How suppliers, brands should handle transparency, accountability in 2024
21-12-2023
HOW SUPPLIERS, BRANDS SHOULD HANDLE TRANSPARENCY, ACCOUNTABILITY IN 2024
Fashion sourcing experts share a roadmap for navigating transparency in 2024 and explain why the future of successful fashion sourcing will depend on collective responsibility throughout the supply chain.
Transparency and accountability have superseded sustainability as the driving forces for fashion sourcing as we head towards 2024.
In a webinar titled ‘Why transparency and accountability are replacing sustainability in sourcing,’ Source Fashion trade show’s sourcing director, Suzanne Ellingham and head of trends at Insider Trends, Jack Stratten urged fashion sourcing executives to embrace transparent practices, take accountability, and adopt a collective responsibility mindset.
The evolution of sustainability in 2024
Ellingham explained the challenge of focusing solely on sustainability is there are so many definitions, classifications and interpretations of what it means.
For instance, when she surveyed fashion manufacturers and retailers about sustainability classifications she got 150 different answers from that one question alone.
This is why she believes transparency is so important. When you are transparent about something you have to be accountable for changing it. She suggested a lack of transparency could be due to fear or uncertainty about which sustainability initiatives brands should focus on.
Stratten noted that sustainability has become a buzzword, but fashion brands must move beyond the buzz and make real with impactful changes in their sourcing practices. Both Ellingham and Stratten agreed the problem is that nobody truly knows what sustainability means.
Stratten said: “Even world experts on this don’t know. They might have a sense of what it means but their version of it isn’t necessarily the version that we’ll think about.
“How do you penalise someone for something that none of us understand? But that’s the good thing about transparency, we can all observe what’s happening.”
How to balance transparency as a supplier in the retail industry in 2024
Stratten empathised with suppliers concerned about potentially losing business for speaking out to retailers about the importance of transparency. However, he added it makes sense for suppliers to be the first to enforce their values onto retailers as otherwise it will hit them from another angle anyway.
For instance, he noted big businesses are starting to use Ecovadis, a third-party sustainable procurement assessment tool to find the sustainability credentials for everyone in their supply chain.
Ellingham and Stratten shared four tips for suppliers wishing to navigate transparency with their fashion retailer buyers:
• Hold brands and retailers responsible when problems are identified
• Engage in constructive discussions with the businesses you are collaborating with
• Devise a strategy for assessing and enhancing the identified issues
• Inform the brand or retailer that costs will increase to make the supply chain more sustainable and transparent.
Stratten added the other side of transparency and accountability is about educating consumers on the process of creating garments and explaining the hard work and effort that goes into producing them.
He explained customers may appreciate the higher price point if they are made aware of the complex yet ethical production process so this can help brands ensure a fair price point for the product that benefits everyone within the supply chain.
Turning transparency into a catalyst for change
Ellingham spotlighted the essential role transparency plays in building accountable businesses. She noted ‘B Corp’ is a certification that is coming into the consumer consciousness.
Certified ‘B Corporations’ are businesses that meet high standards of social and environmental performance, transparency, and accountability as verified by B Lab.
“These certifications are fantastic, but they’re not the end goal,” said Ellingham.
She believes there are a large number of consumers that care about whether a product is ethically made, so it makes sense for businesses to state this and find a way to express that through transparency.
Stratten echoed Ellingham’s stance and added the key to solving challenges in terms of costs, loyalty with brands, and climate issues is by looking outside of your business, collaborating with other companies and entering new communities through trade show events like Source Fashion.
Ellingham explained it’s essential for big fashion retail businesses to have a clear stance on transparency and how to communicate with consumers when issues arise.
Stratten highlighted that smaller brands have benefitted commercially from sharing transparent, accountable and detailed product information on their websites and in-store. He also pointed out that these kinds of businesses tend to be more expensive.
However, he added evidence suggests that when it comes down to it, people will still go for price over sustainability or perceived sustainability. That doesn’t mean it’s not worth doing, he said. It just means that we’re still living in a post-pandemic world where consumers are still struggling with high inflation and the cost of living crisis.
How retailers can make changes to their supply chain
Stratten brought up a common pitfall among brands – the tendency to prioritise the branding benefits of sustainability over making tangible business improvements.
He touched on how language and mindset are closely linked and serve as the foundation for any communication. For large brands, this can be particularly challenging as the more prominent they become, the greater the impact of their actions and words.
Ellingham advised fashion retailers and brands to use transparency to find out where your money is being spent.
She added: “If you go to your manufacturer and say this is important to us, or we’re potentially going to move our business, you’ll be surprised how quickly you may see changes.”
The reason Stratten believes companies don’t come forward with issues in their supply chain is the fear it could open many “skeletons in the closet” but he states this is a fear that needs to be overcome as there are more pros than cons to having greater transparency.
Stratten maintained that businesses need to start thinking more long-term than short-term. He referenced fast fashion retailers such as Shein and Temu’s business models as being short-term as they resulted in “insane” growth within a short space of time.
He said conversations have already started on the longevity of these brands and questions such as do they have any repeat business. Is there any kind of customer service? Is there any sense of brand loyalty?
“It won’t last long,” argued Stratten. “There’s no retail there, there’s no brand, there’s no story. It’s just a load of products rapidly sent to customers at the cheapest possible price.”
He feels businesses need to prioritise sustainable supply chain solutions instead of short-term gains based on prioritising low prices.
Many fashion brands are experimenting with new initiatives to engage with customers on transparency and encourage circularity once products reach the end of life. Ellingham noted British luxury accessory brand Mulberry has an exchange buy back programme with a preloved section on its website to attract customers back to its business when items become worn.
Ellingham believes exchange and swap opportunities, especially near the end of a product’s life, may influence the way consumers consider pricing as well. She added it’s essential for consumers to recognise that products are not disposable but hold value.
Looking to the future
Both speakers remained optimistic about fashion sourcing in 2024. Ellingham is hopeful about the future of transparency and its potential to help larger fashion retailers address the challenges they face in certain regions.
Sometimes there are issues that fashion retailers cannot solve alone, but Ellingham believes there’s a chance for retailers and producers to work together to bring about positive change.
Stratten agreed and shared the spirit of humility is what gets businesses into transparency and he encourages fashion retailers to admit when they are getting it wrong and embracing the idea of starting again.
He encouraged fashion brands to be prepared for criticism and argued it’s essential to see it as part of the journey toward meaningful change.
Transparency invites scrutiny, and that’s a positive force for the fashion sourcing industry.
Last month (November) the latest McKinsey & Co State of Fashion 2024 report revealed supply chain resiliency will be a key area of focus for fashion industry executives in 2024 with transparency and communication across all supply chain stakeholders paramount in future-proofing businesses.
By Just Style
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