Time to Step it Up, Fashion Industry

Social responsibility has never been more glamorous than it is today: fashion companies who incorporate ethics and activism into their businesses are seeing higher returns than their peers as Generation Z consumers, those influencing the direction of trend markets, make their choices based on more than a price tag. It’s cool to be green, it’s cool to stick up for women’s rights, it’s cool to buy garments made only with ethically-sourced labour – evidenced by the recent and heavily applauded Fashion Week collections of Prabal Gurung and Maria Grazia Chiuri’s Dior, featuring t-shirts proclaiming “We Should All Be Feminists” and “The Future is Female.” Patagonia’s cry against Black Friday in 2016 that saw the outdoor brand donate 100% of its sales that day to environmental organizations resulted in them reaching a record-breaking $10 million in sales, five times greater than their projected revenue. Social media-born fashion brands centering their campaigns around causes have grown to gain millions of followers overnight, including the likes of Ivory Ella and Makai Clothing.

The ethics angle is clearly working; brands are able to promote a little goodness in their campaigns while being rewarded with media buzz and profits. And yet with fashion, it’s only a fraction of the industry that is moving into the activist spotlight. It’s time for everyone else to step it up.

Why fashion? Because of the unique nature of its industry and consumer base, fashion is able to do what other global industries cannot. Primed to accomplish so much more than it currently is, the high fashion industry has a set of economic conditions that can only be described as luxurious.

Pricing Freedom with Inelastic Consumers

High fashion- let’s leave fast fashion, which faces a completely different set of conditions, for another day- differs from price-sensitive industries in that product demand between brands is rarely a function of price. Although consumers on the margin of purchasing high fashion items display strong price elasticity, the dedicated consumers within the high fashion market, purchasing in high volumes and sensitive to brand differences, exhibit relatively inelastic behaviour. Consumers who are able to spend several thousand dollars on a coat are unlikely to retreat from their purchase if the price of said coat were to increase by $100, for example, and the profitability of the industry is driven by these high-volume shoppers who spend without bound. In industries where there is a high degree of price sensitivity and the consumer base is largely made up of buyers on the margin, a price increase would have major effects on demand.  

Monopolistic Competition and Creative Control

A degree of pricing freedom is not the only privilege fashion houses have, nor is it difficult to break down: brand value and product differentiation come together to give fashion companies miniature monopolies, and with that, creative freedom. Consumers purchasing a coat from Givenchy, a widely-recognized and respected fashion house, will probably want it at least a little because it’s Givenchy and its associated brand value. Because of the value in the label and its selling power, high fashion has the ability to make trends, rather than taking and replicating them. Esteemed brands can push whatever message they desire through their collections, whether it’s that bell-bottom jeans deserve reconsideration or giraffe welfare is of dire importance, and they can do so without having to worry about the possibility of plummeting sales so long as their name is stamped on it. While more of a perk than a condition, it’s important to note that the message that is ultimately chosen by a high fashion brand is one that’ll certainly be heard, and likely pored upon, by millions.

 The Future of Fashion

Exploratory investment in oil is slowly falling in favour of renewable energy as society moves towards a preference for cleaner sources of power. Although the death of the oil industry is an event that is still far off into the future, it is expected with certainty as per the norms of creative destruction. There’s always something better coming along.

The same can’t be said for the fashion industry; miniature revolutions are made with novel garment-making methods, such as the use of 3D printing, but clothes themselves are never going to go out of use. We may wear different things made in different ways but there’s no better alternative outside of the industry, only developments within it. Fashion is a prime spot for investment as an industry that is able to shift, is welcoming of minute innovation, and isn’t going anywhere for a while. At the moment, it’s only a matter of who figures out what the future of fashion is going to look like first and makes the jump in bringing it to reality.

To summarize these prime benefits held by our best-dressed trade, high fashion is a wide-reaching industry that has freedom in sharing whatever message it chooses, while also holding pricing flexibility to ensure it won’t lose out from implementing marginal markups on products. Combine these facts with its global valuation of $2.4 trillion and the reality that the demand for clothes isn’t waning, and it is clear that fashion is in a much more influential position than its neighbouring industries make it out to be.

This is precisely why fashion needs to do more.

Fashion houses and their parent companies have the freedom, and the responsibility, to invest in sustainable technology now.

Apparel manufacturing is far from ethical, especially in the fast fashion industry where cents on the margin of production costs matter for companies’ extremely low price tags. High fashion companies, by investing in their own independent supply-chains, can fight this issue; vertical integration is a great starting point for companies to look at creative ways to cheapen the manufacturing process, largely by investing in experimental technology. Experimental costs of using technology in the manufacturing process can be subsidized by marginally higher price tags for luxury brands - markups with little effect on demand because of the industry’s consumer inelasticity- and result in the development of innovations that can eventually reduce the cost of production at the fast fashion level. These technologies will be the driving force in reducing incentives to outsource for highly unethical cheap labour, an issue plaguing the industry today. Drawing on current trends and the slow but steady death of brand value for companies relying on unethical labour in the fashion market, a clear benefit emerges to investors: if advertised, the noble efforts of the fashion houses that take on the task of revamping manufacturing would be a huge selling point for conscious consumers.

Although high fashion itself faces a degree of separation from unethical labour given its ability to finance specialized labour ethically, i.e. hand-embroidery bought at fair wages, that does not make it prone to the benefits of technologizing the garment-making process. Take into consideration Trump’s threat of imposing “big border taxes” on companies that move manufacturing overseas; as globalization retreats in favour of nationalism, having complete control of manufacturing and movable technology would surely be a safe bet against surprise tariffs.

 Fashion houses have the responsibility to use their platforms to be role models and put a message behind their campaigns.

If it takes t-shirts for teenagers to think that feminism is a worthy cause, so be it. As long as shirts are getting something done,  like encouraging individuals to be more educated and aware of social issues, it is worthwhile; ignorance helps nobody. Every reputable fashion house has the ability to share a cause at a negligible cost of raising awareness.

This role is especially necessary at the time, as today’s unfortunate political climate calls for more voices to speak out against the global currents of hatred we’re seeing. Fashion, which is relatively reputable for its race and sexual orientation- based equality, is not excluded from the responsibility that accompanies its influence. Fashion houses can do so much with their influence in terms of their choices in model casting, the themes of their shows, and the messages they share, if only their hearts desire.

We are still waiting for more hearts to desire such a thing.

The ability of high fashion to sell social responsibility and spread the benefits of modernization down to fast fashion labour through investing in their own technology are heavy privileges that have gone undeserved. Step it up, fashion industry. Ethical capitalism doesn’t have to be folklore.

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