BCG Warsaw and Vogue Polska have recently published a new report, which explores the extent to which Polish consumers have until now adapted to sustainability in the fashion industry. As it turns out, as many as 75% of respondents to the study claim that they perceive sustainability as an important factor influencing their daily life, including purchase decisions. 40% of them have, in turn, said they shop for ethical apparel, while 38% expressed an intention to buy more secondhand clothes after the pandemic. Yet despite these encouraging results, viable reasons why conscious shopping is yet to become more widespread have also been identified. The problem lies in not only the confusion over which garments are sustainable, but also in the lack of willingness to pay a sustainability premium for a more environmentally friendly apparel item.
What is the way forward for sustainable fashion and consumer consciousness in Poland? We tried to find out from Magdalena Lemańska, Head of Sustainability at Vogue Polska, and Joanna Dłutowska, Project Leader and Lead of Consumer & Sustainability practice at BCG Warsaw.
You have recently published a report about sustainability in the fashion industry. How did this cooperation between BCG Warsaw and Vogue Polska start?
Magdalena Lemańska (Vogue Polska): A year ago, just before the pandemic, we reached out to BCG Warsaw to establish an exclusive knowledge partnership. Vogue’s website, concerning luxury, fashion and lifestyle content, has the highest number of users in Poland with 1.5 million readers per month. At the same time, companies often come to us and want to partner with us on different sustainability-related projects. However, we also needed a long-term strategic partner who has the expertise and business acumen, so we reached out to BCG Warsaw. Our first project together was the Business Fashion Environment Summit 2020 in September last year, which was the biggest conference in CEE on sustainable fashion. The next step was to write this report.
While defining the scope of the report, we looked through several reports and did not find too many focusing on consumers – especially about their adaptability and price sensitivity. A lot of information is coming from companies, but consumers are confused.
At Vogue Polska, we can see that people are interested in this content, but they need more information about which clothing items meet sustainability standards.
Joanna Dłutowska (BCG Warsaw): BCG has globally invested a lot of effort in the implementation of sustainability across industries, including the fashion and luxury one, which as the third biggest emitter generates around 5% of global emissions. Accordingly, the majority of research conducted until now focuses on companies and their sustainable profiles (examples include Pulse of the Fashion report developed by BCG, Global Fashion Agenda and Sustainable Apparel Coalition) or on supply chains – their current state, innovations and investments that are needed to progress towards net zero supply chains. Thus, we decided to look at the matter from a different angle and concentrate on one of the critical stakeholders in the whole ecosystem – consumers. We wanted to better understand how important sustainability is for them, what it means for them and mostly how their sustainability declarations translate into actions. Additionally, we were also interested in how price sensitive they are when it comes to paying premium for sustainable apparel.
Can you shortly summarize what the main findings of the report are?
JD (BCG Warsaw): According to our survey, 75% of Polish consumers regard sustainability as an important everyday factor that increasingly influences their daily habits, such as the use of single-use packaging, the use of alternative means of transport or meat consumption. Out of those who are either indifferent or skeptical, 69% do not perceive eco-credentials as important purchasing factors and 42% have doubts about the ethical and environmental impact exerted by brands. Others consider sustainable apparel to be either too limited in range relative to regular product lines (21%) or too expensive (20%).
Poles are growing more receptive to the idea of using garments longer or giving them a new life.
Overall, 40% of consumers say that they buy ethical apparel and up to 38% indicate their readiness to buy more secondhand clothes once the pandemic is over.
Moreover, BCG’s latest price elasticity of demand analysis has shown that about two-thirds of Polish consumers are willing to pay more for sustainable apparel. Yet regardless of whether they shop online or offline, the initial demand for such clothes falls by up to 62% in response to a 20% increase in price.
One of the most alarming conclusions from our study is that up to 26% of consumers would not consider buying sustainable apparel even if it was priced the same as regular clothing items. The main reason why they are unwilling to make such purchase is because they are concerned about product quality.
Another worrisome finding involves the high percentage of consumers who do not understand what sustainability means. This figure, which ranges from 20% to 30%, signals a clear need for brands to intensify educational activities that they have already undertaken.
ML (Vogue Polska): Building up on what Joanna said, what was striking is how big of a proportion of consumers do not know what sustainability is and what sustainable fashion means. We can observe a lot of positive changes across the supply chain, companies from the fashion and luxury industry are able to innovate, be more efficient and harm the environment less, but consumers who are at the end of the value chain still do not understand how they can support sustainability and embrace it in their daily lives. The majority (60%) still does not buy ethical apparel. So communication is very important, to explain it in a way that is easy to understand for customers.
Do you think customers are currently the drivers of sustainability efforts in the fashion industry?
JD (BCG Warsaw): Consumers are an important element in the whole ecosystem and generally support sustainable change, yet I do not believe that they are the main driver of it – if we waited for consumers, the change would be way too slow versus what is required. According to our survey, only 27% of consumers associate sustainability with shorter, less complex supply chains, which is why many real changes that companies are currently implementing to ensure a long-lasting impact are not understood or noticed by the majority of consumers. A truly meaningful change happens top down, with regulators and companies driving the effort. Current and upcoming regulations put a lot of pressure and responsibilities on companies, which are slowly taking steps towards compliance. Collaborations and partnerships like The Fashion Pact, which is a global coalition of companies in the fashion and textile industry launched by Kering and President Emmanuel Macron, are becoming frameworks to start, continue and sustain the change on a global scale – especially given how The Fashion Pact already comprises one third of all fashion companies. As standards and regulations are elevated, companies will be driven towards greater ownership, accountability and collaborations to meet these amplified goals and expectations. And despite the change not being driven by consumers, it does not mean that they are not a vital part of the equation to catalyze systemic change. There is just still a lot to be done with regard to their consciousness and we have to start from the beginning.
The consumption of clothes is about to increase by 63% till 2030 and sustainability remains a key purchasing factor for only 7% of consumers.
This signals that we as consumers need to change our daily habits to start being more sustainable.
ML (Vogue Polska): The change should indeed come from international and national regulators. But I think it is important for companies to take consumers into account. In the region the price is still a very important factor. But in the years to come it will change with the rise of disposable income.
JD (BCG Warsaw): What is also important is that 70% of supply chains in the fashion industry can be decarbonized, which would already result in a significant reduction of emissions it currently generates.
Furthermore, such decarbonized supply chains would increase production costs by only about 2-4%.
Needless to say, it requires a lot of investments, time and changes across entire supply chains of companies.
Several factors you assessed were ecological, such as circularity and climate. What do you think about social factors, how important are they for customers?
JD (BCG Warsaw): Based on our study, only 1/3 of consumers associate sustainable fashion with social aspects, such as ethical labor. It seems that similar factors are mostly considered by consumers who are very well educated and active when it comes to sustainability. If you compare the extent to which the social aspect is understood by regular consumers, it is 2-3 times lower than their understanding of the role and impact of upcycling, recycling or using non-hazardous materials. This is, however, not to say that it is entirely irrelevant – take the example of Boohoo, a fast growing online retailer that wiped 1.59B pounds off the brand’s market value over two days in July 2020 due to revelations about low pay in their factories. It also prompted Next, Zalando, and Amazon to remove certain products from their marketplaces, which already influences customers directly.
ML (Vogue Polska): The social element is obviously crucial for moving forward with any sustainability strategy. In terms of ESG, it is also important for the company’s performance, operations and supply chain. But because we focused on consumers, we did not focus that much on the supply chain and hence on the social aspect. This is something we might potentially explore in the next report.
Reporting and access to information are key in sustainability. What are the tasks in the field of transparency and measurement when it comes to consumers? How can they get more information on sustainability?
ML (Vogue Polska): Communicating with consumers by both online and physical stores is a big issue and it has emerged as one of the main conclusions of the report. Companies should work on helping to navigate consumers towards more sustainable purchases. Consumers currently do not understand what it means and how companies execute their sustainability agenda. But also looking at particular apparel, it’s hard for them to navigate which clothes or shoes are made in a sustainable way. Companies are already trying to communicate with consumers, but there is still a lot of work to be done.
Our other conclusion in the report was that the sustainability agenda should be overcommunicated.
Companies have to explicitly explain what sustainability is and this narrative should be continuous. Additionally, new business models, such as rent and resell, should be implemented as well to involve consumers and allow them to engage. Because if their engagement increases, then awareness and acceptance of the sustainability agenda also rises significantly.
JD (BCG Warsaw): It is also very important to avoid greenwashing. What we can see is that the majority of consumers feel confused about what really is sustainable or non-sustainable. Such transparency is becoming increasingly essential. In the post-COVID world, consumers will become more picky and they will be looking for brands that they can relate to, that they can trust and that stand for something.
In your opinion, how should companies change their operations?
JD (BCG Warsaw): As mentioned before, changes in how companies operate across the whole supply chains are crucial. From the consumer’s perspective, communication and especially education are key – as of now, 20-30% of consumers don’t understand what sustainability means or how they can support it. Industry leaders have a responsibility to educate consumers about what sustainability means, why it is important and how they can exert an impact to catalyze the change. Furthermore, companies need to give consumers a choice by expanding their assortment of sustainable apparel without disregarding the fashion element of it. Taking into account the fact that only 7% of consumers regard sustainability as a core purchasing factor, while the majority is looking at style, fit and price first, meeting previous requirements on merchandising seems to be key to bring more consumers on board. Otherwise, if basic requirements and purchasing factors of consumers are not changed, they won’t be supporting sustainable change.
ML (Vogue Polska): What I would say is also to think long-term and about what the end goal is. Is it to extend the offering to give an alternative or rather to provide the consumer with no option other than the sustainable one? It is also about making these decisions. Obviously, they have to be viable from the financial perspective, so it again comes back to the supply chain.
But in the long-term, it makes sense to not offer any alternatives, thus only giving the consumer the option of making sustainable purchases.
The original report can be accessed on this link.