Pushing sustainability in the apparel industry
Dean Frew, CTO and Senior Vice President, RFID Solutions, SML, discusses the drive for sustainability in the apparel industry.
Sustainability continues to be a critical subject line for a number of industries - none more so than the apparel and footwear sector. As business models for brand owners and fashion retailers evolved, giving customers immediate access to the latest trends, critics have weighed in on the impact the fashion industry has made to the global environment.
With growing pressures from environmental organizations and shifting customer values, whereby shoppers choose to engage with brands they deem more environmentally conscious, more retailers are taking proactive steps towards sustainability.
These days, consumers don’t just want high-quality products, value for money or efficient home delivery. Instead, they also want socially conscious brands and retailers with similar ethos to their own. In fact, research released by Euclid, revealed that customers prefer brands that share aligned values more than the brand’s actual products. Amongst the data, it found that 52% of millennials and 48% of Generation X feel it’s important that their values align with the brands they like. This is compared to just 35% of baby boomers who felt the same way.
A global industry working towards one single goal
In the UK alone, more than 25 large retailers including John Lewis, Next and House of Fraser pledged to take part in the British Retail Consortium’s new sustainability initiative - Better Retail Better World Initiative. The scheme includes a number of targets the retail sector must meet as a whole by 2020 such as; reducing waste, greenhouse gas emissions and deforestation and publicly disclosing how they are supporting individuals from underrepresented demographics to progress in employment.
In addition to large-scale initiatives enabling retailers to adopt sustainable practices, many brands are implementing their own processes in order to make their entire supply chain more environmentally friendly. As a result, many retailers are utilizing sustainable materials for garments, recycling materials as well as using more carbon-neutral transportation methods.
For example, Walmart recently announced its plans to reduce plastic waste in addition to promoting consumer-friendly recycling labels. As well, H&M’s Conscious Collection marks the fashion giant’s move into sustainable fashion. Each item in the collection has an aspect that reduces its impact on the environment by using sustainable materials such as organic cotton or recycled polyester. The fashion brand also provides clothing recycling facilities where they ensure the materials don’t end up in a landfill. For the past 6 years, the H&M group has collected 78,000 tons of clothing from customers as a result of its donation points in stores around the world. Footwear brands such as Nike and Adidas have also made steps to reduce their carbon footprint, both through manufacturing processes and material innovations.
The hidden secret of sustainability
Whilst retailers have an optimum opportunity in reducing their impact on the environment through the materials in their new products, a sustainability secret also lies within the cost of their existing stock. Most retailers these days operate with an inventory accuracy of less than 70% which, as-a-result, often leads to bloated stock with remains unsold and ultimately ends excess waste and transportation.
A luxury fashion brand was recently under fire when it was revealed it had destroyed $40M worth of stock instead of selling items at a reduced price. In addition, it’s reported that over 12 million tons of clothes are sent to landfills with unsold clothes undoubtedly making up a significant percentage.
RFID and the sustainable supply chain
As millions of tons of clothes are sent to landfill each year, it’s essential that retailers and brands explore ways in which they can reduce the number of items being produced. With retailers currently operating at 70% inventory accuracy on average, it’s highly likely that many remain in the dark about what items are selling compared to those that are left on the stockroom floor. By utilizing technologies such as item-level RFID for inventory management retailers can reduce their environmental impact by ensuring a higher accuracy of their inventory and therefore decreasing both their bloated stock.
Due to the technology being able to deliver a stock accuracy of 98%, retailers are able to make much more informed decisions around their stock levels. If certain items aren’t selling, they can reduce the amount produced at the manufacturing stage; minimizing production materials and transport emissions. By implementing this process, brands and retailers are ensuring that all stock produced will be sold and reducing the amount sent to landfill. Numerous retailers to date have reduced their inventory levels by more than 10% while increasing sales simultaneously.
Another secret that will soon start coming into the light as more retailers adopt item-level RFID and improve inventory accuracies is the savings that trickle down into reduced transportation and the reduced emissions that are a result. Retailers can decrease the shipment of thousands of shipping containers of goods thanks to a new era of inventory management through item-level RFID, making a tangible impact on transportation generated emissions.
In order to deliver on the promise of sustainable retail, brands need to consider more than ensuring the materials they use have less impact on the environment. Instead, they need to take a closer look at their entire supply chain and the ways in which they can make small changes that can make a significant distance. For example, minimizing plastics used in clothing tags and hangers and using paper-based alternatives.
As the conversation around sustainability and fashion continues to weigh on, and the importance of this becomes increasingly apparent, retailers need to ensure they are paying attention to what their eco-conscious customers want. Not only will this lead to an exemplary example of social responsibility but enable retailers to attract shoppers whilst simultaneously caring for the world we live in.
For more information on business topics in the United States, please take a look at the latest edition of Business Chief USA.
Marketing matters: from IBM to Kyndryl
Prior to joining Kyndryl as Chief Marketing Officer, Maria had a 25-year career at IBM, most recently as the tech giant’s CMO where she oversaw all marketing professionals and activities across North America, Canada and Latin America. She has held senior global marketing positions in a variety of disciplines and business units across IBM, most notably strategic initiatives in Smarter Cities and Watson Customer Engagement, as well as leading teams in services, business analytics, and mobile and industry solutions. She is known for her work with teams to leverage data, analytics and cloud technologies to build deeper engagements with customers and partners.
With a passion for marketing, business and people, and a recognized expert in data-driven marketing and brand engagement, Maria talks to Business Chief about her new role, her leadership style and what success means to her.
You've recently moved from IBM to Kyndryl, joining as CMO. Tell us about this exciting new role?
I’m Chief Marketing Officer for Kyndryl, the independent company that will be created following the separation from IBM of its Managed Infrastructure Services business, expected to occur by the end of 2021. My role is to plan, develop, and execute Kyndryl's marketing and advertising initiatives. This includes building a company culture and brand identity on which we base our marketing and advertising strategy.
We have an amazing opportunity ahead at Kyndryl to create a company brand that will stand apart in the market by leading with our people first. Once we are an independent company, each Kyndryl employee will advance the vital systems that power human progress. Our people are devoted, restless, empathetic, and anticipatory – key qualities needed as we build on existing customer relationships and cultivate new ones. Our people are at the heart of this business and I am deeply hopeful and excited for our future.
What experiences have helped prepare you for this new opportunity?
I’ve had a very rich and diverse career history at IBM that has lasted 25+ years. I started out in sales but landed explored opportunities at IBM in different roles, business units, geographies, and functions. Marketing and business are my passions and I landed on Marketing because it allowed me to utilize both my left and right brain, bringing together art and science. In college, I was no tonly a business major, but an art major. I love marketing because I can leverage my extensive knowledge of business, while also being able to think openly and creatively.
The opportunities I was given during my time at IBM and my natural curiosity have led me to the path I’m on now and there’s no better next career step than a once-in-a-lifetime-opportunity to help launch a company. The core of my role at Kyndryl is to create a culture centered on our people and growing up in my career at IBM has allowed me to see first-hand how to prioritize people and ensure they are at the heart of progress in everything Kyndryl will do.
How would you describe your leadership style?
I believe that people aren't your greatest assets, they are your only assets. My platform and background for leadership has always been grounded in authenticity to who I am and centered on diversity and inclusion. I immigrated to the US from Chile when I was 10 years old and so I know the power and beauty that comes from leaning into what makes you different from other people, and that's what I want every person in my marketing organization to feel – the value in bringing their most authentic self to work every day. The way our employees feel when they show up for themselves authentically is how they will also show up for our customers, and strong relationships drive growth.
I think this is especially true in light of a world forever changed by the pandemic. Living through such an unprecedented time has reinforced that we are all humans. We can't lead or care for one another without empathy and I think leaders everywhere have been reminded of this.
What’s the best leadership advice you’ve received?
When I was growing up as an immigrant in North Carolina, I often wanted to be just like everyone else. But my mother always told me: Be unique, be memorable – you have an authentic view and experience of the world that no one else will ever have, so don't try to be anyone else but you.
What does success look like to you?
I think the concept of success is multi-faceted. From a career perspective, being in a job where you're respected and appreciated, and where you can see how your contributions are providing value by motivating your teams to be better – that's success! From a personal perspective, there is no greater accomplishment than investing in the next generation. I love mentoring younger professionals – they are the future. I want my legacy as a leader to include providing value in work culture, but also in leaving a personal impact on the lives of professionals who will carry the workforce forward. Finding a position in life with a job and company that offers me a chance at all of that is what success looks like to me.
What advice would you give to your younger self just starting out in the industry?
I've always been a naturally curious person and it's easy for me to over-commit to projects that pique my interest. I've learned over years of practice how to manage that, so to my younger self I’d say… prioritize the things that are most important, and then become amazing at those things.