November 3, 2022

How Retail Brands Can & Must Increase Sustainability



Mary Saunders
Head of Finance and Operations

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One of the most beautiful things I’ve observed over the 18 years I’ve worked in the fashion industry is the evolution of a customer voice that now shouts for choices that are better for the planet. This voice is loud, it’s meaningful and it’s powerful. It is the force that will push brands towards greater sustainability, because what the customer chooses to buy dictates what a brand chooses to make.

Achieving Sustainability is a Challenge

Certifications & Higher Textile Costs are Obstacles

The difficulty for brands is that there is not a guarantee that customers will pay substantially more for sustainable products that take more time and expense to create. For example, the difference between the cost of organic and regular cotton in 2021 was nearly 3X. This translates into roughly an additional $1 for a basic t-shirt, and more for products that require more cotton like sweats and dresses. In an environment of inflation and pending recession, that dollar matters to many shoppers.

Further, if brands seek certification of their products, that also costs money (and extensive employee time) that needs to be passed along to customers. And many certifications are only for single items, which means it’s impossible to certify hundreds of new items per year. The fact is that brands want and need to serve their customers, and they generally want to become more sustainable - but the path is onerous and expensive that it becomes difficult to do so. 

Inventory & Waste

Approach Sustainability Issues as Business Opportunities


Many customers yell, “Just make less!” But, this is at odds with the mechanics of the retail industry. Retailers invest in inventory in advance of sales, making educated guesses about what customers will want to buy. They produce a cowl neck sweater style for $30 and sell it to you for $30 + 60%. It’s how they cover their operating costs (and hopefully make a margin as well!). 

Despite their best efforts, retailers are always going to be wrong. Maybe a style doesn’t execute in production as intended, what was a big seller last year slows down this year or that bizarre fashion style (are people really going to wear capes?) may sell far more than anticipated. As such, this method always leads to waste.

So, what if retailers could get even marginally better at predicting and managing inventory? This doesn’t cost anything, but could save so much. Consider, for example, that Macy’s has $3.8 billion of inventory on its balance sheet. A mere 1% reduction in total inventory would mean more than 3.5 million fewer items in circulation, which would drastically cut down on waste. Implement this in all fashion brands around the world, and we would see an enormous reduction in waste and boost in sustainability. 

Doing Your Part

Getting on Board with Inventory Management

Given the potential impact of optimized inventory management on sustainability, I believe Toolio is a sustainability company in addition to being a tech company. We must attack climate change from every front. Investing in better inventory management, which leads to less waste, is one great way to do that. View a demo of Toolio today, to get started.

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