Breaking the fashion industry’s low price cycle
10-11-2023
BREAKING THE FASHION INDUSTRY’S LOW PRICE CYCLE
International Apparel Federation's secretary general, Matthijs Crietee, hopes more fashion manufacturers and factories will break out of the low price trap in 2024 whereby higher volume orders are made to compensate for goods being sold at discounted prices.
The drinks,
canapés and fashion industry networking are in full swing on the top floor of
Philadelphia’s Bellevue Hotel when Just Style manages to pull Crietee away from
his guests to discuss the first day of the 38th World Fashion Convention, which
is being co-hosted by the IAF and the Sewn Products Equipment & Suppliers
of the Americas (SPESA).
In a private dining room with
a floor-to-ceiling glass partition that just about masks the endless
thought-provoking conversations surrounding us, Crietee agrees it’s been a
great first day for the event. Still, he cautions, for the sector as a whole –
“things aren’t going great”.
He clarifies that
transformation should be going better and faster in terms of “environmental
performance, social performance and business performance”. Plus, he says: “all
three are very much interrelated so on a systemic level things need to change.”
He’s confident however that
the conference, which is themed around building a stronger, smarter and more
sustainable supply chain, will help to join the dots, and notes the World
Fashion Convention’s approach is always holistic: “If you take one topic in
isolation it’s difficult to change.
“I like the example of
digitalisation as if the industry gets that right it has the ability to create
that systemic change,” he says smiling.
His example makes complete
sense. If product development is done digitally, suppliers are in a better
position as it’s less transactional so they are part of the process and the
work is carried out together.
This leads to a better product
that can be produced more quickly. Plus, he asserts, it’s harder for a supplier
to “get dropped” because digitalisation has made them an integrated part of the
process.
The holistic approach doesn’t
stop there as he explains digitalisation also leads to energy savings from not
needing to make physical samples so there is an environmental benefit to it.
And going one step further, the product can be advertised to consumers online
using the digital design before it’s even made in reality so the operation is
more nimble and it’s on-demand. In other words, this online space can be used
to test if a new product will sell before production even begins.
High hopes for
fashion sector transformation away from low price
Crietee remains optimistic
about the fashion industry and in particular fashion manufacturing in 2024. He
predicts fashion manufacturers will have more business next year as fashion
retailers’ excess inventories will be reduced.
He’s also hopeful the industry
will continue its transformation away from chasing the lowest price with fewer
fashion manufacturers getting caught in what he terms the “low price trap”.
He defines this as the
industry needing to compensate for items being sold at discount by buying
higher volumes, which in turn becomes a bigger fashion risk and leads to
markdowns, and so the whole cycle continues.
On the plus side, he’s quick
to add: “More factories are able to break out of this cycle because they can
offer non-price value as well. This could be finding ways to make more money
for the client, delivering data about the raw materials they use, coming up
with great designs or investing in digitalisation.”
Helping the global
manufacturing community
The IAF’s focus is on the
global fashion manufacturing community and giving that community a voice.
Crietee and his team have been
extremely busy creating partnerships, collaborations and Memorandum of
Understandings (MoU) with international initiatives and organisations to ensure
manufacturers are heard and any proposed supply chain solutions will benefit
all concerned.
In the same month, it also
signed an MoU with the non-profit Sustainable Apparel Coalition (SAC) to
streamline social and environmental assessments that often impose unnecessary
burdens on manufacturers.
And if that wasn’t enough,
only last month (October) the IAF announced a framework
agreement with Spanish
fashion brand Zara’s parent company, Inditex, to drive social and environmental
change throughout the fashion supply chain.
Crietee declares modestly “IAF
is just one organisation so we have to be clear about what we can and can’t
do,” but under the same breath, he’s able to share yet another remarkable
initiative.
As the co-initiator of the
Sustainable Terms of Trade Initiative (STTI), the IAF along with other global
organisations published a whitepaper on purchasing practices that he admits has
already been well received and has provided buyers with clear expectations to
follow.
Ultimately, Crietee tells Just
Style, he’s keen for the IAF to have a single answer when someone asks what “do
fashion manufacturers want?” But, he knows this requires work and he will
continue working tirelessly with all industry global players to find out the
answers and help make the supply chain solutions the entire fashion industry
needs, a reality.
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