Sustainable fashion and retail circular economy

If you’re a fashion consumer, you’ve probably already seen labels like Zara’s Join Life or H&M’s Conscious.

You may also have read the term 100% Organic Cotton at Mango or EcoAlf T-shirts with the slogan “Because there is no planet b.”

You may even have heard about the Adidas Futurecraft.Footpoint, the new sneakers made with the world’s smallest carbon footprint.

All these little details are part of a worldwide green journey initiated by major textile companies to provide sustainable, eco-friendly and organic products. The retail circular economy, biodiversity and clothing and footwear manufacturing with the most sustainable and ethical organic materials possible are the new milestones supporting the corporate strategies of the big fashion companies.

Sustainability context of the Textile Industry

The fashion industry depends significantly on non-renewable resources such as petroleum to produce synthetic fibers, fertilizers to grow cotton and chemicals to produce dyed fibers and fabrics. The linear system of production is unable to optimize the responsible use of these resources leading to a large carbon footprint throughout the entire production process, and it misses out on much more cost-effective options for recycling and reutilization of materials.

Therefore, the main players in fashion have embraced a retail circular economy system as a new business model, especially if it means a market opportunity of more than half a billion dollars. This represents around 25% of the total market share of this industry, which is approximately two million four hundred billion dollars a year.

This is why, as shown in the latest insight on sustainability published by Modaes, fashion will be sustainable or it won’t be.

Customers demand sustainable, ecological and biodegradable products that they can show and enjoy with a clear conscience. According to a recent report by consultancy Capgemini, 79% of consumers change their purchasing preferences based on criteria of social responsibility, inclusivity or environmental impact. Even more so after the pandemic where 67% of buyers have raised the level of engagement and awareness regarding the shortage of natural resources in their shopping processes.

In addition, IBM Institute for Business Value’s international survey data shows that nine out of ten consumers agree that the pandemic has changed their attitude towards environmental sustainability, so we have a great opportunity to capture the attention of this conscientious and supportive public.

In fact, more than half of those surveyed are willing to pay more for sustainable brands even if it means changing their purchasing practices.

Undoubtedly, the scenario could not be more suitable to implement business strategies based on waste reduction, circular economy and sustainable products that satisfy the demands of this new type of customer and therefore help to improve the retail conversion rate.

What are leading institutions and brands doing to embrace a retail circular economy?

In early 2019, the United Nations Sustainable Fashion Alliance was officially announced as part of the UN Environment Assembly, seeking to stop environmentally and socially damaging practices in the fashion sector. This international alliance aims to transform the data that rank the textile industry as the world’s second largest consumer of water.

In June of the same year, France, the world leader in luxury fashion, introduced a ban on the destruction of unsold textile items from 2023, forcing manufacturers and retailers to donate, reuse or recycle surplus. At one of the last G7 summits, Kering CEO François-Henri Pinault led this new Fashion Pact, driven by Emmanuel Macron, with the endorsement of more than a hundred brands, to reduce the retail industry’s environmental impact. Not long after, the German government continued this global initiative and introduced the Green Button, the world’s first sustainable textile label.

“…the fashion industry has the opportunity to lead a shift towards a more sustainable future. We must be an example of how companies can collaborate and act on the crucial issues of climate change, biodiversity and the protection of the world’s oceans.”

François-Henri Pinault, CEO Kering

This global government activity provides a structural framework for leading brands to implement sustainability and circular economy programs across all of their business processes.

So, we can mention Zara’s decision to commit to use 100% sustainable fabrics by 2025, joining H&M, which already communicated as part of its sustainability plan that they will use 100% recycled or sustainable materials by 2030.

By 2023 Inditex also expects to achieve Zero Waste in its facilities: headquarters, logistics and stores, as well as the 100% elimination of single-use plastics for customers and the recycling of all packaging materials in its supply chain.

“We think and act sustainably in all phases of our business and take ownership of our stakeholders’ expectations. Our fashion is Right to Wear.

Pablo Isla, CEO Inditex

Adidas wants to eliminate virgin polyester by 2024.

99.9% of footwear manufacturing waste was recycled by contract factories or converted to energy by Nike.

LVMH has drawn up the Animal-based Raw Materials Sourcing Charter which specifies the objective that 70% of the leather of the French conglomerate’s brands should be sourced from tanneries certified by the Leather Working Group.

All major textile companies support this new sustainable business model.

From one-off actions to big projects such as WeCare! by Etam, France’s leading lingerie brand, which promotes a corporate social responsibility program based on nine pillars, including transparency, waste reduction, sustainability, biodiversity and the circular economy.

According to Laurent Milchior, co-manager of the Etam Group, at the presentation of the corporate document, the womenswear company has set itself the goal of moving from 40% of its products being ecofriendly by spring 2021 to 80% by 2025.

In addition, as part of its second-hand program, it has designed the “Petit geste, Joli scoutien” action to collect and give a second life to second-hand bras, distributing them free of charge to women in precarious situations.

Likewise, in 2021, Etam launched a collection of 2,500 recycled scarves, made from disused materials, manufactured in France and Tunisia. Two of the group’s other brands (Undiz and La Maison 123) are also doing their part in this circular economy policy with a capsule collection of lingerie made from unsold stock materials and a collection of accessories made from patchworks of denim remnants, respectively.

How can technology help in this ecological transformation to a circular economy?

Sustainable fashion industry evolution is experiencing solid improvements in a very short time in order to establish efficient operational processes throughout its supply chain and satisfy the demands of this new socially responsible customer.

This is a challenging landscape where everyone involved wants to achieve their green market share. After all, textile executives, whether in sustainable firms or not, are always looking to maximize their company’s profitability. This means increasing scalability, adapting almost in real time to market trends, accelerating work processes, achieving greater cost efficiency, improving the shopping experience, identifying new opportunities ahead of competitors and optimizing staff and task scheduling.

Technology is undoubtedly one of the most cost-effective partners in accelerating this process.

Technological solutions capable of developing more efficient and less polluting synthetic fibers, such as those manufactured by the Spanish company Pyratex. Technological tools that facilitate the ecological farming of organic cotton, advanced recycling technologies to recover the greatest amount of polyester in waste clothing or new efficient packaging and processing machines to speed up logistics operations in warehouses, limiting the environmental impact of factories and the number of vehicles needed to deliver goods to different stores.

And the technological transformation towards a retail circular economy doesn’t stop here.

It also reaches the point of sale: the key place where customers want a customized shopping experience that satisfies their needs without obstacles.

Therefore, we can find shopping terminals that generate QRs on the customer’s mobile phone to replace the printed ticket. Also, we find monitoring systems to keep under control the energy consumption reduction goals of the stores or the installation of used clothing collection points to promote the recycling of fibers and fabrics in exchange for discounts on the customer loyalty cards.

Orquest appreciates and supports all environmentally responsible actions undertaken by textile companies. We want to join these sustainable circular economy projects to create a better world: greener, efficient and ethical. That is why we provide these green companies with a free diagnostic analysis to check if their retail stores are efficient and have the right workforce size to maximize performance.

If you want to be part of this sustainable movement, you can request Orquest’s free consulting by filling out the following form.