Our regular analysis selects one or more news stories from fashion technology, and presents The Interline‘s take on why they matter to our global brand and retail audience – as well as what they might mean for the longer-term future of fashion. As always, this analysis is also delivered to Interline Insiders by email — and signing up continues to be the best way to get a fresh look at the fashion technology news, completely free, in your inbox.
A fresh reminder of the urgency of controlling climate change, and fashion’s outsize contribution to it
Earlier this week, the long anticipated Climate Change 2023: Synthesis Report was released, based on the Intergovernmental Panel on Climate Change’s (IPCC) previous work, and summarising five years of reports (authored by hundreds of scientists) on fossil fuel emissions, global temperature rises, and climate impact. The full report makes for sobering – if unsurprising – reading, and the important points are well summarised by the WWF:
- Global emissions between 2010 and 2019 were higher than any previous decade in human history, and the actions being taken today to decrease those emissions are not sufficient.
- Nature has absorbed only 54% of human-related carbon dioxide emissions over the past 10 years. 31% is removed by terrestrial ecosystems, including in plants, animals and soils, and the other 23% is taken up by the ocean. This leaves a 46% excess, which represents humanity’s ongoing contribution to a rapidly-worsening crisis.
- Around 3.6 billion people live in geographical and socio-economic positions that are highly vulnerable to the effects of climate change, underscoring the nature of this crisis as both humanitarian and environmental.
- The food system accounts for about a third (23-42%) of global greenhouse gas emissions, and food production is also extremely precarious in its reliance on predictable, stable weather patterns.
- Between 2010 and 2019, the cost of solar energy and lithium-ion batteries (used for energy storage) decreased by a massive 85%, while wind energy costs dropped by 55%, but even the increased uptake of new energy sources and storage infrastructures has not translated into a sufficient decrease in overall emissions.
The new report’s most important update, though, is a crystallisation of the conclusion that progress on climate change has been insufficient to limit warming to “only” 1.5°C, despite the fact that significant progress has occurred at both consumer levels (with increased adoption of electric vehicles) and commercial levels.
In this new report, the IPCC makes a direct warning that: “the choices and actions implemented in this decade will have impacts now and for thousands of years.” And while there’s a long timeline mentioned, the impacts of inaction – or inadequate action – will not be borne exclusively by future generations; there’s a high chance that even millennials born in the 1980s (which describes at least half the team here at The Interline) will experience global temperatures greater than 2 degrees over pre-industrial levels by the time they retire.
To stand any chance of avoiding the worst-case scenario – an “unliveable” future – the report sets a clear and pressing target: worldwide emissions must peak in 2025, and then start to recede as quickly as possible thereafter. That’s less than three years from today to not just reduce carbon emissions, but to pass the tipping point of reversing their upward trend.
So what’s fashion’s part in all of this? At least 4% of the global, cross-industry total. Which may not sound like much – it’s certainly not on the same scale as energy production – but direct carbon emissions are really only part of the industry’s deep environmental footprint.
Everyone’s familiar with being brow-beaten by the idea that fashion pollutes and creates waste in an outsize way, and it’s easy to become desensitised to it. But to give an idea of the scale, consider these recent statistics from the British Council of Fashion: 23 million items that were returned last year in the UK alone were sent to landfill. That’s a lot of clothing for one country to throw away, and that disposal alone accounted for around 750,000 tonnes of CO2 emitted.
And scale really is the issue here. Research shows that over the first decade and a half of this millennium, clothing production continued to increase (doubling between 2000 and 2015), but the number of times an item of clothing is worn before it is thrown away decreased by as much as 36%.
Ours is an industry that has made dramatically too much product by any metric for some time, and while some of the IPCC data predates climate-positive actions that have been taken over the last 5-7 years, it also predates fast fashion’s continued growth. To be blunt about it, ours is not a world that can sustain the most famous fast fashion brands (in their current form) as well as a prosperous future for humankind.
Unfortunately, the data from this report (as well as other noteworthy benchmark’s of fashion’s environmental shadow) show that the industry’s mitigation efforts – as noble as they might be – have failed to keep pace with its continued pursuit of volume and variety as a way to overcome increasingly tight profit margins per product.
And while overproduction is an issue at the consumer end (as evidenced by the amount of clothing we throw away here in the UK alone), the reality is that a lot of fashion’s GHG emissions originate from processing and manufacturing – both of which are engines that continue to run at scale, since they also help fuel the economies of countries like India, which has this week announced the creation of seven new Mega Integrated Textile Regions.
The environmental impact of these facilities obviously isn’t yet known – they could potentially be run entirely on renewable energy, and they could conceivably use digital production methods to cut waste and pollution. But the fact remains that further growing the global fashion industry’s throughput for the creation of new styles is almost exactly what should not be happening if the industry’s emissions are to peak and then start to fall off by 2025. (This sidesteps the clear issue of fashion’s responsibility to support countries where the textile economy is a major economic engine, but this is a topic for another analysis.)
To be clear: a lot of the volume of fashion production is tied to the rise of mass market, affordable fashion, whereas there’s evidence from this week to suggest that luxury groups and smaller brands (both of which produce less by definition) are making greater headway towards reducing their contribution to climate change.
For example, this week Kering announced a “commitment to reduce its absolute greenhouse gas emissions by 40% by 2035, on a 2021 baseline,” across its extended supply chain (covering scopes 1-3). While an admirable goal, we should note, though, that the relative scale and urgency of the problem does not match up with the scale of this proposed solution: a 40% reduction by 2035 is a significant shortfall from a clear, global target to have emissions start to recede a full decade earlier than this commitment.
On the other side of the brand spectrum, smaller companies are trying more radical approaches, such as Allbirds’ new framework for what they describe as the first zero-carbon shoe (which is a framework they’re open-sourcing), although an official release date is uncertain. And smaller brands are also now being welcomed into the fold of the Sustainable Apparel Coalition, with a new membership tier aimed at companies making $100 million or more.
As with the way sustainability is presented to the population at large, though (with individual recycling and EV-driving barely touching the sides of a problem that can be laid primarily at the doorstep of mega-corporations), the net difference that smaller brands can make to the overall picture is relatively minor compared to the footprint of larger organisations.
Fashion, then, is going to need more radical change than even the more extreme solutions trialled so far. The full scope of recycling, circularity, better fabrics, digital processes etc. are, in a global, species-level sense, not cutting it. Realistically the most meaningful intervention is for fashion to make fewer products – something that The Interline is going to dive into next week – and for brands and retailers to start getting incredibly serious about investing in sustainability and quantifying the returns.
The future of the retail: self-servicing and streamlining through technology
Although this next story might feel like stepping away from climate change temporarily, there’s actually a logical through-line from the idea that fashion will likely need to make less product in the near-to-mid-term, and the idea that brands and retailers will distinguish themselves through the quality of those reduced numbers of products, as well as the experience of buying them.
This is supported by new analysis from the Harvard Business Review, published this week, which wraps up a broad, global survey to demonstrate the importance of the more subjective, experiential side of retail. The survey covered more than 6,000 customers in China, the US and France, and concluded that 7 factors have an effect on customer satisfaction: convenience, choice, navigation, payments, ambiance, expertise, and touch-and-feel, with the latter three strongly influencing the satisfaction of the first four, provided they are properly handled. And this goes both ways: when those subjective factors are included, a “good” experience can become “very good” 70% of the time, and their absence can turn a “bad” experience into a “very bad one” 89% of the time.
The research also shows that consumers aged 40 and below find these elements particularly important. And as their buying power is markedly higher than that of the wider population, getting these benefits right or wrong is going to have a major impact on businesses that cater to that peak fashion demographic.
The Interline’s analysis here comes in two parts.
First: in a world where fashion has less variety to sell, creating memorable, frictionless consumer experiences is going to be essential to both acquiring new customers and maximising their lifetime value. Some of the burden for creating experiences that can be parlayed into that easy acquisition and value is going to fall on people and presence (i.e touch and feel, expertise). But the Harvard Business Review research also shows that technology has a role to play in creating this type of engagement, as up to 60% of younger buyers prefer to interact with technology and not a human being when making a purchase, while this is only true for 30% of older customers.
This week saw some concrete steps being taken in this direction, with Zara replacing hard tags with digital chips that can be sewn into garments. This is something that represents a milestone in the feasibility of rolling out digital identifiers at scale and without excessive cost, and something that Zara describes as “deepening the digitalisation of stores” to support precisely the sort of frictionless, cross-channel consumer experience that could come to define the future of retail very soon.
Second: while there’s a consumer-facing element to this, a lot is also happening in optimising the efficiency of retail behind the scenes, in inventory operations and warehousing. IKEA recently announced its usage of 100 automated drones to monitor stock levels – supported by robotic racking that it uses to keep in-demand items in stock.
As these two elements start to converge, and to coincide with fashion’s need to reckon with the scale of its environmental impact (likely by reducing the scale of its production), The Interline expects to see streamlined retail excellence, unlocked through technology, become a defining feature of the most successful brands.
The best from The Interline:
This week we published the latest instalment in The Interline’s podcast series, an exclusive feature from Safir Bellali, and a feature from Liza Amlani and Raj Dhiman of Retail Strategy Group – originally published in our 2022 DPC Report.
Before reading those, though, you might consider signing up for next week’s free webinar, delivered by The Interline and z-emotion, where we’ll be examining how the endpoint of digital product creation is shifting, and how brands can extend the value of their digital assets by seizing new possibilities in eCommerce, videogaming, and the metaverse. Scheduled for 10:30 New York, 15:30 Paris, and 14:30 London on the 29th March, the webinar is free to attend, and will also be made available to registrants on-demand afterwards.
Sponsored by SOURCING at MAGIC, in this month’s podcast The Interline talks to the CEO of The Edit LDN about why technology is underpinning the secondary market for high end streetwear and sneakers – and why circular resale platforms could be a proving ground for fashion’s wider digital transformation.
In his first exclusive for The Interline, Safir Bellali, a passionate thought leader who sits at the intersection of design, technology and education, explored fashion’s digital talent gap, where he argues hybrid talent is in high demand and short supply.
Liza Amlani and Raj Dhiman, of Retail Strategy Group, suggest we ditch the business case, and make the personal case, when it comes to DPC.