According to a recent survey by the National Retail Federation (NRF), as of early July, more than half (55%) of back-to-school and college shoppers have started shopping for the new school year. This comes as back-to-school spending is projected to reach roughly $29 billion in 2024, with $11 billion alone accounting for clothing sales. The environmental cost of this shopping frenzy is substantial, with the fashion industry accounting for 10% of all global carbon emissions and significant waste.
Today, businesses are under increased pressure to be more sustainable as legislators roll out new compliance regulations and consumers double down on sustainable spending habits. Among these regulations is the European Union’s new Digital Product Passport (DPP) legislation, set to create transparency around product information to bolster both sustainability efforts and the transition toward a circular economy.
Billion Dollar Back to School Waste
The fashion industry is a significant contributor to environmental pollution, with the average U.S. consumer discarding 81.5 pounds of clothing annually. Of the 100 billion garments produced each year, 92 million tons end up in landfills. Children’s clothing is a major contributor to this trend. As parents prepare to update their children’s closets ahead of the new year, a spike in sales amid the back-to-school season leads to a surge in clothing waste. This is a challenge that retailers and their suppliers can no longer afford to ignore. As such, to remain compliant and keep pace with shifting consumer expectations, retail suppliers are embracing cutting-edge technology, like RAIN RFID, to reshape their approach to sustainability by optimizing inventory management and tracking with critical item-level visibility.
Growing Pressure to Adopt More Sustainable Practices
According to research by Harvard Business Review, Gen Z and Millennial consumers are 27% more likely than older generations to buy from brands they believe care about their impact on people and the planet. Further, among Gen Z respondents surveyed in Piper Sandler’s Taking Stock with Teens survey – a semi-annual research project examining the generation’s insights around media preferences, fashion trends and discretionary spending patterns – ranked environment as their number one most important political and social issue for the fourth consecutive survey. Consumers today are increasingly eco-conscious and expect retailers to be as transparent about their environmental practices. With younger generations placing greater emphasis on sustainability, brands that fail to drive sustainability in their supply chains risk compromising their customer base in the long term.
As consumers become more watchful, brands must also work harder to meet new regulations. New legislation like the EU’s DPP is pushing companies around the world to fast-track their sustainability efforts. Any company selling certain products in the EU – including U.S. companies which exported more than $350 billion in goods to the EU in 2022 – will be required to collect and share detailed information surrounding recyclability and materials used, as well as the manufacturing process. Compliance with the DPP will require that products be equipped with a physical ‘data carrier,’ which can take the form of a QR code, RAIN RFID tag or another digital identifier. These efforts – impacting suppliers, manufacturers, and retailers – are set to improve transparency and accountability in an age of fast fashion that is only worsening the clothing waste epidemic globally. Further, not only will finished products sold in the EU be required to adhere to DPP regulations, but as well, the components, materials, or semi-finished goods used in their production, regardless of their origin.
With rollout already underway and critical milestones ahead for suppliers and retailers alike, the time for ramping up sustainability practices is now.
How Can Retail Suppliers Drive More Sustainable Practices?
Investing in technology solutions to bolster sustainability practices within the retail supply chain will be imperative for ensuring businesses comply with global legislation while also aligning with consumer demands. In fact, according to a recent report conducted by the RAIN Alliance, of users surveyed, improving supply chain traceability ranked as their company’s top sustainability priority. RAIN RFID is a passive, battery-free wireless technology that connects everyday items to the internet. Taking the form of an attachable RAIN RFID tag or embedded into a product, retailers and their suppliers can collect item-level information in near real-time. RAIN RFID is helping many retailers, and their suppliers, drive more sustainable processes and practices throughout the retail supply chain. This includes inventory tracking of products, allowing businesses to know exactly what items they have in stock and minimizing overstock-related clothing waste, expiration of perishable items like beauty products, and carbon emissions in the process. Additionally, by deploying RAIN RFID, retailers are provided with crucial item-level visibility to easily identify bottlenecks and disruptions, allowing them to eliminate inefficiencies, reduce unnecessary transportation and ultimately, minimize their carbon footprints.
In addition to driving more sustainable practices to meet consumer expectations at a critical time, the deployment of RAIN RFID can be a great asset in helping suppliers meet requirements under the EU’s DPP, using the individual product data provided by their RAIN system to support compliance. When used in combination with a QR code, RAIN RFID tags provide a consumer-friendly solution to accessing product information while also offering suppliers with item-level tracking throughout the supply chain.
Though retailers have faced barriers to RAIN RFID adoption, according to a study by Accenture, they can overcome these by quantifying the return on investment (ROI), identifying the right suppliers/partners, and communicating with and training employees. Further, despite initial adoption barriers retailers may face, the benefits of leveraging RAIN RFID extend beyond meeting sustainability goals and compliance regulations but are also instrumental in helping a business respond to their most forefront challenges. Furthermore, as reported in a 2023 benchmark report by Retail Systems Research, “The Digital Transformation of the Retail Business Model,” 77% of top retailers strongly agree that the inventory visibility and operational improvements that RFID enables can trigger huge savings.
Faced with changing consumer expectations and the need to remain compliant in the age of evolving global regulations, retail suppliers must update their approach to operations management. Now is the time to prepare and optimize your supply chain in preparation for the new DPP legislation. The back-to-school season presents just one of several moments in time when retail sales skyrocket while levels of clothing waste increase. By adopting technology like RAIN RFID, retailers and suppliers can lead efforts to combat environmental pollution, optimize inventory management and visibility, reduce waste, and meet customer needs.
