BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

H&M Group Experiments With Made To Order ‘Fast Fashion’ To Tackle Overstock

Following
This article is more than 3 years old.

Alongside circular transformation, reducing excess stock in the fashion industry is a major barrier to achieving environmental sustainability. At the root of this problem is a pricing model that has dominated mass-produced fashion since the 1960s, when cheap trend-driven fashion led to outsourced production. This model makes ordering large quantities cheaper, even if a large portion is heavily discounted or, worse, burned or landfilled. A made to order system that produces on-demand is an alternative business model proving successful for some premium fashion brands, including Son of A Tailor. But with high volume ‘fast’ fashion contributing significantly to fashion’s overstock problem, affordable made to order products seem a perfect solution, at least for consumers and the planet. But how feasible is affordable pricing when ordering individual units, rather than hundreds of thousands of garments at once, and can it be profitable for fashion brands?

Sustainability of made to order vs mass production

According to Walden Lam of Unspun, the technology-driven made-to-order jeans company, the answer is yes. Established in 2015, the VC-backed company aims to make the fashion industry more intentional, inclusive, and sustainable through custom-fit, on-demand, and automated manufacturing. The company's overarching mission is to reduce global carbon emissions by 1%. To achieve this, they aim to transform 25-30% of the global jeans industry to a made-to-order model. This is based on a Life Cycle Analysis (LCA) conducted in 2019 comparing Unspun jeans to an otherwise industry standard pair of jeans (using data came from the Levis LCA for the 501 jean). Unspun’s LCA indicated that “approximately 24% carbon footprint (was) saved by doing on demand (production).” Consequently, Unspun Cofounder Lam said: “We cannot be a stand alone brand.  We need to be working with other brands and collaborate with H&M and the like.”

Feasibility of the made to order business model

During an recent interview, Lam explained to me that at a price point of $80 and above “there is room to create an on-demand model that is profitable.” This “best guess” is based on their custom-fit body scanning to jeans production model, delivered via their retail stores in Hong Kong and San Francisco, and their online store. Essentially, they test and develop their digitalization and custom-fit algorithms on their own Unspun customer base, to then apply this to collaborations with larger industry players.  

Within their own operations, Unspun has evolved to create made to order jeans with low returns and high satisfaction rates. With 3D scanners in their two retail stores, Lam explained the development of their software and digitalization solution: “Initially we manipulated 3D garments around the 3D body scan, then extracted the 2D (garment) pattern. We ran into issues with 3D to 2D translation (in terms of accuracy) and have begun to apply machine learning to this process.” He added: “When you are selling a $200 pair of jeans (the customer) will scream and shout (if they are not right).” The customer experience is best delivered in store, he said, where a 3-second body scan is followed by an augmented reality Tryon on the customer’s avatar. Here, the customer can see themselves in the available styles and denim washes, as well as touch physical swatches of the fabrics to inform their order. The typical time from purchase to delivery is 2-3 weeks. 

Automation for perfect fit and fast turn-around

Regarding refinement of the fit of their jeans, Unspun’s fit algorithm has evolved to include not only body measurements but geometry, body shape, and body softness— factors that determine the custom sized garment pattern. From this, a digital tech pack with quality control measurements and the custom sized garment pattern pieces, is provided to the manufacturer. The process sounds relatively straightforward, but establishing a made to order business model depends on convincing manufacturers to produce small orders. “We had to beg manufacturers to do this,” said Lam. “In a factory pumping out hundreds of thousands of garments per month (it was difficult), but we started with a sample run, with (allocation of) half a sewer for a week to create it.” Following this, they concluded that a made to order assembly line and automated conveyor belt with 20 staff, can (produce) about 200 units per day. In terms of finding further efficiency, Lam said, “Where it falls down is the manual fabric cutting—if this could be automated this would be key.” Here he touches on the importance of automation in garment manufacturing to achieve accuracy, keen pricing, and swift turn-around times. All of which are hallmarks of industry 4.0.

One manufacturer willing to work with Unspun is Frontline, who are part of the Ellen MacArthur Foundation Jeans Redesign project. The brand recently launched a new light wash jean with Frontline in small batches of 10-20 units. “Initially they were hesitant,” said Lam, “but Covid-19 has meant they are more flexible.” The reason? Reduced commitment in terms of chemicals, raw materials, and manpower, along with 4 times higher price per unit, making small orders relatively attractive.

Made to order at scale

A limiting factor of the global expansion of such made to order technologies and supply chains is testing them at a corporate level to determine optimal processes and prove profitability. To push their solution to scale, Unspun has teamed up with Weekday, an H&M Group brand, to produce custom fit made to order jeans with a price tag of around $100US, compared to their usual jeans pricing of $40-$80. The collaboration launched in the brand’s Götgatan store in Stockholm earlier this month, in partnership with event and experience company YR Live and body scanning specialists, TG3D. Of the partnership with Weekday, Lam explained that accessible-priced on-demand jeans make sense for several reasons. In commercial terms, eCommerce return rates “can be up to 40% for jeans,” causing excess inventory and reduced profitability. In 2018, the H&M Group revealed they had $4BN worth of unsold inventory, prompting industry-wide questions about the environmental (and economic) impact of the mass-production model and resulting deadstock. Thirdly, he explained that the Unspun model offers “a different way to interact with customers,” and a “20-40% (price) uplift on custom products.”  

Digitalization in economic, environmental and social terms

Couple the benefits cited with digitalization to support on-demand production and this starts to look like an attractive business model in environmental and economic terms. It has to be stated that achieving this model does rely on increased automation, which would have a serious impact on the world’s largest producers of ready-made garments, mostly in Asia, and on the garment workers whose jobs would be replaced. This remains an ongoing area of concern and debate. For this Weekday collaboration, Lam explained that the brand worked with own manufacturers and Unspun provided the digital solution. The “back end (technology) process takes around 3 weeks to put in place, but we don’t have full transparency over the business relationship between the brand and manufacturer,” said Lam.

At the time of our interview, the first orders of jeans had reached Weekday for customer collection. The initial response was positive, with no returns from the 30 or so orders fulfilled at that time. This serves as an initial use-case for accessible priced custom fitted and made to order jeans. However the evident hurdles and considerations on the road to achieving this at scale include digitalization of the fashion industry supply chain, which is lagging behind other industries, and planning for implementation of Industry 4.0. Both technological and social planning is required, given that today's successful industry was built upon the (cheap) labor of garment workers in Asia. Digital transformation is arguably an environmental imperative, and Unspun’s solution offers promising advances in this area. However, in parallel, safeguarding the livelihoods of millions of garment workers is necessary to avoid replacing one global catastrophe with another.

Follow me on Twitter or LinkedInCheck out my website