily influenced and do everything online, everything digitally. There’s a hard reality that we all have to face into, which is that we may have to consume less, but we still have to run businesses and grow businesses. So how do we square that circle? From Gemma’s vantage point, as someone who’s been in digital for a long time, there’s absolutely a role for digital to play end to end through the whole journey in the supply chain. But really facing into that fact and being forced into it by our children is the biggest step we have to take.
Joanna added that her children buy all their clothes from Depop now, they buy second hand because they are very conscious. They don’t want to be responsible for remanufacturing stuff.
Anne-Christine explained that her passion is digital, so she is a solid believer that digital can play a very large role. But it can be really overwhelming, especially when it’s about digital transformation, because it’s not just about applying technology to a certain business problem, it’s reengineering processes and that means change and humans just don’t necessarily or intrinsically like change. So, driving a digital transformation, whether it’s in garment creation, whether it’s in your supply chain or whether it’s in B2B selling processes, it’s really tough. You really have to focus on both making sure that you have the right technology that creates value immediately, not a two-year implementation where everyone’s just waiting on, ‘when is it going to be great and done’. But you also need to make sure that you have the users along, that you have ambassadors, the people that actually have to work with that technology. They need to be on board, and they need to be upskilled and they need to be retrained. She added that it also goes for C level, these kinds of things need to be on the strategic agenda at all times. It needs to be communicated; a story told. Otherwise, these kinds of transformations don’t succeed. Anne-Christine explained that she thinks that’s why digital has been so slow, because fashion is an old industry, it has traditional ways of working. That digital element to really go at it, for it to become a competitive advantage, for it to really help you on your sustainability goals, it requires that kind of change. So, it really requires a bit of courage and taking the leap to make this something that you can really leverage and bank on.
Gemma agreed. She said that she spent a lot of time in her previous role trying to find a way in, because often it’s not about money, it’s about confidence from C level down and the self-belief. She explained how she has come to dislike the words ‘digital transformation’ and ‘sustainability’ because they feel so massive that everybody already gets on the back foot. Whereas actually, if you go, ‘you know what, we’re just going to find a way to reduce our returns’, something where you can save enormous amounts of money and reduce your carbon footprint by a huge amount or, ‘OK, we’re just going to rework our packaging to make sure that it’s fully recyclable and that will save us a million bottles a year’, something that Gemma did in her last role, and you just pick off these little things and then that builds belief, it’s that incrementality which is very much a digital mindset. Then before you know what you’ve got, you’ve got a program for digital transformation, a sustainable transformation. That’s a technique that she has used in her role as digital innovation director and will do as CXA as well.
Anne-Christine explained that at their start-ups, when they work with customers, they always tell them think big. So they think in that big north star of what you want to achieve, whether it’s your sustainability goals or supply chain reinvention, but start small and tangible because if you don’t show the value within a quarter, for example, then you lose momentum. You have to break it down into these small chunks, otherwise digital transformation is something that just happens on PowerPoint and never in real life.
Joanna added that the other thing to remember is that Rome wasn’t built in a day, you have to have ambition. If your business is not being driven by people who have passion, and passion is one of those things that so often becomes transactional, it has to be right up there in forefront of what people are doing. You’ve got to have this commitment. Joanna works for an SME and explained that she can’t work within a corporate environment because her passions are so great and so immense. She explained that she knows that if she says, ‘right, guys, we need to be a B Corp’, she has people around her that say, ‘yeah, we do need to be a B Corp’ and they will make it happen. She said that Jeremy Clarkson is a great advocate of ‘I will never own an electric car’ and he’s an influencer in that area, your big corporate executives are influencers about how the business transpires and these influencers have to be singing from the same hymn sheet. You can’t ignore the fact that we are a digital economy now, everything that we do has got to be communicated via the electronic wires, but also those messages of encouraging change, it’s raising this level of consciousness and if COVID has not done that to people, then they’ve been asleep. Joanna explained that we live in a global economy now, it means it’s fabulous, but it also can be frightening. So, let’s think what we can all do collectively and individually to make that change. This is the effects of these influencers, finding those right people. She said we always look to people to work with and we do struggle because we want them to have the same passions we have, otherwise it doesn’t feel authentic to us. But these are people and we need to embrace people who have got the ear of our children and our peers, they will say, ‘well, you know, if this film star believes in it, well, actually, maybe this is something I ought to listen to’. But we within ourselves and as a group need to stand on our soapboxes more too and say, ‘this is what we should feel passionate about’ and to some extreme say, ‘well, look, this is the passion of this business. If you don’t resonate with these passions, it’s probably not the business for you’.
Kev then explained that sustainability is incredibly important to them at Pentland Brands. talking about Berghaus specifically, he said it’s the great paradox of the outdoors industry. Clearly, they are all passionate about the outdoors and nature, and yet they are part of this textile industry that’s the second biggest polluter on the planet. So, at Berghaus they approach sustainability in three ways; the first and, according to Kev, most important one, is that they make products that are incredibly durable. So, it’s likely that they will last you for a very long time and hopefully, therefore, you’ll only have to buy a piece of kit once or at least very infrequently, because that garment will withstand everything that you can throw at it. And then just in case, they also offer unlimited repairs on everything that needs to be repaired, which is something they have done since 1966 when they first opened their doors, and that’s now free of charge. The second thing is to look at the impact of the fabrics, materials and components that they use and work to reduce the impact on the planet as much as they possibly can. He added that this is where it can get really quite complicated, the supply chain for the textiles industry is enormously complex, the tracing of a garment’s carbon footprint and the ethics that surround that, all the way through to the origins of raw materials can be very hard. Kev believes that it’s definitely somewhere that digital can play a pivotal role. The third thing is to offset any residual carbon footprint that they create, even with their greatest efforts they’re always going to have some impact on the planet. Therefore, they need to find a way to offset that carbon that they create. He is hoping that they can be a net positive business by 2025 which is something they’re working towards.
In terms of how digital can help power that sustainability, Kev said that there are many, many ways that digital can play a role. He gave two examples that were at opposite ends of the spectrum in terms of complexity. The first, at the simpler end of the spectrum, he said that we can provide fairly simple tools such as CRM programs that allow us to monitor the life cycle of the consumers garment and perhaps make a timely suggestion to ensure that the garment lives for as long as possible, so reproofing a waterproof, for example. The second example, at the other end of the spectrum, is slightly more sophisticated in using newer digital technology such as blockchain, which could be an incredibly powerful way of improving sustainability by improving the visibility of the entire supply chain, enabling us to track raw materials from their point of origin all the way through the manufacturing process. He added that it’s been great to see some early adoption of this in their industry that really needs to accelerate beyond the niche and become part of the mainstream.
Monitoring the supply chain
Kev explained that it’s incredibly challenging to monitor the whole supply chain in terms of sustainability, but it’s a challenge that we need to rise to. He said he finds it helpful to think about the challenge in two ways. The first one is to think about the question, what is sustainability? Or rather, what is a good, sustainable solution to the problem? So sadly, the answer to that is rarely black and white. For example, Kev said that they ship their garments in little clear plastic bags, which is an essential way of protecting a garment on its way from the factory through to the store that is sold in, or direct to you if you buy it on the website, you can now get compostable plastic bags, which sounds great. However, many of those bags will only decompose or compost under very specific conditions and they certainly don’t decompose on the rubbish heap or even in the recycling bin. So, there’s a risk that people think they’re doing the right thing by choosing a compostable plastic bag, but in fact making a bad decision that could have been worse than the original alternative. On top of that, those bags, they’re made from virgin materials, so had to take more from the earth in order to produce them, if you compare that to what might be perceived as the less sustainable option by using a non-compostable bag, but one that is recycled and recyclable, but may have a smaller carbon footprint and it’s removing plastic from the supply chain it would otherwise be going to waste. So, what’s the better choice? Ultimately, the better choice is to remove plastic from the element of the packaging entirely and that’s something they are working on. But we need to be careful not to make the wrong short-term decision because we think we’re doing something that’s a bit more ethical and actually creating a bigger problem, this side. The second part of the challenge is the complexity of the supply chain for an item of technical apparel. For example, breaking down the supply chain into three layers or three tiers, he used the Berghaus Brecon parka as an example. So, at tier one, where the factory makes the jacket itself and then they ship that jacket to the market in which it’s sold in then it’s easy to have full visibility of where that jacket is assembled. He explained that they audit the factories regularly, they work with the owners to make sure that people who work there have high levels of welfare, that they’re fairly paid and they publish all the information on their website, so that’s tier one, it’s really quite straightforward and there’s no excuse for any manufacturer not to do that. When you go to tier two that that layer deeper, you realise that the jacket is assembled from 32 different fabrics, threads, trims, zips and other components, each of which come from a bespoke supplier much of that level they can trace the sustainability of. But it’s harder to trace as you start to get into a more fractious place of different components, and it can be incredibly time consuming and a costly thing to do as well. Then you get into tier three which is thinking about the raw materials that make up a fabric or a component, so think about the farm where the cotton is grown, or the mine where the metal is extracted for the zip, or the refinery that makes the plastic for the toggle. You’re really going deep into the supply chain there and it can get enormously complex. Kev believes that if we can get the digital tools right, it can become far easier to trace the supply chain of a garment all the way from raw materials through to the finished product on the shelf. And that’s what we all need in this industry, because it will improve the efficiency of how we can trace the carbon footprint of a product.
Maria then explained that digital transformation can play a part in sustainability by giving transparency to supply chain. Digital transformation was seen, during many years, as let’s have a website, let’s try and be more friendly for the customer. It took a huge amount of years for companies to put the customer at the centre of the activity. Voice of the customer was not part of discovery meetings fifteen years ago, even ten years ago, she was struggling to see that, it’s quite recent that we were starting to see the ability to bring into meeting discussions, into discovery sessions, the user centred or the customer centric approach. So, transparency of the supply chain, measuring CO2 emissions, for example, which is a metric that most businesses are interested now, it’s a huge step. She said that they don’t really talk, at SAP, about digital transformation anymore, they talk about digital acceleration. Because the level of change management that it’s required, the level of thinking, the level of commitment that is necessary was never seen before. Of course, we look at something like COVID-19 and the lockdown restricting businesses from operating in normal ways, some of these businesses saw this as an opportunity to really bring digital forward and digitalised parts of the business that were not being digitalised before. It’s such a shift in the way you need to think, that then the change management that is required, it’s so huge that you really need to have the quick wins, but you need to embrace the transformation in a very different way from what you’ve done before. She said that hearing Kev is really refreshing because not only does he represent a group of brands that have been doing a tremendous amount of work in terms of manufacturing using sustainable products. But also hearing Kev is so refreshing as he is someone that is really trying to drive this change, someone who is very informed about the variables that come into play. So, she explained that it is really good for SAP to see customers like this that they can have a conversation with and develop opportunities and really assemble technology in a way that addresses a different theme. Because sustainability was not a digital transformation theme 10 years ago, it is now.
Anne-Christine agreed, she said that she is passionate about this and everything about how this industry works, it’s a beautiful industry, but it can do so much better. Take 3D design, for example, if you think of the way that garments get created right now, a designer creates a hand sketch, someone has to interpret that, they create a prototype, a prototype is often shipped across an ocean and usually that prototype is very far from what the original idea was that a designer had in his or her head. So, the current process, it just creates so much waste and time and waiting on each other and that is really what something like 3D solves. It’s designing in 3D from the start, everyone in there, it’s incremental steps so that the moment that you have a garment, you are actually quite confident that when you bring that to a manufacturer, the first time could be right and the interpretation errors are reduced greatly so that the entire chain just speeds up so much more, you don’t have to ship six, seven prototypes across the ocean in order to eventually come to a garment that you think, ‘hey, yeah, this is actually what I wanted in my head’. So, it’s these small things, but they have a huge impact. And again, they have a huge impact because it means designers need to be trained in new ways, everyone in the design community also needs to understand how to work with digital models and in digital workflows. But Anne-Christine believes, and they’re seeing it now at PVH they’re at fifty five percent digital creation for all of their apparel, they are seeing this come through right now. They’re seeing that 3D is much more efficient, it’s faster for them. And also, in communicating designs and design concepts to commercial teams, for example, the feedback is just so much more accurate. And they’re even going as far as selling immediately from a 3D prototype to B2B wholesale department stores without department store buyers even realizing that they’re looking at a 3D garment and not a physical garment. That just meant that they reduced six rounds of prototypes and maybe two rounds of salesman samples that just didn’t have to be produced anymore because you went straight from 3D design to a B2B sales process, to even go as far as imagining all those 3D garments to be on your e-commerce. So, she thinks that if you start thinking in these ways and if brands really, really go for it, there’s just so much potential there.
When asked about her new brand launch, Joanna said that they were lucky with Farmologie, although there were some challenges over COVID with their supply chain, but they were lucky with Farmologie and were very clear they wanted to launch that brand with all of their sustainability goals in mind. From the plastics that they use to the ingredients that they use and the community stories around those ingredients, for example, their oats come from Scandinavia because they can only get the high levels of beta-glucan from that particular location because it’s so harsh there. But they are not only a by-product of the food industry, but they are also run as a community, a co-operative. So, everybody’s getting out of it much more than they would. She explained that they look through all of those ingredients to be sure that their carbon footprint is right, they offset all of their carbon footprint, so not only all the goods delivered to them, but also their ecom and retail deliveries, which they do through tree planting, plus they are also working with a water initiative in Cambodia and moved a logistics partner to one with better credentials. At the top of their agenda is looking for the most sustainable form of transportation that they can use, again, starting with Farmologie and by doing Farmologie first, their much bigger brand, Child’s Farm, will be complete by the end of the year and on the same plastics. Whilst they have been very conscious, Joanna stressed that it’s a lot easier for them because they are a smaller business, they are much more agile. They have started from the very beginning having very clear principles, but they are not where they want to be. She explained that ideally, they don’t even want to be using recycled plastic, but it is the best decision right now. They look at everything from bamboo to mineral oil developed, but you have to look at the entire carbon footprint of that supply chain, from how much energy is used, an alternative potentially could be glass, how much energy is used to blow glass, how much is used to put it on the whole production line. Joanna expressed that the joy about launching with a new brand is they have been able to start from scratch, create these principles which they can now move on to the rest of their brands, which is great, but it takes time. She said that she has got a willing team of people who are absolutely game on for any form of change, for the way they do things, really passionate about what they’re doing. But you are trying to change a decade long perception of how people do things. She believes that COVID has given us all a jolt, everything now being online and no travel. Has it changed the temper of our business? No, not at all. It’s all being done in an environment which is showing that we can do things differently and the whole world has embraced this working from home. She then added that those manufacturing plants, they still keep going and those people are so vitally important, calling them the unsung heroes of COVID. But we can do this and if it needs a short, sharp shock and a horrific global pandemic to make us realise change is possible, why can’t we then just say, ‘right, we don’t need that to happen again for us to realise it’s time to move on’?
Gemma then said she wanted to highlight Kev’s example of unlimited repairs for established businesses who are thinking, ‘oh, my gosh, how do we get our arms around this?’ She explained that the Berghaus example is really instructive because Berghaus has always had a lifetime guarantee and she wanted to urge people who are running brands that have been around a while, to look at what you’ve always done and almost sort things into ‘what we need to change’ and ‘what we’ve been doing that’s sustainable that we should talk about or that we can build on’ and what’s so smart about what Kev’s doing is he’s building on something that’s been in Berghaus’ heritage since day one, and just trying to evolve it. Gemma then explained that she has done a lot of work previously on how we use AI to encourage people to make more purchases in one transaction, that really made a huge difference because (a) they were dispatching things in one go, but (b) they actually saw 15 percent uplift in our in revenue from applying AI, working with small start-ups and it made a real material difference to their commercials, but also to their carbon footprint. This was at a time when all of the brands she was working on, like Speedo, Berghaus and Canterbury, where ecommerce was scaling and of course, then went off the charts following COVID. She advised to be realistic about where you need to change and then be positive and think positively about where you’ve done stuff that could be redefined as a sustainable because it’s good for your brand, good for your message, good for your commercials and gives you that belief and confidence.
Joanna agreed and commended Berghaus on their lifetime guarantee, she explained how important it is for clothes to be well made and last a long time, giving the example of how her children are now wearing clothes that used to be hers. Going back to Gemma’s example of how she managed to cut emissions by 30% and shipping costs by 50% by getting people to buy more in one go, Joanna said that we need to think about that, anyone who’s got an e-commerce platform, if you buy more, it’s much more beneficial for you because we’re still receiving our margin and let’s pass that on to our consumer. So, there’s many more ways we can encourage people to think more about this and this transparency. She believes that people will consciously shop with those brands that they know operate on a much more open way of doing business.
Educating the consumer
Gemma said that brands do have a responsibility to educate their consumers on sustainability. Whilst there’s always a fear with brands that they become too preachy, she said that there is demand from the consumer for more information to understand where their products come from, how they’ve been created and the carbon footprint. Therefore, Gemma believes it would be remiss of brands now to not to try and educate, but it doesn’t have to be done in a preachy way. Another brand that Gemma has worked on, a small Californian sneakers brand called SeaVees, has just produced a totally sustainable range of footwear. She said that they are also, and have been for several years, contributing to One Percent For The Planet, which is quite a big program in the US, it’s a signal and it’s displayed across the whole range, but it’s not put in front of the of the consumer in a really explicit way. But that is a form of education. There’s opportunities through using CRM and customer communications to try and talk to people at the right time in the lifecycle of their product about, if you have a rucksack and they’ve had it for a few years do you need us to take a look at your rucksack and repair it, for example. So, there are different techniques that can be done in a subtle way, using primarily digital channels. Influencers will always have a part to play there and that doesn’t have to be overly teachery in the way that it’s communicated.
Maria believes that it’s the pressure of consumers that is making businesses change. What she sees is that fashion and beauty business started to be more customer centric, displayed this opportunity to look at things we were not seeing before, this voice of the customer being now part of the businesses. So, she’s not sure if it’s the brands informing consumers or if it’s consumers putting the pressure and making businesses change as a result of that, she believes it’s really about the consumers and the fact that they are demanding brands to make business differently. Education can take many shapes and forms. She then gave the example of a company called Eon who are bringing together people from various parts of the eco system; recyclers, fashion brands and also some associations that are doing good work with educating consumers about the circular economy, bringing all of them together, thinking about standards and using technology as a way to create a digital identity for products. So, the new thing here is that it’s using RFID tagging as a thread that can be infused in the fabric of the garment, it can be washed many, many times without losing the details of what that garment is made of. She added that she doesn’t know anyone that would say they don’t want to recycle the garments they produce, but there is an impossibility for recycling if there’s no understanding of what that garment is made of. Traditional ways of tagging garments are not enough, we need technology. RFID tracking is not new, but what is new, with this initiative from Eon is the creation of a standards that everyone in the industry understands so that when it comes to recyclers, they know what that product was made of. Recycling cotton is very different from recycling polyester, and we all know that fabrics are not of one kind only there’s so many blends, so many variations. So, if we want to avoid landfills to continue as a way to get rid of products by the end of the cycle, we need to use technology. So, Maria thinks this is also about information. It’s companies like this, it’s this type of start-up that can help change the industry. Another good example of a big corporate company is Levi’s, what they’ve always done to inform their competitors about what they are doing in order, for example, to reduce water; when they’re washing the jeans, they’ve developed a complete system using laser to create the exact washing they want in the jeans, they’ve invited all of their competitors to see that. So, collaboration is what will make the change. It’s assuming that change management and digital transformation is not happening inside our doors anymore. It’s about this variety of stakeholders that are outside our company. So, the only way to do that is with transparency, but can we hold the power that that brings?
Anne-Christine believes that one of the reasons why in fashion, digital has not accelerated so fast yet, is because it’s a very siloed industry. Brands really take their creative IP and they don’t want to share with others because they think it’s everything that they own. But when it comes to digital, you need collaboration because for digital to be able to succeed, whether you’re talking about 3D design, digital fabrics, digital trends, you need to collaborate. You need factories, mills and brands to all come together. You need standards, standards are important, not just for sustainability, but if you really want to scale digital across the industry, you need everyone to start agreeing, whether it’s baseline data models or an understanding of what everyone wants to have or quality, how you want to digitize your fabrics so that you get the best possible 3D rendered garment. These kinds of things are so crucial. She expressed that she is really hoping that, with the examples that Maria mentioned, we’re starting to see the first pushes into that. At HATCH and STITCH they believe in collaboration, because you cannot solve this industry by yourself. You need to work with other parties in order to drive and push and continue to push for the change that needs to happen.
Kev believes that the entire industry has a responsibility to educate people on sustainability. He said what’s great is that we’re increasingly seeing people, consumers choose to educate themselves. But nonetheless, there’s still an onus on the industry. If they don’t keep educating people to make positive buying decisions, then how can they really expect to see further change? Of course, digital is a critical tool, we’re all as consumers using digital tools and platforms to inform our buying decisions and digital media platforms are more present in our lives than ever, and form a greater part of our media digest, so, he thinks it’s really important. It’s interesting as well, to see mediums that would be traditionally a physical medium such as a museum, now popping up in digital spaces, for example, there is an Instagram page called Fashion for Good, they’re an Amsterdam based museum, but they’ve now created this virtual museum so that anyone in the world can go and look at their materials on what is sustainability in a fashion landscape. The prevalence of those digital experiences is great for the industry and great for the consumer and making more informed choices.
Whilst fast fashion may be driven by the industry in the perspective of some, Maria explained that it is also driven by consumer behaviour. The average consumer buys 60 percent more garments compared to 15 years ago and yet each clothing item is now kept half as long. So, it’s a consumer behaviour that is driving companies to understand that it’s profitable to do fast fashion. 70 percent of young people say they wouldn’t wear an outfit again if it had been on Instagram. So, there is something here in terms of social media behaviour that also is attractive when it comes to buying fast fashion as opposed to spending a little bit more money for a garment that stays for longer. So fast fashion is an industry response that aims to profit from this consumer behaviour because consumers want to consume more and more often. The question that intrigues her is why are consumers willing to buy items that they use less than seven times and, in many cases, only once? So, the industry can change by enabling business models, for example, with renting. And here comes technology again. If the behaviour is, I want to use this garment once then why do I need to own that garment? Why can I not just rent and then give it back or have a possibility for second hand? So, re-commerce, something that was sold once that stays in the chain and then comes back. If we look at supply chains and how things are set up, they are set up for linear thinking. Product is created, product goes across the supply chain, product is sold. Some brands are looking at how can we take that product back for recycling? In most cases it cannot be recycled if you can’t read the tag. Think about re-commerce for luxury products, how do I know if it’s fake? How do I know that’s the real Chanel? You need technology. Maria has been doing a lot of work on this. She has seen many use cases with blockchain, but they tend to all end up with an app for the consumer and she is not convinced. Whist she thinks blockchain could do solve some of this because it could guarantee authenticity, Maria thinks people need to think about any start-up out there doing blockchain, think of an application that can be incorporated with existing technology collaboration. We don’t need another app in our mobile phones to certify authenticity, so, collaboration can do something about that. So, re-commerce and renting need this authenticity use case to be validated. Maria said that she thinks to a certain extent, when it comes to beauty products, you need to own them, but she would be intrigued to see a case where you could have where you get your makeup done or the application of products. But in fashion, with garments, definitely technology can enable re-commerce, renting and recycling use cases. And that will help with the fast fashion issue that we have.
Joanna explained that the trends she sees in beauty are the same principle, it’s new, I’ve got to have it. A new brand launches and people want to be associated with it regardless of the effect of it in their skin. But, with Child’s Farm, for example, they say if this irritates your skin, they’ll refund you in full. Joanna explained that usually if she tries a product and doesn’t get on with it, she’ll donate it to someone else (although not during COVID). She added that there is such a big turnover, particularly in cosmetics, it’s this consumer sort of avarice; if I don’t have it, I’m not in with the fast crowd or the cool crowds. But that’s a problem of youth as well, they feel this pressure to purchase even if they don’t necessarily want it. And that’s something that we could go a long way to alleviate through education.
Gemma said that whist technology is in her DNA, it is also an enabler. What it’s going to come back to are two things, education and the willingness of businesses, whether they’re fast fashion or luxury, to actually put a stake in the ground at that C level and say this stuff matters and we’re going to find a way. Then you can leverage your technology and digital channels and so on to do that. It will be what drives the agenda forward and we’re not going to be able to get away from it, there’s no way around this.
Joanna agreed and brought back what Anne-Christine said about 3D design and how she believed it was so much easier way to purchase. She said she thinks of all the carbon emissions you’re saving by not going to the shopping centre. It needs to be a C level initiative that saying less is more, spend a bit more on stuff which is good quality will suit you and last that you wear it more than once or if you’ve got a special occasion, rent it.
Anne-Christine explained that if you do have all these 3D garments and you still have consumers and kids that want to portray a kind of style on Instagram or TikTok, what if you could just overlay a 3D garment? What if you could sell 3D garments to the kids for two euros? They post it, everyone’s happy and nothing happened to the world. That could be something that you’ll see in the future as 3D also starts to scale with fashion brands.
Cost of digital acceleration
When asked whether digital acceleration has to be expensive, Gemma said there’s two ways to answer that, because, expensive in the short term can often turn out to be cheapest in the long run. That’s the whole principle that underpins the concept of investment. However, it’s difficult for businesses to make large capex investments. But having said that, it is often a question of trying to build confidence and you can start small, think big, but start small, start by doing things. She explained how at Penland Brands they ran a unit called Disruption Lab where they would bring people together from within the organisation, worked with two great consultancies, FutureLabs and Studio Zao to identify what they call opportunity areas, get smart people together, run a Google Sprint type methodology to incubate ideas over a three or four day period. None of that needed money. It just needed smart people in a room working within a particular framework and out of that came some really amazing ideas, so there are ways to move forward when large capex investments are not really on the agenda. It’s just it’s a question of keep moving, keep looking for the value, because at the end of the day, we have to be realistic about the commercials here and the need to grow businesses and make money and be profitable. It is there and it will come, but it still requires that belief to drive it from the top and then the willingness to be very pragmatic about how you keep that going through difficult times. So, it’s not a very black and white answer, but Gemma’s advice was to keep looking for the opportunity.
Anne-Christine added that the costs of digital acceleration also are related to how you’re running the program. If you really think of this long-term thing and you stay in PowerPoint forever and you’re waiting until it’s one hundred percent perfect to actually start implementing, you’re already too late and it probably already cost you too much money. So, it’s really about how you’re doing it and not having this drag out or a start stop initiative, or it’s to switch leadership sponsorship, all these kinds of things really greatly impact the cost elements of digital acceleration. You need to have bite size chunks show value and then continue. And that’s something that that can make it really worthwhile already on the short term.
Opportunities for the future
Maria believes that there’s lots of opportunities for the future of the industry. Some wild cards from her side would include virtual runway shows with avatars, virtual reality in store to unlock brand experiences, but then also a transparent supply chain. She said that her personal dream is enormous taxes on non-sustainable products.
Gemma added that regulation is critical. Government and policy and the role that that has to has to play here, it’s clear that Europe is currently leading the way. But she thinks we definitely need that systemic intervention, but, nobody can be excluded from this movement forward.
Joanna said that if you think about it, beauty is all about skin and so if you could have a virtual doctor who can look at your skin and can tell you your skin type and the products that are going to most suit that, well fantastic. It means you cutting out a lot of waste and achieving some real positivity there because, as a brand that specialises in dry, sensitive and eczema prone skin, mental health around skin is a real issue. You don’t want to be having to spend a fortune to be constantly disappointed. So, let’s create something which allows any skin type to be zapped and to be told what will suit you, the savings from that would be immense.
With all that is happening in the world, the changes that we see around us, even with COVID, Anne-Christie believes that the biggest opportunity or what she really hopes to see is that real mindset shift. It’s not just a shift in consumer behaviour and what their needs are, but it’s also a shift that big industry and especially in fashion. She hopes that this is really changing minds. We need the supply chain to work in a more transparent and sustainable way and digital is one of the ways to achieve it. It’s not just plug-and-play technology in there, it’s reengineering the way we’re working. And that just unlocks so many opportunities as and so many innovations. On the topic of future technology, Bloomberg Quick Take recently shared a video on Twitter from the Commonwealth Scientific and Industrial Research Organization, which is Australia’s National Science Agency, where they’re growing coloured cotton plants.
“Having the cotton plant produce its own colored fiber is a game changer.”— Bloomberg QuickTake (@QuickTake) August 3, 2020
Scientists @CSIRO have discovered a way to grow colored cotton, which could reduce the need for dyeing fabrics in the textile industry– one of the world’s biggest sources of wastewater pic.twitter.com/zA9rB1drxe
Maria explained that here we have our modern minds continually trying to change the way nature works. Whilst it may solve a problem, she said she is not convinced that it does not create other problems. When she thinks about sustainability, she thinks that there is one expert only of it, and its nature. We are the ones disrupting sustainability. And until we design in the way that nature designs, we are not able to solve this. Digital transformation, it’s a way to achieve better results, but it’s important that parallel to this, there is some thinking about biology. How can biologists help us to design better businesses? Most of the answers we’re looking for, for business problems are in nature. So, she doesn’t agree with altering the cotton colour.
Joanna also pointed out, as well, that the Australian cotton industry, a country that has never had native cotton in it, has done nothing but destroy the rural countryside through drought by the diversion of the Murray River. So, when we go back to talking about our supply chain, it means going back right to the very beginning and understanding is that the right place for these goods to come from? If we look to nature, we have to truly look to nature – where do these plants grow naturally? Where is the environment that suits them? And stop trying to impose cash profit led initiatives which have disastrous consequences on our environment and planet.
Mainstream Fashion and Beauty
When asked whether they think sustainable fashion and beauty has finally gone mainstream, Kev said that it absolutely has. But he thinks the level to which it’s being embraced will vary from country to country. There are also some other factors in the mix, such as socio-economic factors, can people afford to buy some of the more sustainable options? But overall, he thinks sustainable fashion is probably now a fair level of mainstream consciousness, but that’s not enough and it’s still got a long way to go and many barriers to overcome. The harsh reality is that all too often sustainability requires a compromise on behalf of the consumer. That might be a higher price. It might be lower quality. It might be that it’s not distributed. It’s not as easy to identify as a sustainable product. So, yes, it’s gone mainstream. But also, there’s much more room for opportunity and certainly no space for complacency.
Joanna believes that the beauty industry has got an awfully long way to go. She sees new brands launching almost every day of the week, and compromise after compromise after compromise. She totally agrees with a form of legislation or regulation when it comes to new beauty products to ensure that the best ingredients, the right sort of ingredients are being used. We have to think of the waste of those ingredients that are used and how the packaging is done to the best of its ability. She thinks that they are woefully far behind in the beauty industry and they need a seismic shift to actually understand that they have a responsibility here and they need to take this extremely seriously. It is most definitely planet before profit right now.
Gemma said that she thinks fashion, certainly in retail, has a long way to go. There’s been commendable efforts over the last few years, but it still feels a bit like where they were 10 years ago when people were talking about the value of having 50:50 gender representation at board level or putting consumers at the centre of how you run businesses. They’re still talking about it, getting their heads around it. They’re good initiatives. But you’re not seeing the consistency and you’re not yet seeing success at scale. So, coming back to what Joanna said at the beginning, there’s possibly still a bit a bit too much virtue signalling and still more to do to actually follow through and deliver. But the first step is the honesty and recognizing that we need to have this vision and stick by our principles.
Anne-Christine explained that with the onset of digitisation in the value chain, combined with shifting consumer behaviours, she is hopeful that it will become mainstream. For sure, we’re not there yet, but with all the external factors that are happening, it’s a necessity to change. So, she is very hopeful that it will become mainstream in the medium to long term.
Maria agreed with the panel. She believes that we’re not there yet, but there’s definitely a momentum that was built. And when we had Greta Thunberg saying to the world, ‘you guys are not doing anything’, from that moment she saw a shift, but we don’t need to continue in activist mode. She believes that what we need more is, think big, start small. Having worked in digital transformation for many years, she knows that’s the principal. She still sees sustainability being treated a little bit with negative information, which definitely may freeze us from action. That’s not what we want. We want people to believe that their small actions can have a big impact, just like a drop in the ocean that creates those waves. That is what we need to see more. So, although she doesn’t think it’s mainstream yet, definitely the activist part of it is there, she thinks there are some loud voices that are being heard. But what about those silent voices that are starting to get ready to put some action in all of this? Those are the ones we need to start seeing more and more and nurture and give the opportunity to come and say what they were doing, how they are doing and how we can all get involved. Lockdown with COVID really gave the opportunity for a lot of people to think about what can I as an individual do with my life? What’s my purpose? Maria does not believe that sustainability is corporate’s responsibility only. It’s a corporate responsibility, but corporate is done by individuals, so it’s an individual responsibility. What can I do to help? What is my little action and what is my focus? So, until the messaging, the mainstream messaging highlights this, we will continue to say there’s a problem, there’s a fire and no one is really grabbing the water.