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Sustainability in the fashion industry

November 12, 2018
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Some routines are so automatic that we have stopped questioning whether we are carrying them out in correctly or not. Buying clothes is one of these routines. Some of us love clothes shopping and go as frequently as possible; others dislike it and try to delegate all of their shopping needs to someone else. And, there is yet another group of people who approach the demands of clothes shopping by purchasing online. Whatever your approach to shopping, the purchasing of clothes is a natural activity; we all need clothes.

According to Dr Federica Massa-Saluzzo, striking the balance between company interests and sustainability is always a challenge.
According to Dr Federica Massa-Saluzzo, striking the balance between company interests and sustainability is always a challenge.

Automatic behaviours like these don’t go unnoticed by corporations: for example, the fashion industry exploits these behaviours in a major way. According to a report published by McKinsey & Co., the fashion industry is one of the few success stories of the last decade – it has grown at an average of 5.5% annually, and according to the Fashion United report, the total value of the global fashion industry has already reached 3 trillion USD$, making up 2% of the world’s Gross Domestic Product.

Automatic consumer behaviours don’t go unnoticed by corporations

A growing awareness

An increasing segment of actors, both from within and from outside of the fashion industry, have begun to create a renewed interest and awareness in this industry. Awareness can be a powerful engine for industry evolution: for example, the food industry has been profoundly shaken up by the recent increased awareness of the risks of a poor diet. This had led to companies and retailers all over the world updating what they have on offer to include organic and locally-sourced food in their portfolios.

But awareness is a tricky concept. One of the goals of faculty members in business schools is to guide their participants to understand how multiple industry actors react to the shock created by “renewed awareness” in an industry previously dominated by automatic behaviour (such as the fashion industry) and respond strategically to it. For instance, a company that has operated in the fashion industry as a traditional actor, growing both organically and non-organically to pursue higher profits, must be prepared to respond strategically to new industry actors. Many of these new actors will have entered the industry with a value proposition that openly condemns the traditional profit growth model. Last month, EADA was pleased to bring these issues to the forefront with a conference entitled “The dilemma of sustainability in the fashion industry”.

Striking a Balance

Striking the right balance between company interests and sustainability is challenging. While both speakers acknowledged the importance of sustainability, they seemed to imply that their individual takes on the issue had favoured the overall strategy of their companies, strategically picking and choosing aspects of the “new awareness in fashion” to adopt and apply. This picking and choosing is a uniquely valuable skill for managers to have because it not only encourages a coherent image of the company, but also –and this is critically important– enables the company to carve out a clear position within an industry. Since differentiation is so important in fragmented industries like fashion, having a clear and differentiated position is fundamental.

Article written by Dr. Federica Massa Saluzzo of the Strategy, Leadership and People Department.

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