Growing a sustainable brand - Part 3. Economy
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Read part 1 - The (real) definition of sustainable brand
Read part 2 - There is no sustainability without welfare
Instead of tightening the budget or furloughing employees like many other retailers do in response to the COVID-19 pandemic, US-based Patagonia doubles down its effort on environmental activism and continues paying its staffs despite closing its physical stores and e-commerce in March.
Founded by Yvon Chouinard in 1973, Patagonia has successfully applied all sustainability aspects - environment, social and economy - on the brand. Chouinard is in Forbes’ billionaires list with net worth of $1 billion. What's even more astonishing about the brand is that it encourages its customers to not purchase too many products and send the products back for repair.
Patagonia has defeated the odds. The more it advocates for the protection of the planet, the more revenue it earns in return. Granted, the brand sells high quality products at expensive prices.
Adopting Patagonia’s strategy in Indonesia requires plenty of efforts in educating the market. According to Tri Hita Karana (THK) co-founder Phoebe Carolyn, there are two options a brand can take if it wants to incorporate sustainability, “Either we go for the convenience but more expensive or complicated but more affordable route.”
THK chooses to go with the latter. Phoebe and her team made their own packaging from old newspapers. She could easily opt for biodegradable packaging that costs more but saves the hassle. However, the brand is eyeing profitability next year. THK founders also sacrifice their pay and allocate it to their workers instead. It is common for a start-up.
Ready-to-wear brand Kuro (@kuro__official) has its own strategy. In order to minimise leftover or dead stock, the brand splits the offering into two categories, seasonal and timeless collections. “Timeless pieces are designed to last. We try to keep the rescued fabric in stock. For seasonal pieces, we often use a pre-order method to minimise overproduction,” said Kuro Design Director Douglas Koh.
Rescued fabric according to Kuro is a small amount of leftover fabric from garment production in good condition, thus rescued.
For pricing, Douglas admitted that the brand has to adjust prices to consumer’s purchasing power in the midst of the pandemic even though eco-friendly fabric is more expensive than other types of fabric, such as polyester.
Welfare is undoubtedly the main driver of sustainability. In 2019, annual median household income in Indonesia was Rp59.1 million ($4,075), making Indonesians extremely price sensitive. Sustainable products usually come with a higher price tag than ‘unsustainable’ products. Therefore, zero waste living seems like an aspirational lifestyle rather than a goal.
Take, for instance, sachet packaging. Single use sachet from multilayer packaging generates trillions of plastic waste annually. But for small shops or warung, sachet packaging makes them more accessible to the local residents - not to mention purchasing sachets at a wholesale price is more affordable for them.
Looking at the current circumstances, there are three possible outcome for fashion brands:
Use eco-friendly materials and properly compensate everyone in the team, but sell at high price point.
Use eco-friendly materials and sell at affordable price, but doesn’t provide fair incentive for its team.
Properly compensate its team and sell at affordable price, but doesn’t use eco-friendly materials.
A brand will most likely experience slower growth compared to its peers in the industry if it goes with option A.
“With slow fashion, we will definitely have slower growth because we have to be very selective with our distribution channels,” said Shari Semesta from Imaji Studio (@imaji.studio), ready-to-wear brand that champions slow fashion. The brand prefers joining pop-up and events to selling at consignment stores in order to maintain the margin.
Shari and her team take on collaboration project for exposure and launch products that are more accessible like t-shirts. The brand also turns fabric waste from production into new products such as face mask.
“The key to sustain business while being an idealist is to adapt with market needs. If we are stuck with our idealism and unwilling to try other options to create new products, that will hinder the business [growth],” said Shari.
Bluesville (@bluesville) Creative Director Direz told TFR that boosting revenue while preserving the environment and providing fair compensation to the employees is possible, but it involves giving up the desire for constant and rapid growth.
“Other brands can boost growth by increasing production, but if we are thinking about sustainability, growth is evil,” said Direz. The brand presents new collection twice a year and offers made-to-order (MTO) or pre-order option for some of the items to reduce waste.
“We realise since the beginning that when we produce an item, we are also producing ‘waste.’ With MTO, production will happen if there is a clear demand and [it’s guaranteed that] the produced item will be worn.”
The brand also employs permanent in-house batik artisans. “Not many brands pay monthly wages to their artisans. Batik or dye artisans are usually paid per project, per fabric or per dye.” Therefore, the quality, value and labour justify the price tag of the brand.
The model clearly works because Bluesville has been in the industry for more than eight years. It has successfully applied sustainability practices although it never explicitly mentions itself as a sustainable brand.
“For us right now, reducing environmental pollution has become a necessity for brands and it doesn’t actually increase the cost. On the contrary, it becomes future investment,” Direz added.
Another thing that up-and-coming fashion designers should consider is being innovative in a specific category as opposed to launching ready-to-wear clothes that have flooded the market. Patagonia focuses on high quality outdoor activities products. It makes sense to pay more in exchange for high quality garment and products while engaging in high-impact outdoor activities, such as hiking, climbing and surfing.
Most importantly, sustainability has to be ingrained in the founder’s mindset since the beginning, or as Phoebe put it, “Sustainability is not a division in a company. It is a corporate culture.”
