Fashion Forward
Entrepreneurship

Fashion Forward

Asha Tanwar, Entrepreneurship Editor

Asha Tanwar (MBA ’21) explores the concept of sustainability in fashion.

It is a fact widely acknowledged that certain characteristics of the fast fashion industry, in its current form, are harming our planet. But few people know that fashion-related waste is the second-largest polluter in the world, after the oil industry.

One person who is close to the epicenter of the change and innovation happening within the fashion industry is Joan Cheng (MBA ’02), Managing Director of The Business of Fashion in North America. The Business of Fashion was founded by Imran Amed, also an HBS graduate, in 2007, and is now an “essential daily resource for fashion creatives, executives and entrepreneurs in over 200 countries.”

The company delivers “fashion business intelligence on emerging designers, disruptive technologies and global brands that are making their mark on the industry at a time of unprecedented change,” and Cheng has agreed to talk to me about some of the trends and changes she is hearing about and noticing in the world of sustainable fashion.

“Yes, waste from fast fashion can be a problem when it comes to sustainability, and despite a number of different approaches being taken by start-ups to solve this problem, I have not yet come across a start-up that has unveiled a comprehensive solution that deals with the crux of the recycling problem,” Cheng explains.

“It can be extremely expensive, and hence inefficient from an operational perspective, to deconstruct clothing fibers to make them reusable. Therefore, fashion sustainability has focused primarily on the relatively simpler problem of reducing the amount produced.”

One way in which companies are using technology for this purpose is increasing the ability of companies and designers to predict trends and customer preferences, and supply on-trend clothing that closely tracks expected demand. 

A recent example is H&M, which in January this year hired Christopher Wylie, the whistle-blower who exposed the Cambridge Analytica scandal and who presented at The Business of Fashion’s VOICES, an annual gathering for big thinkers, last year. Wylie is hoping to help the Swedish fashion retailer utilize data analytics and artificial intelligence to better understand what its customers want. Better predictions could help lower the inventory levels that retailers are required to maintain, and hopefully reduce waste as a result.

Cheng notes that industry experts believe the world of fashion is moving in the right direction on this. “This is an exciting opportunity. Companies that have access to high-quality data are often using it to reduce waste—it makes financial sense and has a considerable ethical impact. It will be interesting to see whether they can really make this a core part of their business proposition.”

Indeed, Forbes notes that when predicting sales, “AI-based approaches for demand projection … can reduce forecasting error by as much as 50 percent,” and several companies that use this as their fundamental business model are now cropping up. A frontrunner in the space is Stitch Fix, another start-up founded by an HBS graduate, which relies on algorithms to narrow down recommendations that are served to a personal stylist. Stitch Fix now has a market capitalization of $2.35 billion and continues to grow.

Also combating sustainability within large companies is a different technology: blockchain. Blockchain news website CoinDesk earlier this year noted that LVMH had invested in a blockchain project, codenamed AURA, which will “provide proof of authenticity of luxury items and trace their origins from raw materials to point of sale and beyond to used-goods markets” in its initial phase. Following a successful outcome, the next phase of the platform will “explore protection of creative intellectual property, exclusive offers and events for each brand’s customers, as well as anti-ad fraud.”

“Authenticity can be a real issue for brands,” Cheng says, “and companies like LVMH are investing in this to make resale a more real prospect for those who would be willing to purchase second-hand goods if there was a guarantee that they were getting the real thing.”

Increasing the market for resale and second-hand clothes can go some way to reducing waste, but blockchain, machine learning, and artificial intelligence have not quite solved it yet, as changing trends often overpower AI capability, and quite often the 2D data collated by machines do not translate nearly as well into the 3D realm, which Original Stitch, a start-up aiming to turn digital designs into physical garments, is finding out as it pivots to focus on the longer-term return strategy. The future of machine learning within the fashion industry remains one to be closely watched.

We briefly touch on other key trends sweeping the world of fashion technology, and I ask Cheng about what she’s seeing in the world of fashion rental companies and the ways in which they are focusing on the industry’s sustainability goals. 

“The general sentiment is that rental would be unlikely to take over 100% of everyone’s wardrobe, which means the companies in this space are targeting the same piece of the pie. Rent the Runway is obviously the dominant player, but given their recent logistical issue,” Cheng says, referring to the recent incident when the company installed a new system to handle inventory at a New Jersey warehouse, which led to a number of delayed or missed deliveries, “there could be an opportunity for new entrants.” As innovation in this space continues, the apparel leasing market in the United States is expected to reach $4.4 billion by 2028, according to GlobalData.

For aspiring entrepreneurs in the fashion technology space, Cheng indicates that it’s possible that a large portion of direct-to-consumer online brands have likely pushed the communication and engagement model to its limit and need better information, which can be obtained from having a retail presence—so brick and mortar is not really dead.

“To have an edge in the market, start-ups and companies seek to understand what people are buying, how they are buying and how they are making decisions before figuring out where the gaps in the market are. It has become that much more about behavioral analysis in tandem with following and predicting fashion trends.”

 


Asha Tanwar (MBA ’21) is from London. Prior to HBS, she worked in investment banking before switching to a supply-chain logistics startup. She was once training to become a professional ballerina, but she changed her mind on that pointe.

December 5, 2019
Want to Sponsor The Harbus?

You can sponsor the Harbus website to reach the Harvard Community. Learn more.

RECENT COMMENTS
FlICKR GALLERY
THEMEVAN

We are addicted to WordPress development and provide Easy to using & Shine Looking themes selling on ThemeForest.

Tel : (000) 456-7890
Email : mail@CompanyName.com
Address : NO 86 XX ROAD, XCITY, XCOUNTRY.