Traceability systems are helping brands understand the entire lifecycle of their products and begin designing circularity into their clothes.
With supply chain visibility, sustainability-focused business models like resale, reuse and recycling can be mapped out by brands and retailers. It also unlocks other benefits like cost-saving efficiencies, gray market mitigation, and brand authentication.
What if we don’t become more transparent? In the apparel manufacturing process, a lack of end-to-end traceability can result in compliance risks, inefficient supply chains, lost profits and consumer distrust.
New laws are coming that will require fashion brands to be more transparent, and Avery Dennison’s Digital Solutions are readily available to support this transition.
Let’s look at fashion traceability in numbers
More than 50% of fashion executives say traceability will be a top-five enabler to reduce emissions in their supply chains.
48% of major brands now publish a list of their first-tier manufacturers, more than ever.
However, 50% of major brands still disclose no information about their supply chains.
Avery Dennison’s Missing Billions Report says 35% of firms plan to introduce technologies to identify unique item-level tracking and traceability to help fix inventory black holes which are costing them dear.
71% of consumers surveyed across 28 countries indicated that traceability is very important and they are willing to pay a premium for brands that provide it.
Challenges to overcome
Many brands and businesses face fragmented networks of suppliers with little visibility beyond their direct relationships.
The apparel industry has long been defined by dislocated and difficult-to-trace modes of production.
Garment developers work with multiple suppliers and types of raw materials, requiring meticulous management of processes to ensure delivery, quality and compliance.
There is a lot of data to manage across a complex and constantly changing supply chain. Data can be siloed, and there is rarely real-time visibility for multiple stakeholders.
Another big issue is commercial sensitivity. Not all brands want to reveal to the market every aspect of their production processes and the suppliers they work with.
Transparency and ESG reporting are simply not priorities for every fashion business. As of today there are no strong incentives for manufacturers to fully disclose information about human rights and environmental due diligence as well as production processes.
Regulatory mechanisms will speed the transition to transparency
Upcoming legislation will accelerate the move to transparency in the global fashion industry. We have produced a special report Digital Product Passports: The Gateway to Fashion Eco-Law Compliance, outlining what impact we believe new laws will have, and how digital ID technology will be needed to facilitate disclosure of supply chain information.
We have worked with proactive apparel clients who have adopted digital ID technologies like RFID and QR codes for garment connectivity in their supply chains. For example, Gap Inc has used Avery Dennison’s atma.io connected product cloud to account for environmental footprints through more granular supply chain data, providing valuable insights for customers and other stakeholders.
Trust is everything
Both transparency and traceability are essential in making meaningful progress towards social and environmental goals, with benefits extending throughout operations. With digital solutions and disruptive collaboration, traceability helps industry stakeholders to understand the entire lifecycle of their products, identify challenges, and mitigate risk.
The climate crisis cannot be ignored. Conscious consumerism is impacting our sector and there is a huge consumer appetite for transparency in fashion. People have wised up to greenwashing, so providing transparency with credible data is an effective way to assure loyal shoppers that your brand has the planet’s future in mind.