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Transparency – The Key Challenges of the Brand-Supplier Relationship

fashion mckinsey supply chain transparency Apr 12, 2019

Fashion companies are facing more connected, aware and sceptical consumers that expect full transparency across the production chain. Understanding the consumers’ need for trust, fashion players have no other option but to change their practices across their businesses and be more transparent.

But what transparency could actually mean for the fashion industry?

Several fashion brands have left consumers wondering whether their purchase is coming from a transparent and fair supply chain or not. More frequently we wonder: who made this? Are the makers of this product working in a safe place with adaptation to law standard?

“Social media has enabled certain transparency,” says Farfetch's Chief Strategy Officer Stephanie Phair. True, social media helped to speed-up the answer, and nothing is easy to hide anymore.

For this reason, a high number of brands realized that moving towards full transparency is a mandatory step in their imminent plans. This will push them to share their products’ path more and more.

One remarkable example is H&M-owned Arket, which shows where each product is made, giving the customer a clear picture of the actual process.

Another interesting article from McKinsey & Company titled “What radical transparency could mean for the fashion industry”, says that “millennials are at the vanguard, with 52 percent agreeing that they always research for background information before buying, compared with 45 percent of Gen Z consumers and 41 percent of baby boomers. “

Consumers are more satisfied when they are buying from brands that share their processes and show their efforts in producing high-quality goods combined with full transparency. In fact, more than 60 percent of consumers are ready to pay more for sustainable products, and almost 50 percent of millennials prefer to know where their products are made before purchasing, compared with 37 percent of Gen Z.

As a result, more players will use their best practices to create a competitive advantage: eventually, they will be ready to admit when they are at fault more often and will be willing to solve issues faster.

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