The retail industry is continually evolving. Retailers have grown well-equipped to handle change, but must continue to adapt with the changing landscape. Here are some key trends impacting the industry today:
With the Federal Reserve Chair’s recent remarks to push rates higher than previously expected, prices are rising across the value chain. At the same time, consumers have less money to spend – creating a delicate balancing act. Consumers are shopping more consciously, with value in mind and awareness about the environmental impact of their choices. Many argue it is time for fashion to slow down, i.e., move away from fast fashion to longer lifetime products. In theory, if products last longer, people will buy less new products. They might be willing to spend more upfront if a brand can provide true production transparency and services to extend the lifecycle of a product (such as repair).
Climate change & designing out waste
The climate change movement continues to play an important role in retail. Governments, stakeholders, and consumers are placing more pressures on brands to provide transparency about their environmental footprint. Statistics show that consumers would be far more loyal to a brand that can prove they are actively addressing environmental issues. It is no longer an option, but a need for brands to comply with ESG laws and regulations to consolidate and publish sustainability data.
One goal is to reduce or even eliminate waste in the fashion supply chain. It starts in product development to make sure collections are “fit to market,” and the products being developed align with what the market wants to buy. Secondly, planning demand across multiple sales channels is key for optimum sourcing, minimizing the risk of overproduction. In the production process, unnecessary waste of fabric can occur due to inefficient cutting or quality issues. The biggest waste factor is “deadstock” – any inventory left over at the end of season will either be marked down (impacting margins) or wasted, unless it can be recycled, resold, or taken care of. The idea is to move away from “take-make-waste” to something more sustainable.
Product passports (QR/serialization)
There are several reasons why product passports have been gaining attention: to provide transparency of a product’s lifecycle and prove authenticity. More and more products are being sold secondhand via resell platforms. But how can a consumer be sure they are buying the real thing? Product passports would require that a product can be serialized, or identified as a unique item, so the whole lifecycle from birth to end of life can be tracked, even through repairs or remakes. It’s interesting to imagine tracking all these steps, but with modern technology, this would all be possible by using QR codes and unique serial numbers.
Fashion and retail companies have long focused on the production supply chain from birth to sale of a product. However, the lifecycle doesn’t stop there. Unfortunately, we know the return rate of products remains high. This has a significant impact on the environment due to the transports needed – i.e., the return logistics flow is something to pay attention to. Can we avoid returns overall? If a product doesn’t fit a customer, does it always need to be returned, or can we offer different options to make the purchase worthwhile? Returns have become a norm in the industry, but it is a negative process overall – due to lower margins and impact on the environment.
As the industry continues to change, retailers and brands must question the norms and adapt. In the long run, retail will be more eco-friendly, customer-centric, and reisilient than ever.