Op-Ed | Watch Out for the Millennials

NEW YORK, United States — In the history of business, there have been few companies as successful as McDonald's. In its heyday, 2,000 new "Golden Arches" opened each year — an average of one every five hours. But, today, there are several new kids on the block: Chipotle, Pret a Manger and Whole Foods, to name just a few. These companies share two things in common. They're stealing large chunks of market share from legacy brands like McDonald's. And, critically, they have embraced transparency at the core of their operations and marketing. Today, after a long stretch of outperforming other food chains, McDonald's is struggling, in part, because they are losing relevance with today's consumers.

Will fashion companies suffer the same fate?

Millennials — who in the US alone already account for an estimated $1.3 trillion in direct annual spending and influence consumer attitudes among Gen-Xers and even baby boomers — have come to expect greater transparency about the food that goes into their bodies and they’re now starting to expect that same transparency in the clothing they put on their bodies.

According to The Boston Consulting Group (BCG), a global managing consulting firm, millenials are leading indicators of “status currency — the status and values that consumers wish to project through their purchasing decisions and their brand affiliations.” And, “One way a company can connect with this new status currency is by convincing millennials that they are ‘doing good’ when they purchase its brands. Companies need to demonstrate through their values, heritage, and meaningful actions that they help those in need, are socially responsible, are good environmental stewards, protect personal data, or are transparent and sincere.”

Did you see Chipotle's viral video about the scarecrow working in a meat factory? It has been viewed more than 12 million times on YouTube. So, what's the secret to its success? It embodies every one of the values that BCG recommends.

Now reflect that mirror back at the fashion industry. The standard in today’s fashion world flies in the face of this recommendation. The norm is secrecy over transparency; and profit over responsibility. And while fast-fashion is an easy target, even luxury brands have significant challenges throughout their supply chains.

Here are just a few frightening facts. According to the National Resources Defense Council, the cotton we use in our textiles accounts for 18 percent of pesticide use worldwide. And among the top 15 pesticides used in cotton are seven that the US Environmental Protection Agency considers likely human carcinogens. The World Bank estimates that textile dyeing and treatment contribute up to 20 percent of the entire world’s industrial water pollution. The chemicals used in the dye stage have been linked to cancer, asthma and neurological problems, according to studies by Greenpeace. And, finally, as the collapse of Rana Plaza attests, our quest for the lowest prices are coming at a high cost for the workers in our cut-and-sew factories.

These facts starkly contradict what the next generation of consumers say they want. And as more evidence emerges of the negative impact of our current fashion consumption habits, demands for change will become even more pronounced.

As any corporate visionary will agree, change brings opportunity. The shift in consumer attitudes opens a massive white space where any brand — old or new — can take the lead, from our own company Zady to Cross Company's rumoured new ethical mega-chain.

One thing is clear: sustainability and ethics must not be relegated to a company’s corporate social responsibility (CSR) department, but integrated directly into its main operations. Companies must create binding prerequisites with their suppliers. Standards, such as the Global Organic Textile Standard, have already been developed. Now it’s up to fashion labels to follow them.

To be sure, millennials still consume vast quantities of unsustainable and unethical fashion from some of the most profitable apparel-makers in the world. But attitudes are changing. Change with them and communicate that change to your customers and your company can win the brand allegiances of the millennial generation.

Remain the same and you risk becoming next season’s cold fries.

Maxine Bédat and Soraya Darabi are the co-founders of Zady, a sustainable fashion, shopping and lifestyle destination.

The views expressed in Op-Ed pieces are those of the author and do not necessarily reflect the views of The Business of Fashion.

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