It is common knowledge that the COVID-19 pandemic is upending the fashion industry. From a 27-30% global revenue contraction to mass amounts of employees being furloughed, the fashion industry has taken a serious hit. So what are sustainable fashion companies doing to stay afloat? It would be natural to think that one of the first things to go in a time like this are their sustainable and ethical practices that are more expensive than their alternatives. Examples of this may be producing at manufacturing facilities that don’t enforce fair wages, benefits for workers, and other ethical practices or perhaps switching from organic cotton to regular cotton to cut costs and save money during this financial crisis. Anything to avoid bankruptcy, right? Looking at a few different companies that employ sustainable and ethical practices, their experience took a different turn and the reasons might surprise you.
1 | Radical transparency means having your entire supply chain on speed dial
In this global crisis, we are seeing radical transparency actually pay off as an advantage. KOTN is a certified B-Corp clothing brand based out of Canada whose charitable initiatives include building schools for its cotton farmers’ children in Egypt. Investing into the relationships with suppliers throughout their supply chain have paid off in this pandemic. Co-founder and Chief Brand Officer Mackenzie Yeates told Business of Fashion that “Having a completely transparent supply chain and the ability to contact every single person in our supply chain within 24 hours of [the news] breaking meant we had no ambiguity, no uncertainty.”
Boston Consulting Group (BCG), the Sustainable Apparel Coalition (SAC) and technology company Higg Co released a public report that details how businesses can establish resilience during and after the pandemic. In this report one of the four phases they recommend is to “Protect critical assets to survive the economic crisis: Fashion companies must safeguard workers, employees, capital, value chain partnerships, channels and the trust and support of their customers. This moment is an opportunity to remove unnecessary complexity and costs, in order to prepare for reinvestment.” In short, step 1 in staying afloat as a fashion company during pandemic? Establish transparency. Those who already have transparency in their supply chain have some sense of security for the post-pandemic fashion industry.
2 | Sustainability means working with what you have
Having a fully transparent supply chain that enables quick and clear communication doesn’t protect a business from being affected by COVID-19 travel bans. Several businesses have had to do some quick creative thinking on new ways to engage customers and reallocate their resources during this pandemic. Emily Jaime, founder of YIREH, an ethical brand manufactured in Indonesia, advises to get creative! “My advice would be to get creative with the products or raw resources you have on hand! For example we used our remnant fabric to make face masks! So it’s fabric we had leftover that wasn’t big enough to make a dress or full style but that we could repurpose still for something else!” Like many of us, YIREH saw the need for PPE, and reallocated their deadstock fabric to make stylish face masks that match with all of their already made styles. This action not only decreased waste of leftover fabric, but also continued employment of some of the workers at their factory in Indonesia. So pivoting in a pandemic doesn’t have to be complex, start with the raw resources you already have right in front of you and get creative with how you can use it.
3 | Purpose driven values build brand loyalty
The majority of established fashion brands are very profit oriented only, and in it for the short-term gains. This kind of business model does not hold up in a time of crisis however. As states in the Levi’s case-study on purpose vs profit trade-offs, “Those who lack strong direct retail channels, rely on weak partners like over-leveraged department stores or have trained their shoppers to buy their products on discounts will struggle to survive” Companies that are more secure during this pandemic are those that have strong customer relationships via their direct-to-consumer channel and companies that don’t rely on low prices to sell inventory. In fast fashion companies there is little brand loyalty and in a time where every consumer is experiencing uncertainty, they are turning to brands they can trust. That is why Brendon Babenzien, CEO of Noah Clothing told Business of Fashion, “Values aren’t being tested, they are being enforced.” Sticking to values during this time shows consumers that they can trust those brands.
4 | Post-pandemic purchasing seeks out standards
It’s being predicted in a study that the post-pandemic consumer is going to be more drawn to companies with strong values, less inclined to over-consume, and will be more conscious of their purchasing practices. Before the pandemic hit, the consumer mindset was already moving in favor of a more sustainable, ethical and transparent fashion industry and now as they make more careful shopping decisions, this value will be strengthened. According to the BCG, SAC and Higg Co study, "Nine out of 10 Generation Z consumers believe companies have a responsibility to address environmental and social issues. By committing to sustainability, we can secure our long-term growth, stay relevant to our customers and establish market-leading differentiation against our competitors," says Kate Heiny, Director Sustainability, Zalando SE. As the global economies are crumbling, consumers' eyes are being opened to business values that are more resilient and sustainable.
5 | Thinking long term pays off
The common thread each of these companies have mentioned as their main advantage was thinking long-term which stabilized them during this pandemic. Everyone has taken a hit, and it's proven helpful to get creative with resources to stay afloat right now. But as everyone looks to the post-crisis future of the fashion industry, these companies that already had a long-term mindset regarding standards and growth have experienced less disruption. Building their companies on long term decision making has allowed them to continue to weather this storm.
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