Bamboo Rose Blog | Retail News

Is Sustainability Built Into Your Business Strategy? Here’s Why It Has To Be.

Key Points:

  • Sustainability can no longer be a marketing tactic – incoming regulations will make it a real business cost for apparel retailers
  • A hybrid of consumer and regulatory pressure will require environmental and social governance (ESG) to be integrated into all business processes
  • Retailers need an intelligent costing solution to support material transparency in a sustainable world
  • A multi-enterprise approach to sourcing will align suppliers with your organization’s ESG vision

In recent years, companies have used the term ‘sustainability’ as little more than a PR buzzword. Greenwashed marketing campaigns allowed retailers and brands to penetrate a specific customer demographic, garner positive press, or scratch the ideological itch of a particularly passionate board member.
 
Sustainability was all about appearing to care about the environment rather than actually taking steps to develop, source, produce, and package environmentally-friendly products.
 
But the retail industry is changing – now, regulatory bodies and associations on both the legislative and industry level are pushing companies to source, develop, package, and distribute products with sustainability at top of mind or face additional taxes and fees.
 
Internationally, consumers and regulatory bodies expect even more from retailers, and the stakes will only get higher: the England Waste Prevention Programme is currently taking sharp aim at the textiles industry. Government and industry stakeholders are drafting proposals to set minimum standards for clothing durability, recycled content, and circular supply chains.
 
Industry insiders expect that initiatives like these – combined with the growing uproar from consumers against fast fashion – will put retailers’ feet to the fire to implement truly impactful ESG initiatives sooner rather than later.
 
Problems with product durability are already under scrutiny for retailers and suppliers of appliances, with Right to Repair legislation active in 14 states as of 2021.
 
This legislation mandates that original equipment manufacturers provide consumers and independent repair businesses equal access to repair documentation, diagnostics, tools, service parts, and firmware to extend the lifespan of refrigerators, stoves, and other appliances.
 
The times of built-in obsolescence are over, and governments and consumers alike are holding manufacturers and retailers accountable for the appliances filling landfills all over the world.
 
Make no mistake: as an apparel retailer, sustainability regulations like these will impact your industry. Presently, 21 billion pounds of textile waste fills landfills every year in the US alone.
 
With the apparel industry singlehandedly causing an environmental crisis, consumers and governments will take actions to reduce textile waste and ensure longer product lifespans.
 
Consumer preference will also turn towards higher quality items that last for years or even decades as opposed to a single season.These actions could include fines, penalties, and duties for certain product components that don’t decompose, like polyester.
 
Sustainability is no longer a PR campaign. It’s a major tenet of your corporate strategy.
 
It’s time to stop looking at sustainability as a branding tactic and start integrating ESG initiatives into every step of the supply chain and product lifecycle.
 
Sustainability starts with sourcing and production and ends with recycling and disposal, and without intelligent costing data and a digital record of the product, retail companies risk overspending on materials, tariffs, and other expenses.
 
The fact is that companies need to accommodate ESG initiatives to stay competitive and differentiated in today’s retail industry and avoid significant damage to brand reputation.
 
But this undertaking doesn’t have to come at the expense of product margins.
 

Optimizing your business to support sustainability

 
An intelligent, accurate product costing solution that integrates sustainability initiatives directly into sourcing and costing estimates enables retailers to eliminate unexpected spending and gain a clearer understanding of how much sustainability will affect their bottom line.
 
This data enables retailers to get sustainable products to market fast and at cost.
 
The Bamboo Rose Should Cost Analysis tool leverages historic purchasing information as well as current material, tariff, and component costs to calculate the expected cost of a product and graphically compares this number with available supplier offers.
 
With this analysis, buyers can determine whether offers are reasonable and identify cost outliers to negotiate better margins while ensuring quality levels meet consumer expectations.
 
By combining the financial impact of emerging sustainability regulations and requirements across geographies into the cost of supplier products, Bamboo Rose helps retailers spend less while meeting their sustainability goals.
 
The Bamboo Rose Supplier Recommendation tool further assists retailers in their efforts to source sustainable products by recommending the suppliers best equipped to support product requirements against a range of configurable business criteria – including ESG initiatives and goals.
 
This tool analyzes production capabilities, past win rate, audit performance, sustainability metrics, transportation costs, and risk exposure to deliver a recommendation for the optimal vendor partner. Buyers will have full visibility into their suppliers’ offerings and limitations for more efficient and better-informed decision-making.
 
A lot is going to change – and soon – for apparel retailers. Will labeling change to reflect clothing durability and lifespan? Will companies need to have multiple bills of materials (BOMs) for an item to accommodate different international regulations? Will clothing made with 100 percent polyester face a steep fine, while clothing made entirely or mostly of cotton faces a lesser fine?
 
These are the questions retailers need to ask themselves now.
 
The Bamboo Rose Should Cost Analysis tool will allow retailers to compare products across markets and channels to determine where they can find the lowest cost for sustainably-made products.
 
With this information, retailers can decide how to produce and price products to stay profitable. And the process of comparing, estimating costing, and pricing goods will be a lighter lift on the administrative level.
 
Prepare your apparel business now for the future of sustainability with Bamboo Rose.