Every week, The Interline rounds up the most vital talking points from across the fashion technology landscape. We provide our take on what matters, and why. This roundup is also delivered to Interline Insiders by email.
COVID thrusts true labour cost calculations to centre stage.
As if it weren’t cruel enough in its own right, the COVID-19 pandemic has a second sting in its tail for companies (and countries) whose response to it falls short of consumers’ expectations.
Recent headlines here in the UK have, as we’ve analysed in a previous week’s roundup, revealed working practices in factories that appeared to defy localised lockdown orders, with an impact on the brands that were in any way associated with those factories. But data published this week suggests that shoppers are performing similar ethical calculations on a national level, with European consumers turning away from American brands in light of the country’s difficulty containing the virus.
While much of this friction is no doubt stemming from customer-facing choices, such as the decision to open retail stores prematurely in particularly hard-hit areas, the USA is already encountering similar scrutiny to the UK for its in-country manufacturing facilities. Like the Leicester-focused expose in England, the LA Times recently published a look at a Los Angeles garment factory where safeguarding employees from coronavirus appears to have taken a back seat to profitability.
In both of these cases, the problems that plague overseas manufacturing (a lack of visibility and an inability to monitor and enforce compliance) have been shown to be just as prevalent when manufacturing happens at home. And the cause for this is, unfortunately, quite simple to identify: these issues have come about because the core manufacturing model has not been altered – just relocated from one country to another.
It’s tempting to think of in-country manufacturing as an instant solution. Establishing a factory in the UK, Europe, or the USA feels as though it should immediately change things for the better in terms of worker rights, quality, delivery time and other key metrics. But it’s important to remember that those in-country factories need to be price-competitive with overseas competition – something that these two cases suggest is being achieved by cutting corners, ignoring safety standards, paying underneath the living wage, and, yes, running the risk of factory workers being unnecessarily exposed to the pandemic.
In practice, much of that can be hidden from the brand or the retailer commissioning the order – at least until an inspection or undercover investigation rolls in. For their purposes, the final unit price and the factory capacity are what counts, and that’s an understandable position for any commercial enterprise to take. But in an opinion piece published this week, UK retail maven Touker Suleyman argues that both brands and factories have a responsibility to understand and expose the true labour cost of their production – whether it occurs offshore or at home. And as we’ve established, the market seems to agree with him.
This is an opinion The Interline also agrees with, and it’s an area we will cover in greater detail in September, when our focus turns to sustainability. For the time being, though, a piece we published this week provides a good grounding in not just the need for accurate cost calculations, but also the kind of tools that both partners in any manufacturing process will need to adopt for real transparency to be achieved.
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The pandemic’s impact on fashion retail jobs shows no sign of slowing down. This week saw job statistics published for in-store retail workers in the US, with close to 2 million people now unemployed. Officially, 1.1 million of these are temporary lay-offs and furloughed workers, and there are strong indications that when those people – or some of them – return to work, they may find themselves in very different roles.
But this impact is not going to be confined to store associates who are reassigned to be e–commerce order pickers. Similar reductions in headcount and reassignments are being seen at Burberry, Ted Baker, and even ASOS – the latter of which has actually seen sales rise and has been able to repay government support, but which is continuing with a corporate restructuring by relocating or reassigning customer care and support staff in the name of business efficiency.
This mixture of frontline and head office redundancies is also occurring at the same time as a more fundamental shift in brands’ hiring priorities. This week The Interline read an analysis of the most sought-after talent in fashion which revealed that 3D artists, data editors, and virtual showroom designers, among other digitally-focused disciplines, represent the future of hiring.
Every reader of The Interline will now be familiar with remote working – if they hadn’t been already – as designing, sourcing, marketing and other activities have moved online. But these trends certainly suggest that brands and retailers do not see this as a temporary shift.
This places a burden not only on educational establishments, which now need to produce graduates with technical and hybrid skills – see our interviews with the London College of Fashion and AMFI for more – but also on fashion retail talent departments, which are already starting to look outside fashion to acquire core skills from the videogame and film VFX industries.
