Clothing is, far and away, the leading e-commerce category on the planet. Across the top 11 global e-commerce markets, 58% of consumers who have made a cross-border purchase said they bought clothing from an online retailer. Within the global e-commerce apparel sector, there's one niche category, in particular, showing robust growth: ethical and sustainable clothing.
Consumers are now paying closer attention to the way products are made, and how the workers who make them are being treated. A survey in the United Kingdom by Morgan Stanley Research revealed that 58% of consumers ages 16-24 believe that ethics are "very or somewhat important" when shopping. And market players of all sizes are now responding to this shift. Certain mass-market brands now offer sustainable fashion options. In McKinsey's report, The State of Fashion 2020, 67% of brand respondents said that "using innovative sustainable materials" is important to the future of their business. In fact, some fashion industry experts have pointed to the sustainability trend as one of the reasons for the recent demise of several fast-fashion brands.
Defining Sustainability for Your Brand
For brands and retailers who are considering entering the sustainable apparel sub-category it's important to define what, exactly, ethical fashion means to you as a company. You should also research what sustainable fashion means to your customers in the markets where you do business. What will you stand for and what is your mission? How will you demonstrate your commitment to sustainable apparel?
Keep in mind that there's no standard definition of "ethical" and "sustainable" as they pertain to fashion and human rights. There are several different standards organizations that focus on different aspects of green manufacturing of apparel, and environmental regulations vary across the globe. For example, the Grenelle II regulation stipulates that clothing sold in France must have a label providing information on its carbon footprint. The Transparency in Supply Chain Act states that retailers that sell in the state of California must guarantee that (to their knowledge) there is no human trafficking or other human rights violations in their supply chains.
Don't Trip Up on Market Entry Details
Sustainable brands that experience increased demand from international customers often make the decision to jump head-first into new global markets. They may be in a rush to seize the opportunity and expand global revenue. But doing so without investing the proper time and technology into providing a seamless, localized customer experience will undo all of the positive gains your brand has worked so hard on. Even if you have the best quality sustainable goods and an outstanding reputation, it won't be enough to overcome any barriers your website presents.
Being a green manufacturer of ethically sourced goods won't rescue you if consumers have longer delivery lead times, or are hit with unexpected taxes and duties when the clothing arrives on their doorstep. According to our research, delays in shipping and unclear taxes and duties are among the top barriers to cross-border shopping in the top 11 markets.
Outerknown: Overcoming Market Entry Challenges
Sometimes, a brand's market entry strategy may need to change or evolve over time. This was the case for Outerknown, a U.S.-based clothing retailer founded by champion surfer Kelly Slater. The brand's mission to protect natural resources, empower the people crafting their clothes, and inspire change within the apparel industry resonated with domestic and international consumers alike. The brand saw volumes of traffic coming to their e-commerce website and began partnering with wholesalers in key global markets. However, Outerknown struggled to localize its currency displays online, target its product catalog to international markets, and quickly learned about the high expense of international shipping.
Travis Heard, Head of Finance, Operations and Strategy for Outerknown, shared this story with other global retailers last year at the WWD Digital Forum. "We were hearing constantly from our international customers that our prices were too expensive, our shipping rates were too high, and duty calculations were wrong. That was when we realized we had to make a change," Heard told the WWD audience.
Outerknown had always planned to expand globally. The company knew how crucial it was to strengthen brand loyalty with these international consumers in order to keep growing. That meant launching localized e-commerce websites that presented Outerknown as an international brand that was in-tune with local market needs. It also meant developing strong distribution networks in each global market in which they wanted to sell. All of those aspects of e-commerce are very common barriers when a brand tries to scale internationally. The high cost of international shipping is a top barrier for both cross border e-commerce retailers and consumers.
Like many e-commerce merchants, Outerknown ultimately found a technology solution to help remove these barriers to manage all of these complexities. This decision helped the sustainable brand gain more control over pricing, improve their ability to exclude products in certain markets on a country-by-country basis, apply different checkout methods that included any relevant duties, and utilize the right shipping options available in the global community by each country. Once these challenges were solved, Outerknown achieved a 100% increase in international sales while reducing its year-over-year international shipping costs by 60%.
Just like any other cross-border e-commerce brand, sustainable apparel merchants must operate in a dynamic way that allows them to provide a seamless customer experience, end-to-end. Offering beautiful, well-made clothing that doesn't contribute to climate change or unfair work practices is important, but to truly stand out and create a strong relationship with global customers, you'll have to offer them an online experience that matches the quality, transparency, and integrity of your goods.
