There needs to be an awakening when it comes to the use of data in the fashion industry, and it can’t just be because of regulations.
I know, I know… EU regulations and Digital Product Passports have been a huge topic on the Scandinavian MIND platform for the last year. The industry’s pressing issue remains the need for greater transparency and traceability of supply chains.
But when you consider it more deeply, an underlying message often gets left out of the narrative—how data can help boost productivity and profitability.
Quick background. In the next few years, the EU will demand that brands track the lifecycle of a fashion product, from its inception as a raw material to its production, distribution, and point of sale, all the way to its reselling or recycling into a new material.
This major compliance shift will also mean that a huge amount of data must start moving throughout the value chain. The Digital Product Passport alone is an unprecedented implementation of data tracking in a fashion industry that still uses fax machines to communicate between suppliers and brands.
According to McKinsey & Company, brands that integrate data into their processes ”can increase sales 10 percent by optimising their stock and stores, reduce inventory costs by up to 15 percent, and raise digital sales as much as 50 percent through personalised e-commerce for their shoppers” (Quote from Business of Fashion’s report “How to Turn Data Into Meaningful Customer Connections.”
This narrative has been present in many of the people I’ve interviewed recently in our podcast, including Natasha Frank, founder of DPP company EON.
”Brands are starting to see that, wow, this technology actually offers value to my core business and enables me to generate revenue and value and save costs in new ways,” she said in our conversation (listen here).
Natasha said she is excited about a business model shift happening simultaneously with the new EU legislation.
”Brands that are winning will be the brands that generate the most revenue per product through its life cycle. They’ll generate revenue from their products long after the point of sale. They’ll generate data from their products and insights from their customers, who are using the products. They’ll basically gain a competitive advantage by servicing and engaging users long after the point of sale.”
We heard a similar reasoning from GS1 Sweden CEO Jonatan Tullberg. GS1 is one of the companies spearheading the DPP development in fashion, particularly with its involvement in the Trace4Value pilot project. Jonatan emphasizes that we need to see data in the fashion industry as much more than regulatory compliance.
”If you see it as only ESG reporting, well, then you don’t really capture all the value, said Jonatan. But if you look at that data, it’s integrated as part of your business, it enables you to do a lot of other cool things. Many investors say they see a strong correlation between corporate sustainability and financial performance.” (Listen to the interview here.)
I think about this as I spend most of my days prepping for the upcoming Transformation Conferences in Helsinki (in May), Stockholm (in August), and Copenhagen (in August). As we’ve been discussing the events with our partners, the headline for this year’s theme is “Can data save fashion?”
Part of the show will be about showcasing all the interesting DPP projects currently happening in the Nordics. Stockholm-based Impulso will be present to talk about their Vinnova-funded DPP pilot focused on the retail part of the value chain. Helsinki-based IOXIO will talk about how the technology they have developed in DPP pilots for battery and manufacturing can help jump-charge the textile industry. And yes, GS1 Sweden will be present as well.
There will be more on this in the weeks leading up to the events. Don’t hesitate to reach out if you or your company want to participate or collaborate. Just hit reply to this e-mail.
Stay tuned.
