22-05-2021 BLOG: Sustainability and digitalisation: fashion industry adapting to the COVID-19 crisis
One of the aims of the CICERONE project is to understand the (global) organisation of production in the cultural and creative industries. Due to the pandemic, it has become abundantly clear that this organisation is far from static. In the fashion industry, the COVID-19 crisis has made a reorganisation of many businesses much more urgent, bringing about significant changes in their production networks. Sustainability and digitalisation are two key elements in this reorganisation, providing new forms of distribution and production, both of which aimed at adding value to fashion products, while at the same time reducing the impact on the environment.
The growing importance of sustainability within the fashion industry has brought the entrance of new production network actors and new organisational forms of production, a process which has accelerated due to the COVID-19 crisis. Many companies have used the crisis as an opportunity to differentiate themselves from the fast fashion industry, allowing for innovation in the use of recycled materials, while new forms of using has produced clothes as raw materials. Fashion design is affected by the interaction with researchers in new materials and the often pioneering use and application of these materials. If the production is based on cotton or wool, certifiers enter the production network as a new actors intermediating between designers and producers, granting textiles environmental and often also social standards in the production phase. Besides, some companies look for local production to ensure social standards in production and to have greater control over production.
The COVID-19 crisis also accelerated an already on-going process of digitalisation. This has had an impact predominantly on production and distribution. The consolidation of online sales has brought possibilities to produce on demand, avoiding financial and logistic problems linked to the pandemic. This digitalisation went hand in hand with a reduction of the number of physical shops and a rearranging of relations with suppliers, as to try to make these more flexible and, thereby, reduce a company’s financial risks. The Basque clothing company SKFK, for instance, adapted to the decrease of sales by reducing its dimension in distribution, closing some of their shops and accelerating their process of digitalisation. As Mikel Feijoó, CEO, states: “what in normal times would have taken from 5 to 10 years, had to be done in six months”. He calculates that the online business will triple next year in comparison to pre-pandemic situation.
In Europe, a companies’ effort to adapt to the new COVID-19 reality has been supported by national funding schemes which aim at sustaining economic activity and employment, but it remains to be seen if employment in the fashion industry will fully recover once the crisis has been left behind. A company like SKFK was able to benefit from governmental support, including loans with state guarantee and partial employment benefits. However, there is uncertainty about what the future will hold with respect to the end and possible repayment of these funds.
It is, then, not yet clear to what extent sustainability and digitalisation will transform the networked production in the fashion industry. Both elements allow for new forms of organisation in production and distribution. Small and medium-sized fashion design companies and companies that innovate with materials can both find a place in production networks, while these networks are also entered by new actors in certification. But large global brands are also adapting to these trends, integrating these within their production processes and retaining their power capacity within the network.
Written by Lía Barrese, Montserrat Pareja-Eastaway and Marc Pradel-Miquel (University of Barcelona)
© Photo: Nubulosagrafica (retrieved from Pixabay)