According to the European Commission, clothing has the 4th highest environmental impact of any consumer product in the EU.
In light of this, the EU has incoming regulations regarding a fashion brand’s transparency and traceability of its data. However, many luxury brands including Mulberry England, Jimmy Choo, and Versace have recently expressed that the issue lies in the overall lack of data to comply with these new regulations in an article by Vouge Business.
This gap in information poses major challenges to business goals such as sustainability, ethical practices, and consumer trust within the fashion ecosystem.
But what are the reasons behind the data gap in the fashion industry? How can brands enhance their data sets for improved traceability? And what are some potential solutions to bridge this divide? In this article, we explore the data gap in the garments industry and the moves that companies can make to fill this gap.
Why is there a gap in fashion data?
1. Inconsistencies in Supply Chain Data
First of all, inconsistencies in the supply chain are one of the main reasons for a gap in fashion data.
Historically, brands have undervalued the knowledge of information across the supply chain, such as the verification of suppliers. Because textiles have a layered supply chain across varying regions, tracking this data requires an arduous and deep analysis, which is not only difficult to obtain but also very costly.
Nevertheless, this data is extremely valuable for sustainable initiatives and overall brand reputation. For instance, the US Customs and Border Protection revealed that in April 2023 alone, 377 shipments valued at more than $159 million were inspected on suspicion of containing cotton linked to alleged forced labor.
2. Lack of Standardization
Another contributing factor is the lack of standardized data collection practices within the industry. Unlike the traditionally data-driven sectors such as finance and healthcare, the fashion industry lacks universally accepted metrics and reporting standards. This absence of standardization leads to inconsistent data collection methods, making it difficult to compare and assess sustainability practices across brands.
3. Consumer Demand
Moreover, a historical lack of consumer demand for transparency has allowed brands to operate with limited disclosure. Consumers traditionally prioritized style, cost, and brand image over the environmental and ethical implications of their clothing choices. As a result, many fashion companies did not see the need to invest in comprehensive data collection and disclosure. However, in the wake of climate change, this sentiment is slowly changing, as more and more consumers are making the effort to shop sustainably.
How can brands improve fashion data for traceability and sustainability?
Remo Cali from the Candiani Denim company, has expressed the significant relationship between sustainability, quality, transparency, and traceability.
Solution 1: Supply Chain Analytics
Supply chain analytics leverages data and statistical models to gain insights, which enables brands and retailers to make data-driven decisions to reduce costs, assess risks, improve customer experiences, and overall increase efficiency.
Some applications of supply chain analytics include:
- Inventory management: analyzing inventory levels, lead times, and customer demand to optimize stock levels.
- Supplier performance analysis: analyzing quality, delivery times, and price, for suppliers to build alliances and negotiations.
- Demand forecasting: accurate demand prediction based on historical sales, market trends, and customer behavior.
The process of obtaining this data comes at a cost and requires great effort and expertise, however, it is essential for gaining complete control over the supply chain for the overall integrity of a brand.
Solution 2: Data Infrastructure Investment
Another essential step is investing in technology and digital infrastructure. Incorporating advanced technologies, such as blockchain and the Internet of Things (IoT), can enable brands to create a transparent and interconnected supply chain. Blockchain, for example, can provide an immutable and decentralized ledger, allowing for real-time tracking of products from raw materials to the final product.
Solution 3: Standardization & Governance
Furthermore, brands should adopt standardized data collection and reporting practices. Collaboration within the industry to establish common metrics and guidelines for sustainability reporting can streamline the process and make it easier for consumers to understand and compare the environmental and ethical impact of different brands.
Solution 4: Transparency & Consumer Education
Consumer education is another crucial aspect of improving data sets for traceability. Brands can actively engage with consumers, raising awareness about the social and environmental consequences of fashion choices. While it may seem that demand is dictated by consumers, by advocating for better fashion data transparency, brands can nudge shoppers to be mindful. The benefits can be threefold as not only do brands make strides towards positive social impact, but customers will trust and value the brand’s message deeply, ultimately driving loyalty and profitability in it’s wake. It’s a win-win.
How can we fill the gap?
Evaluating sustainability performances in the fashion industry is important both environmentally and socially. Mitigating proper data acquisition methods and management properties is not only essential for complying with new and changing regulations, but also for maintaining the overall integrity of a brand.
Some possible solutions to bridge the gap include:
- Going up to Tier Four (raw material source) for origin and manufacturing information.
- Acquiring data sets up until the final place of manufacturing of the product.
- Having a full breakdown of materials in their products for lifestyle assessments.
- Brands, manufacturers, NGOs, and government bodies should work together to establish standardized metrics and reporting frameworks.
- Leverage advanced technologies to enhance traceability and transparency. The implementation of blockchain, RFID (Radio-Frequency Identification), and other emerging technologies can facilitate real-time data tracking throughout the supply chain.
- Educating consumers about the impact of their purchasing decisions empowers them to make informed choices and encourages responsible consumption.
- Regulatory Measures: By establishing clear guidelines and penalties for non-compliance, regulators can create a framework that incentivizes brands to invest in comprehensive data collection and disclosure.
- Allocate resources to research and development focused on sustainable and traceable practices. This includes investing in new materials, manufacturing processes, and supply chain innovations that reduce the environmental impact of the fashion industry.
Conclusion
The data gap in the fashion industry poses a significant challenge to sustainability, ethical practices, and consumer trust. However, with concerted efforts from industry stakeholders, including brands, manufacturers, consumers, and regulators, it is possible to bridge this gap. By embracing advanced technologies, standardizing data collection practices, and encouraging a culture of transparency, the fashion industry can transform itself into a more accountable and sustainable sector.
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