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Sustainable Models & Solutions for a Disrupted Fashion Industry

Sustainable Models & Solutions for a Disrupted Fashion Industry

Coming out of the crisis, the apparel brands and retailers that reinvent their end-to-end business models will ultimately be better prepared to quickly and efficiently respond to the next disruption—here are six sustainable solutions for now and the longer haul

Among the various challenges brands and retailers are facing in 2020, a lack of demand has added to an unprecedented amount of excess inventory. Meanwhile, an overwhelming shift to e-commerce has companies struggling to fulfill orders efficiently, while those without an established online presence are finding themselves lagging behind. After a months-long downturn, agile brands are actively exploring, testing and adopting new strategies to better meet today’s consumer expectations—Zara owner Inditex is even reportedly investing 1 billion between now and 2022 in its ecommerce operations, after experiencing such a surge during lockdowns. 

Within a state of accelerated digital transformation, virtual and user-generated marketing, evolving business models, and intelligently connected logistics are powering new forms of customer acquisition, and helping to better predict demand. Many retailers are now also placing sustainable practices at the focal point of their brand as they look to rebuild their businesses, with the resale market projected to increase from $7 billion last year to $36 billion by 2024.

Drawn from PSFK research on ways fashion brands and retailers are adopting digital-first and sustainable solutions in a disrupted industry, the following six trends outline innovative business practices and models that place new value on efficiency, accessibility and circularity, while offering one-to-one experiences at scale.

Rotating Closets — With consumers’ day-to-day lives increasingly taking place within their homes and the digital world, fashion’s value proposition is shifting for a savings-focused consumer base. Nonetheless, there’s still a desire for the excitement that new purchases bring, helping to positively position rental platforms that offer both convenience and repeated novelty, without the cost of commitment. Irish rental platform Nuw, for instance, is a clothes-sharing app and community that invites members to upload an image of an item for approval, then connect locally to lend or rent out items themselves. 

Alternative Distribution Models — In a crowded subscription market, existing services are rolling out new packages as competitive differentiators, while newcomers are experimenting with direct-from-supplier models that bring wholesale pricing to consumers. Invite-only emarketplace Italic Black works by connecting manufacturers and consumers, offering its members access to unbranded luxury goods at wholesale prices thanks to a direct-from-supplier model.  

Virtual Runways Even before Covid-19, the traditional fashion show was in a state of flux, as designers and brands experimented with new launch strategies like digital runways and in-season collection drops. With the marketplace conditions as a catalyst, digital solutions—virtual showrooms, 3D runways and live-streamed events—are shaping a new era of remote fashion events and entertainment. Take wholesale platform Joor, which created a virtual tradeshow portal called Passport. There, buyers and retailers are able to attend shows online all over the globe, browse lookbooks in digital showrooms, and place orders with new or old-favorite brands. 

Connected Inventory Retailers are partnering with technology providers and creating internal solutions in order to achieve greater visibility of inventory as well as better predict, distribute and fulfill inventory across all POS channels. Further, they are leveraging services capable of redistributing items that would otherwise go unsold at the end of seasons. Online fashion hub Otrium does just this, selling end-of-season collections from retail brands that would otherwise have to destroy their inventory by letting them manage their own outlet, set prices and even access consumer insights. 

Co-Created Content In response to social distancing guidelines, brands and retailers are quickly pivoting on how they produce their marketing assets. Recognizing the value of user-generated content, brands are increasingly tapping into their existing fan bases and communities to launch new campaigns and collections. Size-inclusive fashion brand Eloquii, for one, partnered with its ambassadors to model its new wares from their homes, granting creative liberty to the influencers themselves and creating more authentic images for editorial. 

Fit TechEliminating one of the greatest friction points in online shopping, fit tech capabilities are being integrated into retailers’ digital platforms, creating an enhanced shopper experience while eliminating the rate of sizing-related returns. Vertebrae is an augmented reality tech company helping retailers enable these kinds of 3D and mixed-reality commerce experiences, developing virtual tools intended for mobile-first audiences that leverage users’ device cameras to enable try-ons of merchandise like sunglasses, hats and jewelry. 

This is just a selection of sustainable solutions that innovative fashion and apparel retailers are adopting to reinvent their business models for a changed world—for more, check out the research here