Global Responsible Production. There’s old news and new news here. Brands and retailers have a need to know. That’s old news. Consumers have a desire to know. That’s new news. In concert, these two points mean that in today’s marketplace, brands and retailers need to know and they need to share.
The Need to Know. As far back as the 1980s, major brands and retailers realized the importance to their reputation, hence their revenues, profits, and share price, of knowing how, and by whom their product is made. Though old news, that realization is even more relevant in today’s age of 24/7 news feeds and changing consumer attitudes. The relentless speed and spread of information sharing has reinforced brands’ and retailers’ need to know the conditions under which their clothes are made.
The Desire to Know. There is also a growing force that brands and retailers must both acknowledge and accommodate: a desire to know. Consumers have developed a voracious appetite for information — accurate or not ― about the brands they and their friends shop. Evidence points to many consumers’ desire for insight to inform purchase behavior that aligns with their personal values.
Increasingly, individual and brand values are consumption drivers. An A. T. Kearney NPD Survey of 1,750 respondents revealed 23 percent of Gen X, 24 percent of Millennials, and 25 percent of Gen Z respondents report actively looking for brands and retailers that do good for the world. More importantly, in a world where most brands and retailers have been reduced to competing on ever-deeper discounts, 30 percent, 25 percent, and 26 percent, respectively, of those same respondents reported avoiding brands and retailers if the respondent finds the brand or retailer has done something the respondent disagrees with. In short, more than 50 percent of the respondents born between 1965 and 2014 reported purchase behavior grounded in a potent combination of moral values and available data. With roughly 190 million Gen X, Millennial, and Gen Z consumers born in the United States from 1965 to 2014, that’s a lot of potential garment sales at stake.
In strong support of this argument, Michael Dart and Robin Lewis (Retail’s Seismic Shift. How to Shift Faster, Respond Better, and Win Customer Loyalty. 2017) identify “the emergence of a new attitude toward material goods, marked by a greater emphasis on experiences and meaning.” While the pair say that will translate into a shift in spending from products to experiences, they also point to “a search for greater levels of meaning and self-actualization in people’s relationship to products and service.” In other words, purchases grounded in values. Dart and Lewis further posit that the 80 percent of consumers who are financially better off — i.e. consumers better able to pay non-discounted retail prices ― will “seek higher and higher levels of emotional satisfaction in their daily lives.” Brands and retailers know from experience that cognitive dissonance arises when a consumer admits a purchase does not meet her/his personal values. That dissonance in turn leads to increased returns and lower overall satisfaction with the brand or store.
Anecdotal stories also support the A. T. Kearney NPD data, and the Dart and Lewis assertions. Recently one of my university students volunteered, unsolicited, that she and her friends intentionally avoid shopping fashion brands they believe use factories that don’t treat their workers well. She stated they do their best to research brands’ suppliers’ practices, but reliable information is scarce. She went further to say she and her friends want well-made clothes and will pay more for quality clothing made under proper conditions. Their great frustration, she said, is the lack of brand transparency and absence of credible information about conditions under which many brands’ clothing is made. Another student added, “the information is not well-advertised. So, when I don’t know, I can’t consider it. Then I just buy based on lowest price.”
Empirical evidence I have gathered in other discussions with Gen Yers (born 1995 to 2014), strongly supports the hypothesis that younger consumers want to know more about where and under what conditions their clothes are made. When queried, their self-reported behavior did not always match their self-reported attitudes, but they also reported frustration with an inability to find clear, trustworthy information about the manufacture of the clothes they consider purchasing. In that void, they, too, report basing decisions on word-of-mouth, or more frequently, on price. Word-of-mouth is only as good as its source, and deep-discounting destroys margins. Neither of these serve brands or retailers well. A lack of credible information about how clothes are made pushes consumers to base purchase decisions on price.
The Need to Share. It is becoming clear that an important lever for unlocking higher-margin retail sales to the consumers Kearney, NPD, Dart, and Lewis describe, and for my students and me, is easy access to credible information about the conditions under which clothing under consideration is made. When guest speakers and/or I present the topic of compliance to my university students, two questions always arise: why don’t brands advertise whether their specific suppliers adhere to international workplace standards? Why don’t they name names? The answers to those two questions are complex, and deeply mired in legal advice, but they are on consumers’ minds.
Despite consumers’ desire to know, few American brands publicly list the factories they use; notable exceptions include Levi Strauss, GAP Inc. and Patagonia. Though stopping short of sharing a factory list, Eileen Fisher posts detailed information and photos about its supply chain and production processes. The point is, a growing number of consumers want to know how their clothes are made, but few brands, retailers, suppliers, or certifying firms report it.
A list of factories alone sheds little light on the conditions under which clothing was made. But when used in concert with factory certification lists such as the one posted online by WRAP (Worldwide Responsible Accredited Production), and/or in combination with investigative news reports published by independent media, such lists become insightful for consumers interested in looking beyond word-of-mouth to ascertain the conditions under which their clothing has been made. Transparency begets honesty which builds trust.
Trust comes from transparency. If trust comes from transparency, how does a brand or retailer create transparency? Transparency needs a combination of a willingness and an ability to open a supply chain to scrutiny. It comes from a digitally connected supply chain that enables track-and-trace production, with visibility to brands’ and retailers’ partners, and the brands and retailers themselves. Enis Gezgin and colleagues Xin Huang, Prakash Samal, and Ildefonso Silva at McKinsey & Company suggest examining data, analytics, software, hardware, talent and processes when assessing the supply chain for the digital transformation that will provide the track-and-trace visibility today’s consumers want.
More specifically, they advise asking whether a company collects and generates all the data needed to enable a digitally transformed vision of the supply chain, and whether the data are stored in a manner that makes it easy to access and use. I would go a step further to ask whether the data are also shared in a way that enables consumers to choose higher margin clothing based on personal and brand values that reward companies for responsibly produced clothes. When it comes to the data that drives transparency, brands and retailers would do well to capture it, own it and share it. They would do well to fulfill the need to know, the desire to know, and the need to share.
Margaret Bishop is a global consultant to the apparel and textile industry and she teaches at New York City’s leading fashion universities. She is also a member of the International Advisory Group at Worldwide Responsible Accredited Production (WRAP). She can be contacted at [email protected].