Report Shows Customers Want Responsible Fashion, But Don’t Want To Pay For It. What Should Brands Do?

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A new report from e-commerce personalization platform Nosto showed that of 2,000 U.S. and U.K.-based shoppers surveyed, sustainable practices and fair wages for workers were top consumer demands for modern fashion retailers.

It also showed, however, that shoppers don't always want to pay for the extra costs associated with them.

The report revealed that while 52% of consumers do want the fashion industry to follow more sustainable practices, only 29% of consumers would pay more for sustainably-made versions of the same items. Additionally, 62% of consumers would like to receive discounts on sustainable clothing items.

There appears to be a disconnect between the idea of sustainable fashion and where consumers, especially of younger generations, actually spend their money.

Data from a report by ecological certification company Oeko-Tex illustrated that while that 69% of Millennials say they look into claims of sustainability and eco-friendliness when researching clothing purchases, only 37% actually bought clothes from brands with that focus.

With this in mind, it’s no surprise a new report showed sustainability efforts in the fashion industry are slowing down as a whole. However, some clothing retailers have discovered a more sustainable approach actually helps solve business problems, albeit with some trade-offs.

Clothing brand Christy Dawn is pushing ahead with eco-friendly efforts and ethical labor practices, undeterred by the implications. For the Los Angeles-based clothing company, which creates short-run editions of women’s apparel items from deadstock fabrics, it was a rocky start with quality control issues that made them lean fully into responsible fashion.

“When we were first getting started, we learned quickly you get what you pay for,” said Aras Baskauskas, Christy Dawn’s cofounder. He explained that when they initially tested production with a lower-cost team, the product suffered. In the end, they decided to pay about 35% more for a small team of four who were more expensive, but delivered much higher quality products.

Baskauskas went on to say that since then, the team of four has grown to a team of about 30, which works on-site at the company’s headquarters in downtown Los Angeles. The production team has a clean and safe working environment, is paid fair wages, gets paid vacation time, and is provided healthcare benefits.

The only downside of these efforts: Margins are smaller. For Christy Dawn, this is a reality they’ve accepted and now embrace. With their average cost per item averaging $80, their 3X markup puts them in the $220 retail pricing range. “Many fashion retailers strive for 8X margins, but we’ve made a conscious decision to run an ethical business and to keep our costs lower for customers,” Baskauskas said.

While the use of deadstock fabrics means they do miss out on economies of scale, Baskauskas explained this approach also helps them stay agile and able to release new, limited-run products every week.

Other fashion brands experiencing rapid growth have different hurdles to face as they work to maintain ethical labor and sustainability practices.

With Jéan, a two-year-old Australian fashion brand with a Bali-based production team, found itself growing from 400 units sold to 14,000 in just a few weeks.

With the rapid spike in growth, cofounders Evangeline Titilas and Sami Lorking-Tanner knew their production model needed to evolve quickly. While their small team in Bali included a few team members working from the comfort of their own homes, they now needed a central hub where a larger production team could work together as a group for the execution of fabric processing, sewing, quality control, and packaging.

In a few months, they were able to open a new worksite in Bali and to grow the production team to 60 employees, all of which are paid above-average wages. The two 26-year-old female founders now visit every other month for four weeks at a time to work alongside the team.

So how have they managed to scale so quickly and stay devoted to sustainable and ethical practices? A smart sales strategy has helped. As a direct-to-consumer brand, they roll out four small product ranges per year, but focus mostly on their perennial, best-selling styles.

“It's an extremely effective model that breaks from the traditional model most fashion labels use, which includes creating large collections throughout the year and then selling/distributing and discounting at the end of the product life cycle,” said Titilas. “For us, we only introduce small, trans-seasonal ranges. We're breaking away from the linear traditional fashion system of take, make, and dispose.”

The strategy is working so far: The brand often sells out of the perennial styles and has had a wait list of over 1,000 people who’ve signed up for updates on restocking of a single product.

Sustainable approaches are working in these two use cases, but we still have to consider what this means for the industry as a whole. What are fashion retailers to do? Should they rise to meet these consumer demands and risk the gamble of customers not buying into sustainable practices, or should they continue to conduct business as usual?

Fashion consultant Nicole Giordano of StartUp Fashion recommends that when considering an approach to more eco-friendly efforts, brands should first zero in on the values they hold as a company. From there, they can find ways to implement sustainability related to their core mission rather than trying to accomplish all of their goals at once.

“You can always add more components of sustainability as you go, but if brands try to do too much from the start, they run the risk of hitting too many obstacles and giving up on their businesses...especially if they’re self-funded,” she said.

Progress, be it large or small, is good news when it comes to sustainable and ethical practices in the fashion world.