As Retail Sales Plummet, Are Major Brands Ready to Embrace Sustainability ?

WORDS BY VIKTORIA BIELAWA

In the wake of COVID-19 and it’s increasing economic disruptions, fastfashion giants are beginning to fall one by one into administrations and bankruptcies. Could retailers finally embrace sustainability to recover from the pandemic?

We’ve all been told many times over that the fashion industry is the top pollutant of our planet, but what many may not realise is how some companies are establishing sustainable and value-orientated practices to boost their sales, making vast profits right in the middle of a global pandemic.

Seeming to have fuelled a new eco-consciousness, consumers have begun to increasingly look for sustainable alternatives in the market. Luxury fashion leaders, like Gucci’s Alessandro Michele, have spoken out about the rigorous nature of the fashion business - pledging to going ‘season-less’ and taking on more responsibility within the industry.

Since the stay-at-home orders were enforced in mid-March, consumers increasingly re-evaluated their priorities - particularly when it came to fashion. Encompassed by the trend, which highlighted the troubles facing fast-fashion retailers, more and more shoppers begun demanding sustainable practices and transparency from brands - willing to expose and abandon those who do not oblige.

Retail giants like the Arcadia Group, Debenhams, and Victoria’s Secret, have all entered administration after the first lockdown wave. The announcements plastered on every news outlet in the country - but are we really that surprised?

Their business models, like many other fast-fashion brands, prioritise profit over people and planet. During the first wave of the pandemic, they cancelled over £100 million orders from overseas manufacturers - causing much criticism for their behaviour and treatment of the vulnerable manufacturing workers, leaving thousands without income.

'I Couldn't Make An Ethical Collection'

by Nienke Creemers

Temporary store closures and mass unemployment caused a decline in sales across the whole sector, leaving major companies struggling to sustain their affairs in the wake of the pandemic. Businesses took a huge loss over the whole year, with Kering alone having a £2.9 billion decline in the first 2020 quarter.

For some brands, this was a wake-up call to reformulate their business plans and go back to basics. Earlier this year, Alessandro Michele devised a plan for Gucci to cut down to only two collections per year, saying, “I hope that the choices we do make will respect the actual timing of fashion and factories, and the people who work there.” By reducing the collection output, Michele wants to increase the sustainability of the fashion we buy, and as an industry leader (with a revenue close to £9 billion), other brands are expected to follow soon.

Companies who have embraced sustainable business models earlier in the year have been thriving during the pandemic. Recent statistics show that E.l.f. Cosmetics have generated a 60 per cent surge of new customers - offering high-quality, vegan, cruelty-free, and inclusive beauty at an affordable price point.

“Gen Z consumers are looking to vote [with their wallet] for brands that care about the things that they themselves care about,” says CMO of E.l.f. Cosmetics, Kory Marchisotto. “The strength of our purpose has come up loud and clear from them as one of the features driving our success right now.”

A key player in the race for sustainability has long been held by the high-street brand, H&M, with their Conscious

collection - made of at least 50 per cent sustainably sourced or recycled materials. Despite facing backlash for their fast production cycles, which are the very antithesis of sustainable practice, Georgina Waltier, H&M’s sustainability manager in the UK, justifies the brand’s approach by saying, “we want to use our large size and scale to really drive systemic change across the entire industry”. Waltier explains, “we are investing in new innovations to bring more sustainable materials to scale, so [they] can be affordable.”

“Gen Z consumers are looking to vote [with their wallet]"

The brand’s strategic decision to keep on track with all its initiatives gave them a strong advantage at the start of the year. The Swedish retailer reported only a 10% loss in the fourth quarter (approximately 8% less compared to other high-street brands), positioning them well in the fight to recover in the industry market post-pandemic. Their ‘Conscious’ collection and the brand’s sustainability-focused values are their greatest advantage. A survey conducted earlier this year found that 67 per cent of consumers consider the use of sustainable materials as a purchasing factor, while 63 per cent also look at the way the brand promotes sustainability.

A recent study done by MSCI Index found that the COVID-19 pandemic vividly highlighted the intertwined nature of the world’s social and economic systems, showing that sustainable brands with higher environmental, social, and corporate governance (“ESG”) factors provide higher success rates in the long-term. With consumers shopping mindfully and cost-consciously, raising demand for sustainable and value-orientated brands, why aren’t more brands adapting the sustainable model?

Having suited their demands and preferences with the times, it is not enough for fashion and beauty brands to just sell high-quality and stylish products. Consumers look for brands who have values and make an impact on society; whether that’s environmental, social, or inclusive ideals, and they are willing to abandon the brands who do not represent and identify with their values.

Balancing the short and long term, is critical for sustainable investment, and finding that balance in the midst of COVID-19 is a real challenge. Businesses who have shown greater resilience against the pandemic implications have been those who demonstrated a nature of sustainable approach on a macro and micro level. The future of retail, fashion, and beauty past the pandemic remains unpredictable, but with the considerable increase of ‘eco' popularity and the rise of the sustainable consumer, maybe it is time for the major retailers and fashion groups to take note and reevaluate their business models to fit with the increasing consumer and society demand - if they want to adapt to the ‘new normal’.