The Future of Fashion: Sustainability and Digitization
By Anjali Barnabas, Daniel Harrich, and Taylor Gonsalez (Analysts 2020–21)
The growth of the fashion industry is expected to slow down in the coming year. In order it to keep up, it must adapt by focusing and acting on two key ideas: 1) digitizing data analytics and focusing on e-commerce to allow for personalized experiences and 2) finding innovative ways to adopt sustainable sourcing and manufacturing practices in line with current consumer demands.
The fashion industry should leverage big data and analytics to manage their supply chains and digitize product development and support functions in order to automate processes and provide personalization to consumers. Because of the pandemic, traffic to the top 100 fashion brands’ owned websites rose by 45% in Europe, and people worldwide now understand the convenience of e-commerce and digital shopping. Thus, digitization can enable new logistics and sales-fulfillment options (such as click-and-collect and drive-through), fuel innovative ways of customer acquisition, and help predict and manage inventory to create a more resilient supply chain. Because 75% of consumers prefer brands to personalize messaging and offers, data analytics will allow for targeted experiences that continue to engage consumers. One Zurich-based startup that has been capitalizing on their digital approach towards fashion is Fashwell. Fashwell, acquired by Apple last year, is taking visual search to new heights, and creating an accessible link between social media fashion and real-life shopping with 100% automatic results. This means better e-commerce user experience, higher engagement rates, and a reported 35% month-on-month growth in usage.
One interesting way the global fashion market is evolving involves a significant shift in attitudes towards sustainability. Whereas before fashion companies were accustomed to doing the bare minimum and earning a “sustainable” sticker to slap on their merchandise without any genuinely eco-friendly policies, this perception is quickly changing. Consumers seem increasingly unwilling to accept a fashion company that merely puts on the pretense of environmental friendliness. This is especially true of younger consumers, whose attitudes towards sustainability shape their consumption habits. According to a KPMG survey, over 67% of 18–24-year-olds supported a more sustainable fashion market. Given that Millennials are projected to dominate aggregate demand by 2033, fashion markets will have to adjust. In addition to millennials’ environmental concerns, government regulation is also cracking down on sustainability efforts, with the French and Indian governments recently passing regulations requiring clothing companies to follow over 100 sustainability provisions. In response to these demands, Ananas Anam, one sustainability-oriented textile startup among many, has taken consumer attitudes and government regulations in stride in creating a natural leather alternative, Piñatex, which is made from waste pineapple leaf fibre. Its manufacturing process creates a biomass byproduct, which is sold back to pineapple farmers as fertilizer, closing the loop of its production cycle.
