The fashion industry is suffering. Brands are collapsing and reported for bankruptcy. So, what does it take to survive these days? Imarit spoke to Dina Lingas, a Denmark based sustainability personality and a consultant at Circular Transition. She believes to survive, a brand must implement these three strategies: diversification, innovation, and sustainability.
Diversification is not necessarily a new thing in business. There are endless options for implementing this specific strategy in a way that fits the company itself. According to Dina, one of the most important diversification efforts in the fashion industry today is going online in the completion of the brick and mortars. Although having a physical store will enable the possibility of random purchases, a company will be more capable of conducting better communication and evaluating direct feedback from the analysis of customer priorities and purchasing behavior through online shopping. Covid-19 is especially an eye-opener as there is a significant increase, about 40%, of first-time customers commencing online purchases.
Diversifying raw material sourcing is equally vital. Petroleum-based materials such as polyester, nylon, and acrylic are the industry favorites as it dominates 66% of the market. However, with the very volatile petroleum prices, it is an especially bad strategy to mostly resource from this type of material. Companies should stand on more legs and incorporate more sustainable fabric such as cellulosic fibers, like flax and lyocell. Another option is to explore the prospect of including locally resourced recycled textiles into the collections. A lesson learned from the pandemic is the global market shut down, and the challenge of imports, created discomfort as it is something the fashion industry is very dependent on. Besides, especially with the upcoming regulation whereas European countries are mandated to have a separate waste stream for textile waste in 2025, it is crucial to be prepared for such changes.
Furthermore, enforcement of innovation in the overall production system ought to be implemented. Today, there is approximately 30% overproduction of clothes because of the miscalculation of supply and demand, which represents both financial and environmental challenges. One way is to consider implementing an on-demand system for which having an online platform, will come in handy. The application of such a strategy will not only reduce financial risk but also result in optimum lean production.
Additionally, companies like H&M and Swedish Stockings have started exploring the ‘Take-Back’ system, a scheme which allows customers to return used clothes to the company in exchange for a discount voucher for the next purchase. This initiation is proven to increase customer loyalty while the company also benefits from practically free product feedback. This can then be used for local recycling, closing the circle.
Pushing for sustainability is Dina’s last strategy for business to survive. In the present, investors are looking more into the company’s sustainability effort as fluctuating prices and resource scarcity make a very risky business. Being proactive with sourcing will win the investment cheques as investors trust the brand is thinking far ahead and is resilient. Besides, customers are more interested in a brand they can identify with and the one who offers transparency of their whole process. People have started to look more into sustainability notably during the pandemic as shown by the exceptional increase of 4500% of internet search for ‘how to live a sustainable life’ in the last 90 days.
As a sustainability expert, Dina Lingas believes these strategies of diversification, innovation, and sustainability act as core elements for a business to survive in the present day as well as in the future. She believes optimizing resources is a way to both contribute to ensuring a planet where we can survive, is increasingly making financial sense. And as an additional benefit, a fashion industry that strengthens biodiversity instead of weakening it will contribute to evading another unfortunate outbreak. After all, a good strategy is the one that is capable of making positive changes.