Rethinking the Fashion Growth Model

Posted on April 23rd, 2022

Fashion and apparel companies have been making a significant push into ESG in recent years, publicizing their sustainability commitments, appointing sustainability officers and marketing products as sustainably made. These moves are admirable and necessary, but most brands are tiptoeing around a simple truth: economic growth today is directly tied to growth in production—and that, by definition, is not sustainable.

Of course, production and consumption go hand in hand. If consumer demand weren’t sufficient to support clothing brands’ profitability, the brands wouldn’t produce as much. In fact, clothing consumption has been rising for a number of years. Between 2000 and 2015, global clothing production per capita doubled, according to the Ellen MacArthur Foundation.

To truly move the sustainability needle, the fashion industry needs growth models that are not directly tied to new production. The simplest, most obvious option available to the industry today is recommerce, or a brand’s ability to monetize the full use of an item through branded trade-in and resale as a channel.

The Need for a New Growth Model

To reach the climate change mitigation goals laid out in the 2015 Paris Accords, McKinsey estimates the fashion industry will need to reduce its GHG emissions by 1.1 billion metric tons of CO2 equivalent by 2030. However, the industry is on a trajectory to instead produce nearly double that amount over the remainder of this decade. Overproduction is just one part of a highly complex problem in the fashion industry, but with the current system, overproduction of items is a feature, not a bug.

In decades past, most apparel labels produced clothing for five or six selling seasons—the calendar seasons, the holiday season and maybe a cruise or resort collection. Today, fast fashion companies produce for 50 “microseasons” a year, launching hundreds or even thousands of new products every single week.

Consumers get a fleeting but undeniable dopamine rush when they buy something new, but then cycle through trendy looks, and quickly discard clothing that has lost its novelty. Fast fashion brands meet this demand by manufacturing an ever-increasing amount of low-quality, low-durability garments that sell at low price points and then reinvest profits to drive more demand. It’s a vicious circle: consumers love new stuff and brands increase production to fulfill that need for newness…and then consumers buy even more.

Original article: https://wwd.com/business-news/business-features/trove-rethinking-fashion-growth-model-1235164658/