The fast fashion model is characterized by what is known as a ‘see now, buy now’ model. This is executed by adopting a very short fashion life cycle that does away with the traditional seasonal fashion life cycles as traditionally adopted by the industry. In place of the traditional seasonal fashion life cycle is the two week fashion lifecycle, i.e. the the products and designs available in-store do not last any longer in than 2 weeks. This allows the brand a tremendous amount of agility in terms of responding to trends, customer feedback and demand.
This is done through a highly integrated system with strategic vertical and horizontal and vertical integration. This is done through a primarily offline retail model with a heavy emphasis on point of sales information collection. This in collaboration with fashion trend forecast companies like Worth Styles Global Network allows H&M to always be in trend and in line with customer demands. Demands that are are continuously met every two weeks. This collection of data is the first step in H&M’s supply chain. The next step is design, this stage is vertically integrated, with all products being designed in their design center in Stockholm, also known as the ‘White Room’. The next stage; manufacturing, is completely outsourced to over 750 partners across 20 countries. 60% of their manufacturing takes place in Asia (primarily India and China) with the remaining is Europe. All this, in two week cycles. Finally, with regards to their retail strategy; H&M follows an omni-channel approach with a vertically integrated physical retail strategy. These physical stores are located in fashion forward locations. Online retail is largely done through multi-brand retailers such as Amazon or Myntra.
This model has come under severe criticism for being unsustainable on many counts. The primary point of concern is that the entire model is built around marketing greater consumption at lower prices. Thereby increasing sales volumes and not sales revenues in comparison to other competing traditional fashion brands. This naturally has two unsustainable effects: greater stress on manufacturing and the emissions and usage of non renewable resources attached to those processes and an increase in wastes of consumption. These wastes are largely not recyclable and are hence relegated to landfills.
Thus, we suggest a sustainable alternative to this model, one with no compromise in the agility that comes with the current model. All keeping in mind the current measures taken by H&M towards sustainability.
Current Measures
Updating the product lines
H&M currently has one sustainability focused product line; ‘Conscious’. This is a product line whose products are manufactured with raw materials which are sourced from sustainable and organic sources (at least 50%). We recommend that more product lines with similar ambitions be introduced and move to introducing such manufacturing practices across all product lines.
Given the fact that the primary reason the fast fashion model is noted as being unsustainable, is its two week fashion life cycle model. We recommend that we move towards adapting the <H&M sustainable action plan> by adopting new sustainability focused product lines with variable life cycles. This ensures a sustainable framework that ensures that none of the agility of the current fast fashion model is lost. We recommend that the product lines and we recommend that these product lines be framed from the point of view of the fashion life cycles. Thus, the proposed product lines and their respective life cycles are:
- Basics – 1 year life cycles
- Conscious – Circular economy model, based on availability
- Divided – 2 week life cycles, based on a annual and two week manufacturing process.Will consist of the modification of grey goods
- Casual wear – 2 week life cycles, based on an annual and two week manufacturing process. Will consist of the modification of grey goods
- Modern Classic – Quarterly life cycle
- Premium Quality – Quarterly life cycle
Grey goods – shell clothing to be designed and modified post designing in regional manufacturing hubs. These will be clothes that can be manufactured and then designed after an indefinite amount of time. Example: a white tee shirt that can then be printed on later as per the prevalent trends. These will be sold as a part of the divided and casual wear collections. Grey goods will be designed on an annual basis on the basis of the most popular product categories, example:bomber jackets, tee shirts, balzers, etc.
Designing Process
The centralized design center in Stockholm will remain the sole design center for the entire operation. Design teams will however been divided into three, namely:
- Core Design Team: will be designing the annualized Basics, Conscious and grey goods product lines. These products will be available globally.
- Agility Design Team: These teams will be designing the casual wear and Divided product lines. The team will be in charge of designing the already manufactured grey goods as per the latest trends for the respective region of sales.
- Classic Quality Design Teams – Team will be responsible for the modern classic and premium quality product lines.
Manufacturing and Transportation Process
While the manufacturing partners and competencies will remain the same, there will be two primary changes made to the process:
- Establishment of Regional Manufacturing Hubs: These will be manufacturing hubs dedicated to manufacturing redesigned grey goods by the agile design team. These will be small scale manufacturing facilities which need only make modifications to the already manufactured gery goods. There will be a specific number of regional manufacturing hubs in each continent (as per requirements). This will minimise both costs and emissions related to shipping.
- Manufacturing Cycles: the manufacturing cycles will be changed and streamlined significantly to reduce the amount of waste from both the ends of the cycle; the consumer and the manufacturer. The manufacturing will now follow a quarterly shipment model as opposed to the earlier two week model. The only manufacturing process that will still work as per the earlier two week model is the regional manufacturing hubs. These will only be modifications to pre manufactured garments, and hence will be both cost effective and sustainable.
Finally, this will also greatly streamline and reduce the carbon footprint of the transportation process. As with manufacturing cycles shortened to 4 months, as will shipping cycles. The transportation structure will remain unchanged, the only modification being the shipment of the grey goods to the regional hubs.
Business actions to achieve in sustainable market:
Stitch – Stitch is a new product line offering pre loved fashion products such as clothes and other essentials. Stitch is the continuing of the story of a product, moving from hand to hand and living through seasons. It’s the weaving together of relationships. The brand merges the ideas of Cos and Arket bringing together a mix of well-made durable products that live beyond the season. Stitch is a thrift line that allows a platform for people to return utilized products in exchange for store credit and discounts on new products. This line appeals to customers who wish to return goods that have exceeded the season timeline as well as customers who wish to purchase pre-loved goods for a reduced price. This line aims to reduce the wastage of products that are discarded after a certain timeline. It moves towards a more sustainable option for consumers whilst also benefiting fashion forward consumers who have a need for the season’s trending products. This line draws attention to the innovative marketing keeping in line with the current trend to thrifted fashion. The line also makes use of the consumer-value marketing with the in-store credit system. The credit system is wherein goods that are given to the store are evaluated for damage, based on the damage a certain point score is deposited to the consumer. H&M goods would carry a higher point value in order to increase sales of H&M products. This would result in the formation of a cycle of production and return to H&M. Goods that are deemed irredeemable or not fit for use would be utilized in the Looop scheme.
In Looop – Looop is a garment to garment recycling process which helps transform discarded garments into new trending fashion products. This scheme helps create a complete cycle or ‘Loop’ that attributes value to the textile and prevents wastage. This unit also upcycles scrap material of each stage of the manufacturing process. The unit collects garments discarded by consumers in the stores as well as the scrap from manufacturing units in order to revamp and utilize it in the new lines of products that adhere to the current fashion trends. In select locations the unit will possess glass walls that allow the customers to experience and view their discarded garments be transformed into new products through a container-sized recycle machine. The machine would disassemble the old garments which are then cleaned, shredded and spun into new yarn. The yarn is then spun and knit to new garments. This is a part of H&M’s ambition to bring a climate positive change that also helps inspire the customers to believe in the longevity of the fabric and garments. The consumers would also be able to experience and become part of the process. The system does not utilize any water or chemicals which results in significantly lesser environmental impact than when producing garments from scratch. The scheme incorporates the society oriented marketing as it adheres to the need to reduce wastage through the production of fashion garments. It is also seen to incorporate a customer oriented marketing scheme as the scheme brings excitement by allowing customers to understand the workings of how a garment is produced. It allows the customer to experience and become part of the process.
“Clean by Design” initiative: This initiative will be a joint programme with the manufacturing company that solely focuses on reducing manufacturing wastes and innovatively makes the process more sustainable. “Clean by Design” aims to reduce water and energy use whilst avoiding the use of pvc (synthetic plastic polymer) within the brand. The usage of chemical free alternatives such as organically grown cotton, stone-free denim, items dyed with natural dyes and fibres made from recycled materials will furthermore be enforced in order to cut waste to the absolute minimum. This business action focuses majorly on the consumer-value marketing principle.
Fair trade: with the rising backlash of H&M’s use of low cost labour in countries like China and India along with the accusation of exploitation, H&M will engage in fair trade as a means of improving consumer value and at the same time indulging in the societal marketing principle. Fair trade aims at offering a worthy wage for all workers involved, as well as healthy workplace environments and social investment for the communities concerned. This Ethical Trading initiative aids in improving the human rights aspect of workers. To allow for more transparency and to gain the trust of the consumers, H&M will also produce annual reports for the viewing by interested stakeholders. Disclosing such information gives consumers an informed choice about their purchases.
Enforcement of Marketing Ethics: with every growing conscientious consumer, H&M will develop corporate marketing policies that include broad guidelines to be adhered to. This will cover various segments including distributor relations, advertising standards in order to avoid greenwashing, customer service, pricing, product development and general ethical standards. The enforcement of a sense-of-mission marketing strategy keeps the entire organization on the same path, the path towards sustainable marketing.
2020-10-19-1603128188