While the financial impact of COVID-19 is testing many consumers’ ethical considerations against the pursuit of value over values in their purchasing behaviors, there is still a crucial long game at play when it comes to doubling down on sustainability in retail—particularly apparel.

In fact, the pandemic has also heightened consideration of environmentally conscious consumption. This year’s AlixPartners Consumer Priorities research revealed that consumers who already connect sustainability expectations above health and wellness will place heightened importance on trust, expecting brands to demonstrate accountability for the health and wellness of participants across the value chain, as well as environmental impacts.

Our recent Holiday Shopping Outlook Survey also found that over a third of respondents who would be spending less ahead of Christmas would be doing so because they had learned they could “live with less” during the pandemic; apparel being a clear victim from the pandemic.

The strong signs of heightened environmental consciousness will come as no shock to retailers and brands—these trends had been emerging before the most unexpected of years got underway. However, a renewed vigor on the consumer side ups the ante for demonstrable efforts and results to be delivered by all areas of retail—and quickly.

"The appetite for fast fashion has played a significant role in brands’ efforts to keep their finger on the pulse of ever-oscillating trends amongst Millennials and Gen-Z."
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Sustainability now sits in the shop window

Resolving these challenges may be most testing for the world of apparel, though. The appetite for fast fashion has played a significant role in brands’ efforts to keep their finger on the pulse of ever-oscillating trends amongst Millennials and Gen-Z. Complex supply chains behind the online product listings and in-store rails are also fraught with potential pitfalls, where labor conditions and transparency of fit and proper operations all ladder back to a brand’s shop window, not to mention the materials themselves used to make each item of clothing.

For a sector so reliant on marketing to an audience with the wearable articulation of their individual aspirations, the agility of brands to accelerate their ESG activities and exceed consumer expectations will no doubt shape the winners and losers in years to come.

New brands have emerged with all-encompassing attunement to the consumer mood for a more sustainable apparel industry and are already winning plaudits for their efforts in this area. For example, Rapanui extols the virtues of sustainability throughout the value chain, from its use of natural materials in products to renewable energy powering manufacturing facilities on the Isle of Wight and in India. The brand has created a circular economy too, where products can be returned after wearing for use in new garment production, rewarding consumers with coupon credit for future purchases. Rapanui’s production facilities have also been opened to other businesses to use in real-time for free, under its Teemill platform branding where products are made-to-order only, cutting out the waste of mass production.

Retooling required, as governments look on

Established mass-market brands have significant retooling to undertake, with the eyes of Government and international institutions upon them, as well as those visiting stores and filling baskets online. In China, several factories have been forced to close due to new environmental policies, against a backdrop of 70% of rivers suffering from pollution by the apparel industry in the country.

Meanwhile in France, starting in January 2021, new legislation will make it impossible for manufacturers and retailers to waste any non-food products. President Macron has also recently reminded the apparel industry that it represents more than 8% of carbon emissions and that transformation is imperative to drive this down. The obligation for companies to publish sustainability reports keeps ESG efforts very much in the public eye.

Politically speaking, if buying is now to be viewed as an act of voting, it’s the state of Gen-Z where the ballot observation will be at its most fervent, where a search for meaning in every purchase is intensifying.

So, where to begin? It’s clear that the transformation required will impact the industry throughout the value chain. “Greenwashing” won’t wash any more:

  • Materials: The choice of responsible raw materials will be key, alongside a sustainable culture (organic, limited use of natural resources). The owner of Zara has committed to manufacturing all its collections using sustainable fabrics before 2025. Patagonia also has a hemp clothing selection and Veja is celebrated for its ecological considerations in its footwear.
  • Design: Adaptations to the design process are essential to accommodate changes in raw materials and associated production processes. Better alignment of designs to market trends and consumer preference data will more effectively manage consumer demand, limiting unsold stock.
  • Production: Environmentally and socially sustainable production (knitting, dyeing, cut, and sew) is a critical part of the transformation required in apparel – pollution control, green energy-powered plants, and the setting of and adherence to much higher ESG standards.
  • Supply Chain and Logistics: Re-assessing the method and measurement of transportation will drive down carbon footprints. For example, further consideration of railways for China-to-Europe transportation and greater shifts towards nearshoring as a sourcing strategy. Effective tracking of progress towards broader sustainability targets in the supply chain, whether through blockchain or other methods will greatly enhance brand credibility with hard data to validate consumer communications in this area.
  • Merchandising, Planning and Allocation (MP&A): Efficient MP&A and full-price sell-through is crucial to success in sustainability, producing the right quantity of items, allocating them optimally and significantly reducing the quantity wasted. This has been showcased this year in Alibaba’s opening of its Xunxi Digital Factory, focused on fully customized, demand-driven production.
  • Leveraging the second-hand market: Effective management of the full product lifecycle is an opportunity brands are seizing to extend the life of products through multiple owners. A study from Institut Francais de la Mode reported that 40% of French respondents bought second-hand clothes in 2019, with more than half turning to the online buying and selling community Vinted to make purchases. Vinted now boasts more than 34 million members in 12 countries.

Amid a wave of new lockdowns across Europe and with a seasonal shopping rush unlike any other on the horizon, demonstrating the agility to respond to logistical challenges and significant spikes in online activity will be the immediate task at hand in order to keep the customer experience at a level to lock in loyalty for the future.

But this must not mask the need to keep making headway for the long term. It is only a matter of time until sustainability returns to tracking as a top priority for further growth. The apparel retailers that will win this race will be those that quickly find comfort in initiating and implementing dramatic changes through every fiber of their value chain.

Reappraising the management of demand as a whole—rather than the social and ecological cost of each individual item—is the way ahead; it is now about producing the right product in the right quantities at the right time, minimizing environmental impact at every step.