Why Fashion Supply Chain Transparency and Traceability Matter?

When you purchase a new clothing, do you wonder who made it, how was the process and what was the true cost?

The fashion industry, in particular, is known for its “best-kept-secrets”, the manufacturing of fashion or middleman has never been an open book, which give businesses their competitive advantage. However, it is believed that the fashion players cannot play with this ‘normal traditional’ practices again in the future (if they still want to have a long-standing performance across the business.)

The Era of open information

The question will no longer be “should businesses adopt transparency?”, but “why is the transparency so important?”

In the Era of the internet and open source, it is easy to Google search for everything. Transparency is a competitive advantage for businesses and brands to build trust with their customers, by telling them who made their products, where does the material comes from and disclose the true cost.

2020 marks as the 7th year since the Rana Plaza collapse in Bangladesh, where over a thousand garment workers lost their lives and families. This triggered a global movement known as “Fashion revolution”, with the #whomademyclothes hashtag being used more than 3 million people. Unsurprisingly, mainly millennial demanding the transparency of the fashion brands and their clothes. According to the New York Times report, fast fashion brands such as H&M has dropped their profit 4 years in a row, due to the overproduction which worth USD 4.3 billion in losses. Predictably, they just announced to close 170 stores worldwide this year. This is a significant indicator to show that consumer buying behavior is changing – consumers consider the quality more than quantity, trying to be a conscious consumer. This is also an evidence of showing the new generation is moving forward to a constant fashion revolution.

Given the consumer demands for greater transparency through the value chain, we can see the three key dynamics (transparency, traceability and trust) in the coming period. This is why we as a consumer, needs to know our power – purchasing power to urge the brands further to take transparency and traceability seriously, which includes knowing where all the stages of the supply chain are.

There is no doubt that “sustainability” is no longer a trend, but a business imperative! However, why many brands or manufacturers still hesitating?

Mainly because our traditional supply chain was not designed to be transparent and traceable (for most of the industry); Moreover, there is no immediate return on investment (ROI) for investing in a transparent and traceable supply chain, even though the technologies are ready to be adopted.

Why transparent the true cost is important?

Most of the fast fashion brands they don’t just have a greenwashing problem, they also have an overproduction problem. In fact, over 30% of the clothes made annually are never sold, and 13 million tons of clothes end up in landfill. The reality is, many of us don’t concerned about the added cost of carbon pollution. To avoid waste, transparency is necessary not only to show the world how many wastes that companies produced, but also ring a bell for companies to reduce needless production to protect the environment.

More statistics and research show that the new generation is concerning the sustainable lifestyle, being a conscious consumer. Going forward, I foresee data influencing seriously affect the fashion brands to take their “real” sustainability performance. If the data is harnessed correctly, brands and customers will be able to calculate their carbon footprint of their supply chain and buying behaviors in the near future.

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