Fast fashion as a concept has been under scrutiny for many years now given its reputation for encouraging a culture of mass production, over consumption, and, more importantly its detrimental effects on the environment and the workers. Younger consumers that are more purpose-driven, aware, and value-oriented are making informed purchasing decisions that align with their individual values, and sustainability and ethics rank quite high. Moreover, Gen Z has a massive influence on influencing the older generations, especially when it comes to sustainability and health.
According to a report by First Insight, nearly 90 percent of Gen X consumers said that they would be willing to spend 10 percent extra or more for sustainable products, compared to just over 34 percent two years ago. The report also revealed that the majority of respondents across all generations have a high degree of expectation that retailers and brands will act in a sustainable way. Agreed, that the definition and degrees of sustainability may vary between generations and individuals, but the intent is strong.
The fashion industry itself is responsible for one-tenth of all the water used industrially, excessive carbon emissions, unfathomable quantities of wastage considering 57% of all discarded clothing ends up in the landfill, and so many factors big and small that contribute to irreversible ecological damage. Now, fast fashion ends up being the biggest culprit as the very nature of the business model is to mass-produce the latest fashion trend at lighting speed at cheaper costs before the fad becomes irrelevant.
So then, with customers inclining towards sustainable options and being more aware of what/how/where of the things they consume, would that mean that the future of fast fashion is bleak? Actually, this question only arises because the general consensus is that fast fashion cannot be sustainable. What if that is a myth?
Surprisingly, the award for the Responsible Retailer of the Year 2021 at the RetailME Awards last year, went to Splash Fashions – a homegrown fast fashion brand, which is part of Landmark Group. CEO Raza Beig, who had already been on stage a few times to receive other awards on the day said, “This award commemorating our journey towards sustainability is very special, because it has taken us 10 years to reach where we are, and today we can claim proudly that 92% of our business is sustainable.”
Raza Beig is the illustrious leader who has been responsible for taking Splash Fashions to new heights in eight different markets over the last 29 years. Since 1983, the homegrown retailer has evolved from being a trading house, to a buying house, to a design house to eventually a high-street retailer. Despite the many accolades and milestones that the brand has achieved over the years, including the opening of 200+ stores in the region, building a strong cohort of loyal customers such that roughly 80-90% of their existing customers come from their Shukran loyalty programme, and having built a powerful name for itself with its strategic marketing campaigns, the one thing that Raza is most proud of is Splash’s sustainability journey.
“The one biggest milestone I think that we have achieved today in our business is our sustainability journey. We started the process around 12 years ago. While it is still just a buzzword for some businesses today, we started it because we thought it was the right thing to do. To date, almost 92% of our business is sustainable, 100% of our materials are sourced sustainably, almost all our polyester, cotton, and viscose are certified. So it’s clearly a very good differentiator between us and the other high street retailers in the region,” he said.
It definitely wasn’t an easy process for the team at Splash to make the shift as that meant that the whole sourcing, manufacturing, production and processing channels had to be rethought. However, the fact that they stopped thinking about sustainability as a CSR campaign or just another marketing messaging, but made it the DNA of the brand, helped with the transition.
However, the economic sustainability of transitioning to ecological sustainability has been a big question for brands and retailers. How did Raza address this?
“In the initial stages it was very expensive because we had to bring in advisors or agencies who were very expensive at the time. Also when we started the process of sustainability, the suppliers tried to charge more because we were asking for organic cotton. But as we went through the whole process and as economies of scale started to come in, we managed to get our prices to what we think is right,” he explained.
It indeed did start off as an expensive process for the brand, as a result of which some of the costs had to be passed on to the consumers. However, Splash’s customers were welcoming of this change and didn’t mind spending more as long as the brand aligned with their values.
“Customers today clearly understand the value we tried to bring in. Because they are eco-conscious, they understand that our garments have the right certifications, everybody’s wages are paid and that we are practicing sustainability, which is why the products are a little expensive. But now, I do believe the prices are exactly what we want them to be,” he added.
Supply chain has proven to be a huge challenge for retailers over the past year, given how the bottlenecks as a result of the pandemic, geopolitical issues, single sourcing, and various other internal and external factors have added to costs and increased inefficiencies. Also, for most companies, supply chain is responsible for the bulk of their economic impact. While rethinking the entire logistical chain might be a long-term goal, assessing the suppliers for where a retailer’s product is sourced, produced and manufactured might be a good start.
A new report published by Barclays found that a fifth (21%) of the UK’s largest retailers cancelled contracts with suppliers on the grounds that they failed to meet environmental, social and governance (ESG) standards. The most common reasons for cutting contracts with suppliers were the use of materials not meeting sustainability criteria, and evidence that suppliers were not providing good working conditions, pay and hours to staff.
However, there isn’t a dearth of suppliers in the world that are willing to and capable of complying with basic ESG standards. It would be the retailers responsibility to make the right choices then. “There are a lot of suppliers in the world who want to source ethically, or who are on the same sustainability path. So that is one change that you have to make as a retailer. A difficult thing to do on our end was that we had to say goodbye to a lot of suppliers who did not believe in the sustainable journey. There was extensive work done in finding the right factories that believed in our values. Once you find the right set of people and teams, then it becomes very easy,” he said.
In this region, the bigger challenge however, is the individual mindset shifts. You see, the GCC is a relatively younger economy compared to Europe and has relied on fossil fuels, oil and carbon for development. Thinking sustainably and conscious consumerism are just slowly seeping into the psyche of the people.
“Another difficult part for us was to explain why we were doing this. When we started the journey over a decade ago, not many factories practiced sustainability. The concept was there but it was more Europe-based. It was not so relevant in the Middle East. People initially ridiculed us for being ‘fussy’ about it. But when eventually they understood our stand, there were some suppliers who made the required changes and some who didn’t.”
“And then the challenge would be to bring new suppliers on board – It’s not easy or inexpensive. For warehousing, the entire sourcing of the materials including plastics and buttons had to go through a change and that whole shift was very tiring, tedious and expensive,” he added.
Globally, as a consequence of the pandemic and all the logistical hurdles it brought with it, local-for-local sourcing emerged as a key solution. Supplying locally or at least more locally (read: closer to home) guaranteed flexibility and speed in delivery, greater control, support for the local community, and provided a huge opportunity to help the planet. By simply reducing shipping distances, greenhouse and carbon emissions can be reduced and energy can be preserved.
However, when Raza was asked about this, he admitted that it isn’t necessarily that easy in the GCC. “UAE is not a very big manufacturing hub. About 4% of supplies is sourced in the UAE, but I am not sure if we can go beyond that,” he said.
Over the years, Splash Fashions has made some key investments to further the brand’s value proposition be it with big name celebrity endorsements that helped the value fashion retailer position itself as a vibrant high-street brand or the more recent collaboration with Boredpuma announcing its foray into NFTs. While Raza is firm on not get left behind on any trend and being where his customers are, be it the store, online, or the metaverse, he will be prioritising a lot of the investments in the brand’s sustainability drive and urges other retailers in the region to do that too.
“I think retailers should be focusing on sustainability. It is a burning issue and a lot of damage has already been done to mother Earth. It shouldn’t just be about the P&L but rather about doing the right thing. Soon, I think, there will be laws and regulations about this and the customer will expect it from us,” he said.
As for whether fast fashion and sustainability can go hand-in-hand, Splash has proved that it can (at least tread on the path if not achieve absolute sustainability) provided businesses operate in the three dimensions of social, environmental and financial, follow circular fashion, principals, and ensure sustainability isn’t purely a marketing/CSR gimmick, but part of DNA of the company.
“I have broken that myth and misconception of fast fashion not being able to be sustainable, haven’t I? It is a process that takes a little time but it can happen. It starts with sourcing and raw materials. When you work on these core things everything else will fall in place,” he concluded.
Consumers, investors, and other key stakeholders of fashion retail are at aMay 11, 2022 | By Zubina Ahmed
The eight edition of the Retail Leaders Circle MENA, convened more thatMay 5, 2022 | By Zubina Ahmed
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