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How Governments Can Kick-off the Future of Fashion

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Embracing digitization can make the fashion industry more sustainable and lucrative.

What could help the Fashion industry and its sustainability challenges? Digitalization is a tool to interconnect theSupply Chain. It presents many benefits such as engaging customers via product communication, enhancing traceability, and thus, increasing transparency; procurement with AI helps predict demand and ultimately reduce overproduction, and smart manufacturing helps manage resource consumption. Producing sustainably is one step,producing less is more crucial. Smaller production volumes sound counter-intuitive when targeting economic growth. It is, in fact, a measure usually connotated with crisis management. However, decreasing production volume does notneed to decrease profits but rather to rethink business models and introduce new revenue streams or reduce costs.

In total, 10% of global annual CO2 emissions are attributable to the fashion industry. At this pace and with unchanginggrowth rates, the textile industry will be responsible for more than 50 percent of total carbon emissions. Although consumers seem to have developed an increased awareness for sustainability and environment-conscious consumption – especially in Europe – this change in attitude does not necessarily translate into actual purchase orconsumption behavior. A post-truth era reached fashion: facts are constantly diluted and opinions manipulated,resulting in uncertainty as to which offers are truly sustainable.

Eco-friendly and sustainability-focused voices have become louder in the wake of the ongoing pandemic, allowing forthe hope that long-term effects on behavioral tendencies are in reach.

Sustainable materials are a drop in the ocean – literally.

Introducing new fibers and zero-waste designs is all fair game. Reducing travel during fashion months is commonsense considering the ongoing Covid-19 pandemic and its aftermath. However, these measures are but small steps. Itis necessary to address the elephant in the room: hyperproduction: Industry overproduction runs at an incredible 30 – 40% each seasonWith this continuous exponential growth, the fashion industry is expected to produce 160 million tons of clothing by 2050. The rationale behind this absurdity is evident: growth remains the central KPI, and it is currently measured as if increased production was the one and only lever to increase profits.

The majority of the $1.3 billion-strong fashion industry relies on the equation that higher production results inincreased revenue. Yet, the industry’s current state reveals the first symptoms of a looming systemic failure: tons ofunsold stock and textile waste whose recyclability and recycling quota remain largely unaccounted for.

C&A’s “Wear the change,” Zara’s “join life,” or H&M’s “CONSCIOUS” are offering cheap fashion and a clean environmental conscience. But the massive volume of items they produce at a weekly collection turnover and free & fast deliveryservice will never be sustainable. Awareness Campaigns should emphasize the fact that no matter what, cheapproducts are never sustainable. As the Author & Journalist, Lucy Siegle rightly said: “[Fast] fashion is not free.Someone somewhere is paying“. This overproduction is damaging on both ends of the supply chain -with raw material extraction, water & air pollution, and ending landfills after use or due to unsold / returned inventories.

The only way to alleviate this would be to switch to a service model and investing in digitization and transparency. We see once again the need for mandatory sustainability reports that clearly present brands’ environmental and social impacts and for brands to be held accountable for their products during their entire life cycle. Promising laws for this are France’s Anti-Waste law which bans brands from destroying unsold products and making microplastic filtersmandatory in industrial washing machines. In Germany, in addition to transposing waste legislation adopted under theEuropean Union’s Circular Economy Package into national law, [the government] introduce a “duty of care”(Obhutspflicht) which will require distributors in case of distance sales to ensure that the goods remain usable ifreturned by the customer and do not become waste.

On the other hand, service models including rental, repair, along with resale could help maintain low retail prices forcustomers who want to buy sustainably but cannot necessarily afford premium prices. Furthermore, extending the scope of business models to services like repair, redesign, and upcycling can help turn less knowledgeable consumers into customers, and thus, increase revenue for fashion brands.

Maintaining the same level or even a higher level of profitability can be achieved with the help of technology. Fordigitization to be system-altering, its challenges in the status quo must be assessed, especially considering currentonline operations.

In this context, return processes and costs continue to be the most pressing issues. Returns from online shopping range between 15 and 40 percent. Customers are prone to order multiple similar items to try on and to ship back the discarded options. This behavior can partially be explained by looking for a particular look they are not able to recreate due to inaccurate product descriptions and illustrations – and the lack of standards in fitting and sizes. By understanding key issues that trigger returns – among various other challenges – respective digital solutions can be identified. For this specific example, the integration of virtual showrooms with photo-realistic yet customizable content – similar to emerging use cases in real estate applications – might support the customer’s selection process.Furthermore, an automated similarity index and industry-overarching standardized sizes can help choose the right items and ensure their proper fit.

Another great digital solution is the in3D: 3D body scanning for capturing the exact shape and look of a human body with a smartphone camera, allowing the perfect fit for customers while capturing data sizing to reduce returnsand increase conversion.

Fashion needs a game-changer in its efforts to act more responsibly. Combining new technologies to ensure more sustainable fibers while decreasing total production volume and making sales more efficient is the equation the fashion industry should dogmatize. This new kind of growth can help us save the industry – and our planet.

Because data is based on loose standards and self-reporting, the amount of data and data quality remain a majorchallenge. If we cannot trust data, how can we implement solutions? Only large-scale service retailers, properly funded recycling technology, and predictive production will allow overconsumption to decelerate. Integrating technology throughout the fashion value chain is expensive. Due to the high initial outlay, a lack of appropriate infrastructure, and a potential lack of guaranteed return on investment, governments have the most significant fiscal power to facilitate such projects.

As Governments’ focus shifts in the aftermath of the COVID-19 pandemic and global economic crisis, the COP26 UN Climate Change Summit is considered significant. It will be the first COP to take place after the landmark Paris Agreement’s measures take effect. While it is expected for the COP26 to finalize “implementation guidelines” forArticle 6 of the Paris Agreement, which has to do with “cooperative approaches” to tackling climate change, it is the first opportunity since then for nations to come together to review commitments and strengthen ambition. Will it trigger a new wave of effective global climate action for the Fashion industry?

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