Source: H&M
H&M sells supply chain transparency
H&M announced last week that it had become the first major fashion retailer to bring transparency to its wider supply chain by offering details on all clothing sold on hm.com as well as the majority of interior products from its home collection sold on the site.
Each item included in H&M’s transparency initiative will show details on the country where it was produced, supplier names, factory names with addresses and the number of workers employed at the facilities. The retailer’s customers can also find out about the materials used in making individual garments. The goal, according to H&M, is to enable its customers to make more informed choices about the products they purchase.
“By being open and transparent about where our products are made, we hope to set the bar for our industry and encourage customers to make more sustainable choices,” said Isak Roth, H&M’s head of sustainability, in a statement. “With transparency comes responsibility, making transparency such an important factor to help create a more sustainable fashion industry.”
H&M has long touted its willingness to be open about its supply chain and sustainability initiatives. It first began publishing its supplier list online in 2013. Two years ago, it introduced its Conscious Exclusive Collection produced with Bionic Yard, which is made from grocery bags and plastic bottles collected after being washed up on shore. The retailer previously set a goal of having 100 percent of the cotton used in its clothing to be sustainably sourced by 2020.
Discussion Questions
DISCUSSION QUESTIONS: Do you think a large percentage of the purchasing decisions made by H&M’s customers will be influenced by its openness about product sourcing? Will other large retailers follow H&M’s lead?
Poll
BrainTrust
Carol Spieckerman
President, Spieckerman Retail
Steve Dennis
President, Sageberry Consulting/Senior Forbes Contributor
I don’t think the 4.3 BILLION in unsold clothes last year came from people caring about product sourcing.
Years ago, Walmart whispered that traceability was on its way, but it appears that other initiatives jumped to the top of the list. H&M has finally broken the long-promised, item-level transparency barrier at scale. Now let’s sit back and see if consumers take notice — and if other retailers jump in.
I watched the documentary “The True Cost” last year and vowed never to buy fast fashion again. And I haven’t. For those that care, they care a LOT. For those that don’t, this is meaningless. Watch that documentary, then come back to this question.
Consumer attitudes, like any cultural shift, take time. There’s enough education and thoughtfulness regarding this topic that once consumers with options (I add this caveat, because if you’re fighting to keep clothes on your back, you don’t care where they come from) understand the consequence, they tend to make the morally right decision. This documentary is extremely impactful.
Knowing the name of the factory in China or India for example, employing 500 – 2000 workers, has little relevance to a customer. Unless of course, the customer is a sourcing agent for another large apparel retailer or brand. No references are included in the H+M “transparency” statement as to the conditions of the factory, how many hours workers have to work, are children under 13 employed, what is the factory safety record, etc. etc. References to fibers like cotton, etc. being sustainable are blanket statements.
I think it nice that H+M is touting sustainability. But in the real world of building sustainable clothing on a global basis, this transparency is like the title of a book. A headline. The flip side, new apparel companies now have a global apparel manufacturing directory!
I think the question needs to be nuanced a bit. Actual individual purchasing decisions? Maybe not. But whether or not to buy from H&M in the first place — that I think is a different, and better, question.
Recent Earth Day 2019 research by A.T. Kearney suggests that consumers see environmental benefit claims falling into two large buckets: immediate, i.e., those elements of an offer a customer can directly experience such as recyclability; and remote, i.e., things down the supply line that may, in fact, be more impactful over the long haul but are too abstract to move consumer purchases. Customers, the study found, are motivated by claims of immediate benefits and unaffected by remote benefit claims.
What H&M seems to be trying to do is to make “remote” claims more “immediate” by including information on the entire supply chain at the point of sale. Depending on the execution, I think it could work and if it does, it will quickly become table stakes for retailers in certain categories.
Decades ago Ireland’s Superquinn stores tried a similar approach, posting pictures of the farm where produce was sourced, pictures of the farmer who grew the crops, and driving directions to get to the farm. While it might seem like more information than a customer would want when buying a head of cabbage or a tomato, the result was a dramatic upsurge in sales. Maybe H&M is on to something here.
While most consumers will not read the details of the source of the product and make purchase decisions based on this information, there is a growing segment of consumers that are passionate about sustainability. Environmentally and socially conscious consumers will continue to gain traction and retailers are responding with sourcing decisions that are more responsible. The negative press from sourcing products from unsafe ingredients or factories that have unethical labor practices can be disastrous for a brand’s reputation.
Product sourcing decisions for retailers will continue to be more transparent, which will influence how products are sourced. Electronic receipts technology allowing linked video content aimed at sustainability are available off the shelf today, I’m not sure why this has taken so long to happen.
This is a good thing!
Whether we like it or not, the majority of customers don’t seem to be tremendously influenced by ethical supply chain issues. If they were, the iPhone would not be the phenomenon it is (as just one example). Whether this is due to ignorance, a large dose of denial or a rationalization of trade-offs is hard to say.
Having said that, there is clearly a growing interest and concern, particularly among younger customers, to understand the broader impact of their purchases. And, in turn, more and more companies are taking these matters more seriously. Which is a good thing for humanity, IMHO.
So I commend H&M for moving closer to doing the right thing. In the short-term I doubt a large percentage of customers will be influenced. But as this is part of a growing movement it is both the socially responsible, as well as the competitively important thing for H&M to do.
The world has changed. The Millennials and Gen Z shoppers, arguably the most sought after segments for new customers by H&M, care about this. Good for them and I think transparency will become the next big disruption in this crazy wonderful industry.