Episode 17: How to navigate Black Friday sales when you are a sustainable brand
TOPICS:
Black Friday, Sustainability, Consumption, Circular Economy, sustainable brands, Greta Thunberg
EPISODE TRANSCRIPT:
Welcome to the Fashion Unearthed podcast. If you need help navigating the fashion industry sustainably, you have come to the right place. I'm your host Belinda Humphrey and my hope is to simplify the fashion industry so that businesses can make the best decisions for people, planet and product.
Hello, and welcome to episode 17 of the Fashion Unearthed podcast. Today's topic is known for some of the biggest sales dollar days and I want to do a bit deeper into how to navigate it as a sustainable business. But a quick reminder that if you're into the latest developments within fashion and sustainability, I send out a monthly newsletter, which you can sign up to on the website belindahumphrey.com.
So onto today's topic, Black Friday, what is it? Where does it come from? Well, it's come from America, it's the Friday following Thanksgiving Day in the United States and it marks the start of the Christmas season. So there's a few reasons for the name, the most popular one being that it's said to represent a company's revenue moving out of the red and into the black or profit. This year, it will fall on Friday, November 26 so this Friday, by the time this podcast comes out, and then it's backed up with what's called Cyber Monday on the following Monday, which is said to have started when online shopping wasn't as big as it is now. But online shopping is big now and we have so many sale periods, spend and saves, end of financial year offers , do we really need to adopt another one?
A lot of articles I searched for were from a customer's point of view, how to prepare, why you should be shopping, what kind of discount you'd expect. Starting out in the industry 20 years ago, you learnt that sales were just part of it. There might have been fewer, but it was never questioned when there were sales. But as time has gone on, and like a lot of people in the industry i've been questioning everything. Is it really about looking after the customer and giving them a good deal in the lead up to Christmas? Or is it another way retailers can get rid of a stock problem? If a retailer clears the stock and does amazing sales dollars? Does it keep or validate the whole fashion cycle? What is it saying about the fashion system as a whole?
Which leads me to the elephant in the room, the thing no business owner really wants to talk about and it's that too much is produced. Resale, better material choices, recycling, they're all great things, but they won't fix the larger problem of simply making too much stuff. And some of you might know this if you're in the fashion industry or been in it a long time, but for those of you who haven't, and you're new to this game, so to speak, it's even part of a business to have a markdown budget. To future plan lost sales dollars from stock that doesn't sell a full price, and is either permanently marked down or discounted temporarily for sales.
We don't have time to discuss factory outlets or DFO but they existed well before the pandemic, a place retailers can send sales stock to, to make room in the store for new stock. Because that's what the cycle says you bring in more stuff you constantly move it through and having stock problems is kind of just part of it. There's even been cases where stock has been produced or product lines created for DFO's or outlet stores.
Now I get it that as much as planners, buyers, business owners try to predict what the customer wants, this can happen up to 12 months out so realistically you aren't going to get 100% accuracy. I might get in trouble for this from the planners out there but it's not really planning it's speculation. In reality, it's just looking at what you sold last year, thinking about your budgets and breaking those back down into categories, then items based on what you think the customer will buy. It's a plan often to execute a level of sales dollar and profit growth. Unless you're doing a pre sale there are no guarantees.
The reason there is a markdown budget is the current fashion system needs it. A recent study by the Australian Government which I can link to in the show notes revealed that Australia is the second highest consumer of textiles per person in the world after the United States of America. The study states that each Australian consumes an average of 27 kilograms of new clothing per year and disposes an average of 23 kilograms of clothing to landfill each year, or 93% of the textile waste we generate.
So all that being said, there are two things I want to talk about next. The first one being if or how you will participate in a Black Friday sale and the second being the opportunity to evolve.
So if you choose to plan in sales for Black Friday, or Cyber Monday, make it part of an overall strategy and make sure the message aligns with your brand. I get it the pandemic might have been a real wake up call to how you're doing business but you still have inventory. So with the thought that you're here because you're a business owner who wants to do better, I want to give a couple of examples of brands that have leveraged the awareness around the day, but tailored it to their brand, their values and their goals.
The one that immediately comes to mind is one that Patagonia did in 2011 with a New York Times ad carrying the phrase, "Don't buy this jacket". And last year, they launched "buy less demand more" launching a Circular Economy Initiative. I think this is really clever because if someone needs to buy a jacket, it steers them into buying one at a company that helps to make it last longer.
Another one is Allbirds, who opted for Green Friday instead of Black Friday, and called for consumers to "break tradition, not the planet". Instead of slashing prices, they raised them and doubled its commitment to sustainability. On Black Friday last year, they increased all their prices by one pound, and the company matched those pounds when something was sold. All proceeds went to Friday's for future the climate movement funded by Greta Thunberg.
And finally the third retailer I wanted to mention is public fibre, a sustainable London based fashion and lifestyle brand launched a campaign last year called "Buy more rubbish". They essentially "sold" in inverted commas as they didn't actually send the items, but they sold the top 10 polluters, food wrappers, plastic bottles, plastic bags, plastic cutlery, straws, glass bottles, aluminium cans, four pack plastic rings, tyres and face masks from Black Friday to Cyber Monday. And they gave all the proceeds to the ocean cleanup.
So the second thing I want to talk about is where to go from here. Whether it's Black Friday or other sales with the goal of getting rid of stock, it still points to the problem of overproduction. But with problems come opportunities. There has been somewhat of a mindset shift or remembering or awakening of designers who don't want to participate in sales the way they did before the pandemic. There are lots of smaller brands that are already reimagining their supply chain, product processes and materials, but there are a couple of interviews I listened to recently with owners of global businesses that I found really interesting.
The first one was an interview Karen Walker did with the Business of Fashion. When talking about the effect the pandemic had on her business. She likens it as a chance to look at it like a porthole a chance to examine what to leave behind. She says "what we left behind us as we step through the portal was everything that disconnects us from our community and the middlemen, the calendar dictating to you the automatic stuff like it's February, you've got to put in this and it's June, you've got to go on sale. All that nonsense that we've all known in the fashion business is kind of vile".
When asked how her stores will look different, she says that "we're not about seasons. It's not like, oh, here's a new big drop and here's sales signage, we'll never have sales signage, you'll never see a sale sign in our store ever again. There might be like a 24 hour 48 hour thing on the website. That's it. There's no like racks of clothes coming in while another rack has got the red pen out. It's not summer, winter, spring, autumn, there's just things that you want to buy right now. It's making a lot less developing a lot less product and only developing really kind of essential uniform pieces".
Eileen Fisher was another person I was interested to hear that even she had been sucked into the traditional stock cycle of regular deliveries and markdowns. In a recent podcast interview with Vogue Business, she said that she's stopping the Mad markdown schedule and getting better sell throughs. In fact, they're doubling. She explains that she's done this by re-examining how they deliver the product and break down their range assortment. I think this is a great example that shows when you think about what you're doing, the process and why you're doing it and really analyse it, you can make change that serves your business values your customer and your bottom line.
With the research I did for the recent episodes on the podcast on the triple bottom line and B Corp Certifications I think businesses are realising that they can get profit by still considering people and planet and being clever and innovative with their business model. Questioning how they can be better. Not every dollar has to come from a new item of clothing. And backing that up was the recent statement from the British Fashion Council CEO Caroline Rush, telling brands that they should cut the production of new clothes by half and pivot to making money by offering clothing rentals, repairs and upcycling services in store.
I think this is great, because it acknowledges that the responsibility doesn't solely lie on the individual purchasing. Yes, there is a piece around the customer understanding what they're buying and buying less but businesses need to be accountable for what and how they produce at the start of the whole cycle.
So just some final thoughts to leave you with in the lead up to Black Friday as a business owner, whether you're participating or not. Firstly, don't rely on sales or a mark down as a lever to constantly get rid of stock. Analyse why your stock hasn't sold. Think about what you need to change in your processes or systems to not have that stock in the first place.
Secondly, what can you change in your supply chain or business model to better service your customer and think about what happens to your items once your customer no longer wants them. Start thinking creatively and out of the box. What would you do if government brought in legislation stopping any sales? Or what if they regulated them to one time in the year or put limits on the amount of new stock businesses could produce?
And finally, if this is a day you will participate in make it intentional, meaningful and truly valuable for your customer. Make sure your offer, the way you're marketing, everything aligns with your business values and purpose.
So that's it for today, I hope I haven't rambled too much. I found this topic particularly tricky to navigate, and there were so many tangents I could have gone off on, but I hope I've framed it in a way that's helpful to you as a business owner.
I'd love to hear any of your thoughts on Black Friday, whether you're participating or not, you can DM me on Instagram @belindahumphrey_, or send me an email at info@belindahumphrey.com. and if you're interested in the latest developments in fashion and sustainability, be sure to sign up to my monthly newsletter by heading to belindahumphrey.com. and finally, as always, you'll find the show notes and any links on the website to in the podcast section. Thanks so much for listening. See you next time.
Thanks for listening to the Fashion Unearthed podcast. If you want to get in touch head over to belindahumphrey.com or you can find me on Instagram @belindahumphrey_
Disclaimer: Whilst every effort is made to ensure that information is accurate at the time of recording, much like the fashion industry itself, this information may change.