What can comms. leaders learn from the challenges facing companies in the fashion Industry?
The fashion industry has been under the spotlight recently for all the wrong reasons. The industry is going through a period of rapid change, brands and retailers are increasingly exposed to Environmental, Social and Governance (ESG) issues in their supply chains, resulting in an intensified threat to reputation. Just last summer Boohoo was caught up in allegations around poor working conditions and allegations of paying employees in their supply chain below the minimum wage.
The restrictions imposed on consumer life throughout the COVID pandemic have acted as a rare speed bump on an industry that has otherwise been evolving unabated at a frightening pace. Ipsos Sustainability Monitor (SBM) 2020 data reveals that over half of consumers (55%) are buying less clothing than they were pre-pandemic. With the world on pause we ask what’s next for the fashion industry? How do brands best navigate these issues? How engaged are consumers in these issues? And what can comms leaders, across all industries, learn from the challenges being faced by the fashion industry?
Fast Fashion: a quick overview
Fast Fashion: “Inexpensive clothing produced rapidly by mass-market retailers in response to the latest trends.”
Since the late 90s, globalisation has opened-up Western markets to cheaper labour in the East. Cheaper clothing and ever shortening fashion cycles (including the development of the weekly ‘micro season’) means that clothing production doubled between 2000 and 2014, while the average number of garments purchased by the average Western consumer increased by 60% (McKinsey).
Fast fashion is fuelled by celebrity culture, fads and the 24/7 nature of social media. SBM 2020 data shows that three-quarters of consumers agree that clothing and fashion are becoming cheaper and more throw-away in nature. And while just 14% of consumers say they feel under increased pressure to keep up with the latest trends and fashion, this rises to 24% among the youngest group (18-34 year olds). The fashion industry (and fast fashion in particular) are associated with serious ESG issues, outlined below.
Figure A) ESG issues typically associated with fast fashion (and the wider clothing industry)
- Environmental issues: The fashion industry is considered by the UN Conference on Trade and Development (UNCTAD) to be the second largest polluter in the world, after the oil industry (UN)
- Social issues: Forced/ slave labour, child labour, dangerous working condition… The Clean Clothes campaign reports wages in Eastern markets are typically a fifth of average living wage there. Average working days are 14-16 hours, 7 days per week (Clean Clothes Campaign)
- Governance issues: Overproduction is a massive issue. More than half of fast fashion produced is disposed of in under a year, (McKinsey) with consumers keeping clothing on average half as long as they did 15 years ago
1) Ethical considerations and the impact on purchasing behaviour
ESG issues around fast fashion and the clothing industry have been widely reported. As consumer awareness grows, we might speculate that ethical considerations will come to take on more importance in the minds of consumers. But how much impact do ethical considerations have over clothes purchasing decisions?
When it comes to what actually drives clothes purchase decisions, the more conventional levers such as price style and quality hold the most sway. None-the-less almost a third of consumers say that ethical issues are one of the top 3 factors that influence their decisions over clothes purchases (and 8% say that it is their primary consideration).
In the era of fast fashion it is perhaps surprising that ‘trends’ (keeping up with friends, celebrities, social media and advertising) is the least selected factor influencing clothes purchases. Caveats should be applied (the results are self-reported and people might underplay the amount of influence trends hold on them, the sample is 18+, missing a key demographic target for fast fashion, teenagers). But the result does suggest that fast fashion is concentrated not only in small proportion of the worlds markets (Western markets) but also within a small proportion of the population within those markets. A small number of people are likely to be responsible for a lot of clothes purchases. While 30% of consumers say they buy more clothes than they need, this rises to 42% among those that say ‘trends’ are a top 3 influencing factor, and 55% among those that say that ‘trends’ are the primary influence on their clothes purchases (SBM data 2020).
#1. Know your customer: For 3-in-10 consumers ethical issues are a key decision-making criterion in what clothes they buy. Whether your business is in fashion or elsewhere, there is clear reputational risk in not being aware of, or not fully understanding what motivates and what matters to your customers.
Chart B: Ipsos SBM data 2020: Clothing and fashion purchase decisions
2) Consumer disconnects over ethical issues
What consumers want they don’t necessarily get
Ethical issues play an important secondary role in clothing purchase decision making but what action do consumers think should be taken? Four-in-five consumers agree that brands and retailers should do more to help protect the environment and safeguard workers’ rights within their supply chains, and 77% of consumers say that clothing brands and retailers should provide more information. However, there is a large disconnect between what consumers want and what they get. Just 17% of consumers agree that the fashion industry provides enough information about the environmental and social impacts of the manufacturing of clothes.
Consumer good intentions not necessarily reflected by their actions
When it comes to taking personal action, although 56% of consumers say that if a clothing brand was associated with environmental pollution in its manufacturing process, they would be putting off from buying clothing from that brand, just 28% of consumers have researched brands that provide ethical clothing.
#2. Be transparent: As globalisation has increased the complexity of supply chains in the fashion industry, it’s becoming harder for many brands and retailers to maintain transparency. Whether your business is in fashion or elsewhere, consumers want to be able to make informed decisions, they want to be provided with clear and complete information (and they probably expect you to do at least some (if not all) of the legwork).
Chart C: Ipsos SMB data 2020 & Ipsos Sustainable Fashion Survey 2018 data: The disconnect between consumer good intentions and their actions
3) What's to be done?
Consumers clearly want more ethical accountability from brands and retailers. But by what means do they want this delivered? In 2019 the Environmental Audit Committee (EAC) published its “Fixing Fashion Report” making 18 recommendations to the government to help clean up the industry, including;
- Mandatory environmental targets for fashion retailers with a turnover above £36 million
- More proactive approach to enforcement of the National Minimum Wage with greater resourcing for HMRC’s National Minimum Wage team to increase inspection and detection work
- The Government should publish a publicly accessible list of retailers required to release a modern slavery statement. This should be supported by an appropriate penalty for those companies who fail to report and comply with the Modern Slavery Act
The Ipsos SBM 2020 survey tested what level of consumer support there would be for clothing and fashion brands and retailers that adopted similar commitments through their own volition. Across the 8 statements tested by the SBM survey (see chart D) between 67% and 78% of consumers said that the measures would make them feel more positively about a clothing brand or retailer. Commitments to national minimum wage (43%) and proof of compliance with the Modern Slavery Act (40%) had the most ‘much more’ positive impact. There are notable differences by demographics.
18-34 year olds are much more likely to say that they would be ‘much more’ positive about brands across all of these measures:
- 44% of 18-34 year olds said they would be much more positive about brands that set themselves environmental targets compared to 24% of 55+ year olds
- 44% of 18-34 year olds said they would be much more positive about brands that made commitments to using sustainable materials compared to 28% of 55+ year olds
Women are also much more positive across all of the measures:
- 46% of women felt much more positive about stores that set-up in-store schemes to help customers recycle their old clothes compared to 30% of men
- 40% of women felt much more positive about brands that helped to reduce textile waste compared to 25% of men
Women and millennials with disposable income form a key target audience for the fashion industry. As ethical and ESG considerations climb up the agenda they are likely to hold more influence over brand reputation and consumer purchase behaviours. If your clothing range is targeted at younger consumers and women in particular, then commitments to the environment and the wellbeing of employees in your supply chain is quickly transitioning from a nice-to-have to a necessity.
#3. Collaborate with your customers: There is clear support for measures that help clean up the fashion industry and reputational rewards are available for brands that adopt similar commitments. Whether your business lies in fashion or elsewhere it pays reputationally to align your business’s commitments to those of your customer. Take pride in your commitments and collaborate with your customers.
Chart D: Ipsos SBM data 2020: Impact of brand and retailer ethical commitments
4) Conclusion & Recommendations: An opportunity to build brand reputation
Fashion at its heart is an outlet for self-expression, choice, freedom, communication, it’s a vehicle to bolster confidence, for consumers to feel good about themselves. Exploitation and corporate greed aren’t a great look for brands trying to make their customers feel good about themselves. And there’s evidence that fashion brands are starting to take a long hard look in the mirror.
- Sustainable materials & Slow fashion - H&M offers a new ‘Conscious’ range. To qualify the product must contain at least 50% sustainable materials e.g. organic cotton or recycled polyester. Levi’s ‘Water<Less’ collection uses up to 96% less water in its denim production. Patagonia only uses sustainable materials in their outwear. They champion “slow fashion” by helping customers repair garments and encouraging customers to recycle and buy second hand
- Circular economy – TK Maxx ‘Give Up Clothes for Good’ campaign has recycled 1.6m bags of clothing since 2004. They also have a zero waste to landfill target. M&S ‘Shwopping’ partnership with Oxfam 30million garments swapped and £21million raised for people living in extreme poverty. The circular economy is based on reusing and recycling materials rather than throwing them away
- Codes of conduct – TK Maxx operates a ‘vendor code of conduct,’ committing vendors to use no child or forced labour, protect employee rights on wages, working hours and adhering to health & safety regulations in the workplace
Whether or not we see a return to business as usual on the high street as COVID-19 subsides, consumers are expecting more from businesses and brands, challenging them to perform a social purpose beyond simply turning a profit. This increased scrutiny presents a risk certainly, but with it also a growing opportunity. Ipsos Corporate Reputation Centre has 40 years’ experience in helping global businesses navigate reputational challenges.
1) Know your customer – understand what issues concern them and to what extent it concerns them. How does this impact how they perceive your brand?
2) Transparency & third-party endorsements – good brand reputation is built on trust. Third party endorsements such as the Fair-Trade Foundation and the Impact Report are a means to showing your customers that you care and take their concerns seriously. Avoid shortcuts and greenwashing and practise what you preach.
3) Collaborate & take pride – show consumers that you are on their side, that you want to make life easier and more straight forward for them and that you can help bring clarity, speed and convenience to the purchasing decisions that they care about. Collaborate and work in partnership with customers towards shared goals.