Episode 90: Sustainable Fashion in 2024: Navigating Change and Innovation in the Industry
- Belinda Humphrey Website
- Arket Archive
- Bangladesh wage increase
- Uyghur forced labour act
- Angel Chang podcast interview
- Fashion Unearthed episode 85
- Belinda Humphrey Instagram
- Belinda Humphrey Email
Hello and welcome to episode 90 of the Fashion Unearthed podcast. Happy New Year to everyone. I hope your transition into 2024 was relatively smooth, healthy, happy, conflict-free. I'm technically back in the office, but I'm taking the chance to start 2024 a bit slower, so I'm not doing any client work this week and I'll get started properly next week on some exciting new projects. And, if you've been thinking about working with me, I have opened up some times to book in free discovery calls and I would love to be able to chat to you about your business and all of your dreams you have for 2024 and how I can help you achieve them. So if that is something you're interested in, you can email me info at belindahumphrey.com and we can set up a time for a little virtual coffee or chai or tea.
So, being the start of the new year, it is always the time for a lot of predictions to be happening across many different industries and, in particular, about what the new year holds, and for this episode, I wanted to distill a lot of the things that I've been tracking over 2023 and the previous years and pull them together to give a bit of a broad brushstroke, I guess, on three main areas that I'll see as being, I guess, macro trends or bigger shifts happening in sustainability and the fashion industry this year.
Firstly, I wanted to start by talking about two things that I think will be driving businesses to prioritise these areas, and the first one is legislation. We've all, no doubt, seen the rise of lots of legislation being proposed in Europe and also in America, to make brands and businesses more accountable for their supply chain decisions, and in Australia as well, we have discussions around possible legislation if the fashion industry isn't able to show that they can self-regulate. So, from a cultural perspective, legislation is a huge driver of what is happening at the moment, and there's never been as much talk about this level of legislation within the fashion industry, so it'll be interesting to track it all and see how it unfolds.
The other key influence is the global economy. Obviously, there's a lot of other things that are contributing to the global economy and its uncertainty, particularly the political landscape. But, on a practical point of view, everyone is feeling the pinch globally, whether that's customers or business owners, and everyone is really looking at what needs to be a priority, what they can afford and what's going to be the best return on investment, whether that's a business investing in transparency or credibility, or whether that is a customer investing in an item that has longevity and repairability and a good resale price.
So let's get into the three big shifts, the first one being the expansion of business models to align with the circular economy. So we're talking about things like rental, resale, repair and recycling becoming part of a business model. Like I said, the legislation is forcing a change in businesses and customers are considering value and quality more and more, so we're going to see a lot more businesses trialing and testing diversifying their business models through different initiatives such as resale and rental. Selfridges is one example I wanted to mention here that have been able to quantify the diversification of business model. They've reported that their circular economy arm of their business Reselfridges, which resells, rents and repairs luxury products generated £13 million in revenue in 2022. This is reportedly only 2% of their total income, but this does tie into a larger vision of repositioning themselves to align with customers' new thinking and purchasing practices. Another example is ARKET, which is owned by H&M. They introduced ARKET Archive recently for pre-loved ARKET designs and they're giving customers the opportunity to list their items with them and they either get 100% of the resale price to shop for in ARKET basically a voucher or you can get 70% of the sale price in cash. These two businesses are great examples of businesses on a larger scale figuring out how to diversify their business models.
The second shift I wanted to talk about is the prioritisation of people. We're seeing more and more activism in the name of humanity. The global response to the attacks on Gaza show us that people are willing to mobilise in the name of humanity and drive change through politics. Another example was the recent protests of Bangladesh government workers to increase their wages. This resulted in a 56% increase in minimum monthly wage for workers from $75 a month to $113. Now, it's not as much as they wanted, but it was certainly progress and it happened through the mobilisation of people.
The other area that is really important, or the other piece of legislation that's really a factor in here, is the EU forced labour regulation, which is really going to put pressure on businesses to trace their products and be transparent about what they're doing, and this is going to be more difficult for some brands than others. We're seeing reports come out that a huge amount of apparel using Uyghur forced labour from China in some capacity and it's flooding into the EU. So the fact that the US has already seen a significant reduction in goods from Xinjiang since the Uyghur forced labour prevention acts implementation in June 2022 shows that legislation is needed. So I see all of these little signals or areas that are prioritising respect and dignity and human rights of the people within the supply chain as being influential drivers for businesses to take action. So the shift I see happening is brands trying to work more directly with their manufacturers and raw material suppliers, and a couple of brands that are already doing this are both Farm Rio and Angel Chang, who was interviewed on episode 75 of the podcast. They're both brands that are working directly with manufacturers in their traditional methods to benefit people and their communities by preserving their ancestral knowledge and craftsmanship. An example of a bigger brand doing this was Brunello Cucinelli, who joined forces with Chanel to buy a minority stake in one of its cashmere yarn producers, and I went into this in a little bit more detail in episode 85. But from a strategic business point of view, they're both securing supply of raw materials and traceability, so they're really negating the cost of tracing things down the track to help comply with legislation as well.
The third and final area that I see businesses looking at and trying to integrate more of into their process and structure is technology and AI. Now I'll have a bit more to say on AI a little bit later in later episodes, but in terms of technology, the first thing I saw bubbling away from a tech point of view in 2020, I think, was the use of 3D design. So this is the ability to create 3D designs on the computer and render them in a realistic way to be able to decide whether or not to produce them, or you could use them to present to buyers instead of physical samples. So the waste that is often not talked about is the wastage of samples. Within fashion, you often talk about pre and post-consumer waste, but the wastage of samples and the development process is often not talked about. So if you get two fit samples before booking production, you're doing pretty well, and if this doesn't seem like a lot when you multiply that by how many new styles you design and deliver in a year. The number rises pretty quickly. Then you add things like salesman samples, pre-production samples, shipping samples and you can see it's really an area that can be improved. So the use of 3D design is an area under the umbrella of technology that I see growing.
An area where I see AI being utilized is in trend forecasting, in particular, runway roundups that include or report on popular colors, shapes, etc. They then compile trend reports and this somewhat reduces the reliance on people spending hours trawling through images. From a communication point of view, technology is being used in a way to collate, store and communicate data to customers. So product passports are one area that businesses are integrating to be able to both communicate the product's life cycle to their store, to their customer, and then add to that data and use it to track it so that when it returns to the brand through a reselling program, they have a history of it and it enables an easier verification process. Of course, you first have to have the data and be confident with it being correct before it makes sense to invest in this area. But, like I said, with the rise of legislation and the diversification of business models, I see this being more and more common. Chloe is one example of a brand that has already introduced this into their garments on their care label.
One thing I do want to mention here is the environmental cost of using and storing technology or data or information. We should be keeping in mind that all online activities have an energy cost, and this is particularly important when it comes to NFTs and designing for the metaverse “Radical retail” A report compiled by Nexa Group reported that, on average, minting or producing an NFT consumes 260 kilos of CO2, which equals the monthly footprint of an average European one-person household, and when you compare it to the physical items, that it gets even more tricky. They say that the minting of a digital sneaker produces 35 times more CO2 than producing the physical footwear. Now, of course, we should always be mindful of how people are calculating and comparing those numbers, and there wasn't a reference for where they got that information, but I think we need to keep that energy cost in mind.
So those are the three big shifts that I see as being influential in 2024. The rise of diversification of business models, prioritising of people and the integration of technology and AI. I hope it got you thinking about your own business and what shifts might be applicable to you this year. Now I include a lot more business examples and ways to strategically apply some of these shifts to businesses in my consulting work. So if you are needing an assessment of where you are at and are interested in building a strategy for your business, get in touch and we can have a chat about where you're at and where you want to be. As always, you'll find the show notes and any links for today's episode on the website belindahumphrey.com in the podcast section. Thanks so much for listening, wishing you a happy new year and I'll see you next time.
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.