Retail Supply Chain Transparency: It's Important to Consumers, Too

Retail Supply Chain Transparency: It's Important to Consumers, Too

All it takes today is an internet search to learn production details. It's no wonder, then, that consumers are questioning the cost of what they buy. Take apparel, for example. Luxury brands deliver higher quality, but at prices upwards of eight times the actual cost of production, eyebrows are raised. On the other hand, mass-production retailers like Old Navy have been criticized for working with clothing production giants like the Ha-Meem Group in Bangladesh that don't follow internationally recognized worker rights standards. While Old Navy et al claim to monitor their international factory conditions, audit reports are typically not revealed to the public. ResearchAndMarkets data reported the global ethical clothing market was worth nearly $6.3 billion in 2019 and expects it to grow to $8.2 billion in 2023. Between 2025 and 2030, the growth is predicted to reach $15.2 billion--and retail supply chain transparency is a key component to companies that are experiencing success.

Retail Supply Chain Transparency is Key to Success

In short, ethical production is becoming more important to consumers. Consider Everlane, an online clothing retailer based out of San Francisco, CA. The company has taken sustainable clothing production to a new level, priding themselves on “radical transparency” with an entire section of their website dedicated to showcasing their factories, employees, and production processes. As a result, the company's products are seemingly more valuable (with long wait lists on multiple items) because there is a compelling story to go alongside each piece.

To set Everlane apart from other ethical retailers, transparency was a founding principle, not an, empty, trendy add-on. CEO Michael Preysman set out to create a retailer with entirely transparent sourcing, production, and pricing. He launched Everlane with itemized costs for cotton t-shirts (their signature item and eventually brought the same visibility to dresses, leisure wear, and bags.

Relationship-based Sourcing = Better Pricing

When looking to create and market a new product, the Everlane team researches the current practices of luxury brands. They scour the internet and reach out to contacts in apparel manufacturing to track down the same factories that produce designer products sold for thousands of dollars. The goal: Create a relationship with the owners and employees and offer the same, high-quality products at a fraction of the price. This is all communicated through the company's commitment to retail supply chain transparency.

Factory Conditions: Employees Ensure Standards

Everlane requires stringent workplace compliance paperwork, but they are also diligent about monitoring every provider to ensure these standards are maintained. Their employees visit factories in person to evaluate product quality and work environment before choosing to work with them. They seek out spacious, clean workspaces with employees who are enthusiastic and engaged. Again, the company communicates this through retail supply chain transparency.

The Strategic Value of Retail Supply Chain Transparency is Going Nowhere But Up

The Harvard Business Review said it all about the value of transparency to today's consumer:

"As customers take greater interest in the origins and authenticity of the things they buy, providing them with tools to track provenance will become an important part of the marketing mix and will give producers and retailers new ways to capitalize on brand value. A key consideration is how much data to make publicly available, and in what degree of detail. Many firms have made bold assertions about how seriously they manage their supply chains. Transparency, at a granular level, gives credibility to those claims."

Find out how you can incorporate, and capitalize on, the benefits of brand transparency. Contact ArcherPoint to see how a retail ERP solution with robust business intelligence capabilities can help.

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