Why Small Brands Must Embrace the Green Economy

Image: Kaely Russel

The moral arguments for responsible fashion practices are clear. But slow fashion is fast becoming a financial imperative, too.

Published 17th February 2021 by Nicole Obidowski

The vast majority of those working in the fashion industry are well aware of the considerable negative impact that textile and garment manufacturing can have on both people and the planet. The argument for sustainable and ethical fashion is an increasingly easy one to make on moral grounds, with grim new statistics popping up in the mainstream press every week.

While sustainability for sustainability’s sake is both correct and logical (to borrow an oft-used saying; there is no fashion on a dead planet), sticking to a purely moral argument can be problematic in itself. While people may essentially agree, they can still draw different conclusions.

Small, independent designers, reviewing already very low profit margins and limited bandwidth, often conclude that they currently lack the resources to integrate sustainability into their business, deciding to revisit the issue later, after achieving a more stable level of profitability. Yet this logic is intrinsically flawed, as emerging designers now have a much lower chance of survival without first embracing sustainable design. It’s true that environmentally friendly materials and living wage manufacturing cost more, and sustainable design requires more time and effort – but these extra expenses are fast becoming required costs of business. Small brands who do not place sustainable and ethical practices at the core of their brand strategy risk getting left behind by others already embracing the opportunities of the green economy.

Image: Story MFG

Not Just a Trend

When environmental issues were first highlighted in more mainstream fashion spaces, some within the industry derided sustainability as yet another trend, one that would eventually disappear with skinny jeans and cold shoulders. However, since the deadly Rana Plaza Factory Collapse of 2013, and the popular documentary True Cost of 2015, public interest in sustainable and ethical fashion has continued to grow year on year.

This momentum shows no sign of abating, and it is difficult to envision a future in which consumers suddenly decide that they are no longer concerned about the environment. Climate change will continue to bring reminders of our dire situation, with catastrophic natural disasters expected to increase in severity and frequency. As with the Amazonian wildfires of 2020, or the Australian wildfires of 2019, unprecedented events will no doubt dominate social media and international news headlines in years to come.

As for concerns surrounding ethical manufacturing; those who have been in the industry long enough to remember continual but fleeting sweatshop scandals dating back decades could be forgiven for assuming that current interest in the welfare of garment workers will be another flash in the pan. Boohoo’s quick recovery in the face of this year’s modern slavery scandal adds further weight to their argument. Here is a measurable gap in current consumer sentiment and their actual behavior when it comes to ethical fashion. But how long can this gap last?

Recent breakthroughs in fashion activism, largely driven by social media campaigns, have successfully married ethical and sustainable fashion concerns, with most consumers now viewing the two issues as inextricably linked. This year’s BLM movement has highlighted the fashion supply chain’s colonial structure, and persuaded a new generation of consumers to associate cheap fast fashion with the exploitation of women of colour.

Those who disregard sustainable fashion often point to the continued success of highly unsustainable fast fashion businesses. However, multiple studies have pointed to the problem being down to a lack of education, rather than lack of caring. In one 2019 study, only 13% of UK consumers felt they could identify a brand that was actively seeking to reduce it’s environmental impact. Another study from the same year found that just 11% of consumers felt well informed on the social and environmental impacts of their clothing. Similarly, a lack of trustworthy and affordable ethical options is often cited as an excuse for continuing to support fast fashion brands with poor labour rights records. But as more brands embrace sustainable practice and supply chain transparency, fair fashion becomes more accessible, and increasing numbers of shoppers will finally be able to put their money where their mouth is.

No Longer Niche

Sustainable fashion is still viewed by some as a niche industry. Yet recent consumer surveys show that among shoppers, a preference for ethical manufacturing and environmentally responsible practices are now the majority view.

As highlighted in the State of Fashion 2021 report, published by Business of Fashion and McKinsey & Co., 3 in 5 consumers now view a brands’ promotion of sustainability as an important factor in their purchasing decisions. Similarly, a 2019 study by Ipsos Mori found that 55% of Britons say they would be put off buying clothes from a company that polluted the environment in its manufacturing processes.

In another survey by Globescan, 67% of U.S. and 80% of U.K. consumers said they had stopped purchasing a company’s products when the brand didn’t align with their views on certain issues. And a 2019 survey by McKinsey & Co. found that 70% of consumers are willing to pay a premium of up to 10% on sustainable products.

These survey responses are not simply virtue signaling. They are being borne out in company’s bottom lines. A remarkable 50% of sales growth in consumer goods from 2013-2018 came from sustainably marketed products, even though such products only made up 17% of the market. Looking at the figures, it could be argued that non-sustainable fashion is about to become the niche industry.

Gen Z Takeover

Among other notable milestones of 2020 was one that you may not have heard of, yet it sets the stage for considerable change in the decade ahead. In 2020, Generation Z became 40% of the consumer population, and combined with Millennials now makes up the considerable majority of consumers worldwide.

Roughly aged 10 – 40, these demographics consistently demonstrate an even higher interest in social and environmental issues.  Gen Z in particular are driven by values and ethics, with 68% identifying that doing their part to make the world a better place is important to them.

Brands who can authentically embrace sustainability and ethical practices are rewarded by Gen Z and Millennial customers. According to Nielsen research, 3 in 4 state they are willing to pay extra for sustainable products, and place sustainability and social values as top purchase drivers.  

In another study, 62% of Gen Z respondents stated a preference for buying from sustainable brands, and a recent study of UK consumers found that among those aged 25-44, 11.5% claimed to only purchase clothing from sustainable brands. That number rises to 16% in men 25-44: a figure that should be noteworthy for British menswear brands who don’t fancy alienating 1 in 6 shoppers from their main demographic.

Understanding your customer is one of the most basic tenets of retail, and as Gen Z and Millennials continue to take up more and more market share in the years ahead, brands who do not authentically embrace sustainability will be placing themselves sharply at odds with the majority of shoppers.

Image: Mango (Instagram)

Small Brands Do It Better

Rather than try to compete with fast fashion on their terms, emerging designers are much better off leveraging those few opportunities that are unique to small businesses. Sustainable fashion is one such opportunity, offering small independent brands a considerable competitive advantage over multinational corporations.

The State of Fashion 2021 identifies circularity as a major disruptor of the fashion industry for the decade ahead. Yet the report also reveals what a struggle it can be for big fashion brands to integrate genuine circular practices into their businesses at scale. An interview with H&M Chief Executive Helena Helmersson exposes the organizations repeated failure to meet living wage commitments, and their inability to explain how mass consumption can ever truly be sustainable, despite their reputation as an industry leader in “responsible fast fashion” (a term deemed by many to be an oxymoron). Rival fast fashion retailer ASOS recently came under fire for creating a “circular” collection that turned out not to contain a single truly circular item, not least because the company doesn’t even operate a take-back scheme.

Small independent brands have a clear competitive advantage here. The circular economy is not in contradiction to their very existence, and implementing circular practices such as pre-order, repair, resale, upcycling and take-back schemes are much easier at a small scale. Fast fashion brands have dipped a toe in all of these areas for good reason – it is lucrative. 59% of Gen Z and 57% of Millennial customers are already purchasing upcycled products, and the resale industry is growing hand over foot, with online resale in particular set to grow 69% between 2019 and 2021. Yet, due to the size and structure of their businesses, fast fashion is not only unwilling but also fundamentally incapable of doing more than dabbling in these markets.

Recent social justice movements such as BLM have highlighted another handicap of multinationals. With 94% of Gen Z and 87% of Millenials agreeing that companies should publicly address urgent social and environmental issues, brands cannot afford to stay silent. But here again, big brands have struggled to respond to the modern consumer’s expectations. Large corporations are not designed to have opinions – they are designed to return profits to their shareholders. Because of this, value statements released by big brands often sound hollow, vague and inauthentic, as the company attempts to appeal to as wide a base as possible. At the same time, younger consumers have become notably savvier than older generations when it comes to detecting greenwashing, wokewashing, and other false marketing tactics.

Small brands, on the other hand, are better positioned to naturally and authentically communicate their values on a wide array of social issues with their customers. Furthermore, they have space to make mistakes and learn from them, while consumer expectations of large companies with ample resources are understandably higher.

Image: Cawley

Sustainability is not easy; it requires extensive research, and may sometimes come with some creative limitations. However, the opportunity inherent in the green economy is not something that small independent brands can afford to miss. What seemed like niche ideas a few years ago have already become etched into the mainstream. By embracing these values early on, emerging designers stand to gain not just a more passionate and loyal audience, but a wider one too.

Looking for help setting up your sustainable fashion business? Make sure to check out our freelance and consulting services!

about * freelance services * consulting + mentoring * blog * contact