“‘By 2027 the consumer goods market will be dominated by sustainable products and business models,” explains Siobhan Gehin who heads up the retail and consumer goods practice for Roland Berger in the UK. “Paying lip-service to sustainability is no longer an option for fashion businesses, if they want to survive.”
Roland Berger estimates that the fashion resale market in Europe will see growth in excess of 15% per to 2026.
We expect to see a tipping point around the middle of this decade, when most of the growth in the mainstream fashion market will come from sustainable business models.”
“Momentum is being heightened by impending legislation to reduce CO2 emissions which is also being driven by more mindful and environmentally conscious consumers. This is what will ultimately flush non-sustainable players and products out of the market.”
According to Roland Berger’s research, some 50 per cent of consumers care about the C02 emissions of their purchases, with 37 per cent of 25 to 45 year olds being particularly concerned about the climate friendliness of their clothing.
“Achieving a robust sustainability strategy will require a complete transformation of supply chains, with businesses working as far upstream to cotton farmers and looking at the impact of natural phenomena such as how floods affect crop yields, as well as reviewing their water and carbon footprint, for instance, to further downstream working on the initial design of a garment as well as dealing with its end of life,” says Gehin.
According to industry statistics, some 20 per cent of water pollution is caused by the textile industry, which uses 8,000 different chemicals, and 15 to 30 per cent of plastic pollution in the oceans is caused by machine washing of clothes with synthetic fibres. The fashion industry is responsible for contributing an estimated 5 per cent of all global carbon emissions.
Fashion companies will only be able to successfully tackle these challenges by making sustainability an elementary part of their strategy and roadmap, with all business functions working together with this focus at the heart of all decisions. Sustainability can no longer sit in its own silo.
“However, as businesses move towards becoming more sustainable, sustainability itself is no longer a differentiation point. We are seeing the rise of second-hand marketplaces and fashion brands and retailers increasingly embracing the circular economy. Although this is only one lever to reduce waste, the model has many associated costs and challenges, including managing logistics and addressing consumers’ hygiene concerns.
“To reduce waste, even the more ‘value priced’ fashion businesses are looking to make sustainable products affordable, durable, and recyclable, yet this is unlikely to deliver immediate profits, particularly for those operating in mass markets.
“With many fashion businesses well-established in their culture, it is going to take time and investment to change practices both internally and externally with partners.
“While there are no specific deadlines, legislation is moving forward and likely to be in place in the next few years. The EU sustainable textile strategy launched earlier this year set the scene for what we can expect: a focus on garment longevity, garment recyclability, and applying circular economy principles with economically profitable re-use and repair services widely available. The EU strategy is quite pointed in stating that by 2030, ‘fast fashion is out of fashion’.
We are at a critical phase of tackling the conundrum of reducing waste and its impact on the planet but doing all this while still generating revenue growth and running a profitable business, is becoming an even greater challenge.
“From a marketing perspective it is already very clear that any claim a business makes about a product’s sustainability has to be substantiated; failure to do so could transform the sustainability message from being a sales positive to potentially a brand destroyer,” concludes Gehin.
Siobhan Gehin is being interviewed at the Sustainability in Fashion session at COP27 in Egypt on Thursday 10 November
