Students from EADA Sustainability Club have been speaking to a range of professors and experts from the EADA community to discuss how we can learn about COVID-19 and what this means for sustainability & business. In this mini-series, we are exploring how the role of business in society is shifting and adjusting to these unpredictable and complex times, covering topics from digital data technology, emotional intelligence, to global governance. This week, Dr. Federica Massa Saluzzo shares her thoughts on future of the fashion industry.
Federica Massa Saluzzo received her bachelor in Business Administration from Bocconi University, her Ph.D in Strategic Management from IESE Business School, and her post-doc from the University of Bologna. She joined EADA in 2016 where she is a professor of strategic management. Before entering academia, she worked as a strategy consultant. Her research interests include social value creation, sustainable fashion and social innovation. In light of the pandemic, she sat down to discuss the changing tides in the fashion industry and how each actor is differently affected by COVID-19.
The Future of Fast Fashion Retailers
Beyond teaching empathetic strategies, Dr. Massa Saluzzo has a research focus in sustainable fashion and innovation and was recently selected as a judge for the European Social Innovation Competition in reimagining fashion. Massa Saluzzo discusses how COVID-19 is a challenging time for fashion retailers. The fashion industry is very segmented (fast fashion, boutique brands, medium brands, etc.) and this crisis is hitting each actor very differently. For example, Massa Saluzzo describes how some multi-national retailers such as Primark did not pay their manufacturers for completed orders. This decision might have seemed reasonable considering stores have faced international shutdowns and sales have dropped significantly. However, these aforementioned manufacturers (i.e. factories in Vietnam and Bangladesh) are the factories with cheap labour and low power who cannot afford to absorb these costs. Not paying the manufacturers will have long lasting effects on the fashion supply chain. After so much criticism, Primark eventually decided to set up a fund to pay the wage of the workers.
In Saluzzo’s opinion, COVID-19 can pose two potential outcomes. First, fast fashion retailers could protect themselves by cancelling orders and payments to their manufacturers. This results in factories going bankrupt thus creating less supplier options for retailers. The scarcity could then drive up prices and could potentially cause the fashion retailers to reconsider their current model. However, Massa Saluzzo discusses a second scenario where retailers can pay their manufacturers in this time to keep the factories afloat. This is what Primark ultimately decided to do. By salvaging the retailer-manufacturer relationship, retailers will help factories survive, maintain their cheap labour, and the industry can carry on as business as usual.
It is difficult to predict what to expect from the fast fashion companies during COVID-19 but what Massa Saluzzo believes is, regardless of the outcome, the big brands have the cash to survive this crisis.
Dr. Massa Saluzzo discusses another particular trend she is witnessing in fashion. In order to stay competitive and advanced, fashion retailers are creating “virtual garments,” a movement where designers can now virtually paste outfits on models. This trend is being spotted on Instagram where influencers are being styled from a computer and “wearing” clothes they have never seen, touched or worn before. Virtually pasting clothing can lead to more design innovation without brands blowing a budget and in turn, produce less waste. In keeping with digital trends, some brands are now investing in virtual look books. Rather than shopping in store, consumers can now examine potential outfits in a 360 perspective from the comfort of their own homes.
This transition will incentivize online shopping and deter shoppers from going to physical retail spaces. Another trend that could affect supply chains is the rise of 3D printing garments. In an effort to manage risk and shorten global supply chains, fast fashion brands are now considering alternatives to traditional production lines. Although these trends have previously begun to develop, COVID-19 might propel the momentum even quicker. The fashion industry is embracing the new world and soon we might see considerable changes.
Sustainable Fashion Producers
A significant consequence of the COVID-19 crisis in the fashion industry is the negative effect it will have on sustainable fashion producers. Dr. Massa Saluzzo fears that many of these smaller brands are going bankrupt leading to fewer sustainable fashion retailers. Massa Saluzzo admits, “Primark will survive. H&M will survive but small, artisanal producers may not.” This comes at a time where consumers crave more sustainable alternatives in the otherwise polluting and unsustainable fashion world. These small sustainable fashion producers stand less of a chance to remain competitive after COVID-19 as they also do not have the capability to change their production lines and supply chains to reflect new trends (as mentioned above). Furthermore, all knowledge-sharing concerning sustainable fashion is postponed: the meetings, the summits, the conferences, the design challenges are all suspended. COVID is now the crisis and the economy is the priority.
Advice to Students?
So, where does that leave us? Hopefully, the future will bring more collaboration between private and public sectors and consumers will put pressure on their institutions. Beyond holding out for hope, Dr. Massa Saluzzo appeals to students by explaining the importance of social entrepreneurship to tackle and engage in these issues.
About the author
Izzy Ahrbeck is a German/Canadian student currently enrolled in the International Master in Sustainable Business & Innovation and is one of the leaders in the EADA Sustainability Club. She has lived and worked in in 8 different countries including Canada, Japan, France and Switzerland, and is passionate about seeking the truth and giving a voice to the less heard.
About the interview series
In this series of interviews, contributors to the EADA Sustainability Club Newsletter explore how the role of business in society is shifting and adjusting to these unpredictable and complex times with COVID-19, covering topics such as digital data technology, emotional intelligence and global governance. Other articles include: Back-to-basics with Associate Dean Jordi Diaz, Managing the transition with with Joan Miquel Pique, Technology as an “enabler” with Richard Ferraro, and The Challenge of Ethical Leadership with Professor Ferran Velasco.