The war on waste: Why artificial intelligence is making the fashion industry greener
by Lars Rabe
Nobody likes a show-off, but when self-promotion spurs an industry on to improve communities and protect the planet we can all make an exception. That’s why the publication of the latest Fashion Transparency Index makes for such compelling reading.
Launched in 2017, the Fashion Transparency Index ranks retailers according to how open they are when it comes to environmental and ethical issues, and there’s no prizes for realising that the more transparent fashion brands are, the more sustainable they tend to be.
Why the big focus on the fashion industry? Well, the sector has historically been one of the biggest global polluters. It’s single-handedly responsible for 10% of global CO2 emissions, a quarter of all insecticides used and a fifth of the world’s industrial waste water.
The Fashion Transparency Index shows, however, that brands such as H&M, Adidas, Reebok and Patagonia are waking up to the environmental demands of consumers who want to buy ‘green’ and these brands are leading the way to a more sustainable future.
At RetailEXPO in London Giorgina Waltier, sustainability manager for UK & Ireland at H&M spoke enthusiastically about how the Swedish clothing giant has embraced ‘sustainability’ as an operational and marketing strategy, with a plan to remove any negative impact on the environment caused by its operations in the coming years.
“It’s not just about offering apparel recycling collection points in stores. We have sustainability embedded throughout our value chain,” said Waltier. “That means for every one of our 2,000 supplier factories we have a sustainability manager on the ground to ensure the facilities are being operated appropriately.”
H&M is among the Fashion Transparency Index leaders that have joined the ranks of companies harnessing the power of data and artificial intelligence (AI) to cut waste, increase customer-centricity and score a significant victory for sustainability within the ecommerce arena.
The online eCommerce challenge
Brands like H&M realise that when customers shop online there are a variety of additional challenges over and above bricks and mortar retail. The biggest challenge is that customers are unable to try clothes on, so in the absence of any retailer assistance they either take a chance on a garment and return it if it doesn’t fit a range of variables including size and style or buy multiple sizes and style knowing some will have to go back.
In fact, on average 40% of online purchases are ultimately returned. When customers ‘size sample’ like this (ie buy items in multiple sizes) the return rate can increase to over 50%. This is not only financially costly but there is also a high environmental price to pay. The additional logistics activity alone means significantly more oil is burned and extra CO2 is released into the atmosphere as goods are transported back and forth.
Brands that harness the power of AI and data can drastically cut this 40% return rate by ensuring their customers purchase garments and footwear that fit both their physical dimensions as well as their preferred style. Outdoor recreational retailer Moosejaw, for example, has used this approach to cut its returns rate as a result of size sampling by nearly a quarter (24%).
If the environmental case of AI wasn’t compelling enough, there’s also the fact that customers don’t want to be inconvenienced by the returns process. They want to buy garments and footwear they love and wear online, first time every time.
Making fashion supply chains greener
This quest for customer-centricity filters right through the fashion industry supply chain with brands now ditching the traditional ‘push’ model, which involves pushing new collections and trends onto consumers. This model ultimately results in waste if retailers and brands do not sell all of their inventory.
The alternative to the push model of supply involves the dynamic analysis of a wide range of data points such as weather forecasts, social media trends, local demographics and body shapes. The result is greater customer-centricity, higher sales conversions, fewer markdowns, inventory levels better matched to demand, better management of resources and less waste going to landfill.
AI and data have a key role to play in this new model, enabling retailers to better understand their customers’ shopping behaviour and product preference to reduce the chance of overproducing inventory and optimise product development, design and sourcing.
Green from the ground up
Of course, some newer fashion brands have been built from the ground up on the idea of sustainability and social responsibility, and they really walk the walk. Take TOMS, for example, which donates a pair of shoes to a disadvantaged child for every pair that it sells. So far, TOMS has given away 86 million pairs. It also offers shoes made from vegan, sustainable materials, such as hemp, organic cotton and recycled polyester. H&M also has its Conscious Exclusive collection, designed to reduce waste and made from sustainable, eco-friendly materials such as pineapple leaves, orange peel and algae.
There’s no indication that the sustainability spotlight will shift away from the fashion industry, especially eCommerce, anytime soon. If anything, it will continue to intensify. Consumers are aware of what’s at stake and brands are increasingly waking up to the commercial benefits of doing the right thing.
In the age of digital demand, retailers now have a clear opportunity to use data and artificial intelligence to better understand what their customers want and need and ensure they get the right products with minimum waste.