By Kate Roush
The post-pandemic shift away from fast fashion and towards sustainability in the fashion industry is an economic imperative for long-term industry adaptability and ethical responsibility. With revenue as high as 1.7 trillion dollars, the fashion industry is one of the key value-creating industries for the world economy. In 2020, COVID-19 stopped the growth of many areas of our economy, and as the lockdown implemented strict guidelines for consumers, the fashion industry was hit hard. Daily income for retailers was lost, and well-known companies were not making set income targets, resulting in shutting their doors permanently. For instance, JCPenney closed all its retail locations due to income loss, then only reopened two-thirds of US locations. Staff were furloughed, meaning employees were asked to take a leave of absence, as employers could not cover staff costs. Such factors have perpetuated cycles of instability in the global economy.
The sharp shift from in-person to online shopping also affected the market, shrinking it by -18.1% in 2020, thus causing revenue to decrease by 20%, according to McKinsey and Business of Fashion’s annual report. Following this sharp decline, online fast fashion shopping increased. This offered a budget-friendly way for consistent consumers to continue shopping. This highlights the industry’s resilience to consumer demands and the frailty of employment in the industry. The global economy has undergone significant disruptions due to the surge in fast fashion. For example, decreases in GDP growth rates, rising unemployment in retail and manufacturing sectors, and supply chain interferences. Companies such as H&M and Zara faced supply chain interruptions, representing sensitivity to global events.
The garment industry heavily impacts our collective sustainability efforts, being responsible for nearly 10% of global carbon emissions. According to market research, fast fashion comprises approximately 18% of the global garment industry. With low price points and the convenience of online shopping, customers frequently indulge in retail therapy on their favorite fast fashion websites. This apparel is made in large quantities without care, to cater to mass consumption, and most retailers, such as Shein, have quick turnarounds to complement popular trends circulated by social media. During the pandemic, the surge in demand for fast fashion over sustainable alternatives was driven by the economic constraints many people faced. Widespread job loss and lowered income caused priorities to change, specifically affordability. Most sustainable brands were met with higher price points due to the higher quality, and ethical sourcing. Besides what was caused by the pandemic, there are other weak areas within the fast fashion economy, including market saturation, supply chain disruption, and long-term economic viability and resilience. With the proliferation of fast fashion and the increased competition for consumer attention, profit margins shrink, thus leading to the race to lower and lower pricing and production costs. Beyond the economic impact, the ethics of fast fashion influence the treatment of its workers. The negative effect of fast fashion is traced to precarious employment conditions and low pay. This is all at the cost of consumer behavior prioritizing affordability over sustainability.
Sustainable fashion, which requires longer production times, seemed less appealing to the public looking for immediate, budget-friendly options while dealing with the financial uncertainty of the pandemic. Sustainable clothing lasts longer, strives for better employee conditions, and most importantly is environmentally friendly. Regarding our economic footprint, sustainability creates efficient supply chains, balancing supply chain growth and reducing environmental impact simultaneously. The goal of sustainable fashion is to reduce waste as a result of production. By making clothes with significantly improved quality, using genuine materials and ethical resources, less waste is produced which in turn causes less water pollution and carbon emissions. Luckily, in our post-pandemic world, fashion sustainability has been rising in popularity. Brands such as Levi’s have committed to using only sustainably sourced cotton by 2025, all in response to consumer demand. Consumers are calling for more sustainable options and practices, validating that the COVID-19 pandemic changed how we think about and view the fashion industry.
The hardships that we, as a population, encountered and endured during the pandemic shifted our desire to bring eco-friendly and ethically sourced products into our lives, including fashion products. The idea of people becoming more health aware led to being concious of their environmental awareness, positive lifestyle changes, and a renewed focus on community support, according to Environmental Europe. Ethical purchasing habits, reducing waste, and a preference for locally produced goods and services were all ways in which this lasting trend toward sustainable consumerism began. It can be acknowledged that the pandemic was a driving moment for the fashion industry in recognizing the need to go green and moving towards ethical approaches to business practices. Economic sustainability develops long-term economic growth that improves quality of life and doesn’t negatively impact the environmental, cultural, and social factors of our communities.
Supply chains are an integral part of all businesses and the management of this system is essential to company success and customer satisfaction. The pandemic accelerated and magnified problems that already existed in supply chains as national lockdowns slowed or temporarily stopped the flow of raw materials and finished goods, disturbing manufacturing. Fast fashion heavily relies on the global supply chain to rapidly produce and distribute clothing. Relying on globalized supply chains generates various risks, including trade disputes and geopolitical tensions. Trade disputes manifest in different risks that disrupt supply chains by increasing costs and delaying shipments. Geopolitical tensions, such as sanctions and conflicts, lead to resource shortages which also destabilizes the global trade network.
Supply chain disruptions within the fashion industry cause a ripple effect throughout the global economy, production, inventory, and consumer access would all falter. Sustainable supply chains tend to be more resilient by focusing on ethical production. This practice makes companies less vulnerable to these global disruptions, like the COVID-19 pandemic, by supporting local sourcing and reducing the dependency on complex supply networks. By adopting sustainable practices, fashion brands reduce dependency on weak supply chains.
The future of fashion lies in our choice as consumers, to choose sustainable fashion and promote a brighter economic future. Moving towards the reduction of non-biodegradable fabrics means fewer clothes in landfills, thus helping the environment and reducing the amount our economy associates with waste management. If the circular economy concept is implemented by businesses then resource spending could be reduced, leading to economic benefits. Circular economy refers to the idea of reducing waste and extending the life of products by practicing reduce, reuse, and recycle. The pandemic underscored the unsustainable practices inherent in the fast fashion model, prompting this movement towards sustainable efforts. By prioritizing this effort, a resilient foundation that can withstand global disruptions is built. This movement is an economic imperative that ensures a thriving industry. Growing support for sustainable brands and giving them the revenue to stay sustainable is one way we can improve, not only the fashion industry, but our global economy altogether.
The views expressed in this article are the author’s own, and may not reflect the opinions of The St Andrews Economist.
Image Rights: Harvard Business Review