Day 12

Another day gone, and more amazing experiences to remember it by! Today, we returned to Cattolica University for a guest lecture by Dr. Francesca Rinaldi about fashion business models and sustainability. Her lecture taught me valuable information about the current fashion business practices and how they address issues like sustainability.

First, we discussed the revolution of the fast fashion model. In the traditional fashion model, it takes about 2 years to create a collection. Companies must attend color meetings, yarn and textile fairs, and then debut the line at a fashion show. Instead, fast fashion (like Zara and H&M) takes inspiration from the catwalk and creates a collection within a few months. Fast fashion companies can bypass the extra planning period by taking risks and guessing about color and textile trends. However, these risks are minimized because companies produce in small batches. If a collection is popular, this creates a scarcity effect that makes customers more likely to buy the product. There is a chance that when they come back to the store, the item will be out of stock, so they must buy now.

Not only has the fast fashion model revolutionized the industry, it has changed customer’s buying habits. As previously stated, customers purchase items immediately after seeing them because of scarcity. However, there is a bigger change. Before fast fashion, new lines were debuted for new seasons and customers shopped once every season. Now, products in stores are changed monthly, and customers go shopping about twice a month.

Even though fast fashion changed the industry, traditional models still exist and are profitable. The first type of brand that we talked about was luxury. Luxury brands like Gucci, Hermes and Bulgari market to customers the values of durability, exclusivity and timelessness. If you buy a product from Gucci, there is a strong likelihood that it will be a classic piece that can be worn for many seasons. Luxury companies tend to have high vertical integration. The next type of brand are designer brands like Armani, Versace, and Valentino. In the past, these companies made brand extensions to reach customers in other markets. For example, Armani launched his more affordable Armani Jeans brand. However, now designer brands are closing their extensions and returning to a more vertically integrated model. Next, we discussed premium brands like Coach and The North Face. These companies have a good price to quality ratio that entices customers. The final fashion model is retailers like H&M and Zara. These companies are involved in fast fashion.

The most interesting part of Dr. Rinaldi’s lecture was her discussion of sustainability and CSR (Corporate Social Responsibility). First, she introduced the triple bottom line approach. Generally, companies will focus on a single bottom line: profit. However, with the triple bottom line, they focus on profit, the planet and the people. An example of a business model that runs like this are Benefit Corporations. B-Corps are fairly new to the industry and are legally recognized entities by the United States and Italian government. Ben and Jerry’s ice cream company is a Benefit Corporation that aims to be sustainable while also making a profit.

Often, fashion companies will “green wash.” Green washing is when a company gives off the perception to customers that they are sustainable, but are not in their entire supply chain. They may reduce fossil fuel emissions in manufacturing plants, but are not sustainable in their other practices, like agriculture. However, because they are sustainable in one part of their supply chain, they can market to consumers as “green.”

The last curious fact that I learned is that next to oil, the fashion is the second most polluting industry. Some of this is due to cotton. Before today, I thought that cotton was a good fabric and if natural, was made sustainably. However, I was wrong. 10,000 Liters of water are required to manufacture one pair of jeans, and the pesticides used on cotton plants are harmful. In India, there are 40,000 deaths a year related to accidents with these chemicals.

While these statistics may seem daunting, there is hope for the fashion industry to become more sustainable. Companies like Patagonia are working to improve their supply chains. This is to benefit customers and employees. Employees want to work for companies that share their values, so it is important for some people that their company does all they can to be sustainable. One way that Patagonia works to be environmentally friendly is by recycling polyester and reusing it. Also, due to the harmful effects of leather manufacturers on the Earth, chemical engineers are working on a way to make leather out of wine. It will be very interesting to see if this strategy works.

After the lecture, we had our final lunch with the Cattolica students, and visited the Armani Silos Museum. Here, Armani displays his most famous pieces that have been worn by powerful people and featured in movies. I have included a few pictures below. It was amazing to see the designs up close and to learn about Armani’s brand that revolutionized fashion. He literally created the working suit for women and pioneered the idea for many other articles of clothing!

Tomorrow is our final day in Milan! I am so sad to be leaving this beautiful country, and that it is supposed to rain all day for the first time in 2 weeks. Hopefully we can find a way to stay dry! Ciao!

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