The fashion industry is witnessing a paradigm shift, where sustainability and profitability are no longer at odds but are complementary aspects driving business success. This new approach, termed ‘Econogy’, is transforming the fashion supply chain, leveraging technology, and meeting changing consumer demands.
Econogy: Merging Sustainability and Profitability
The fashion industry is grappling with a volatile economy and the pressing need for sustainability. This has led to the emergence of ‘Econogy’, a term coined at the Techtextil and Texprocess fairs in Frankfurt in 2023. Econogy, a blend of ‘economy’ and ‘ecology’, signifies the merging of corporate social responsibility and economics. It emphasizes that brands no longer need to choose between sustainability and profitability.
Econogy offers multiple benefits. It directly influences sustainability, enhances process efficiency, and results in cost savings. It also boosts long-term brand competitiveness and helps meet changing customer needs, including the demand for affordable, low environmental impact products.
Leveraging Industry 4.0 for Econogy
Technology, particularly Industry 4.0 applications, is pivotal to implementing Econogy. Tools such as the cloud, internet of things, big data, and artificial intelligence provide full connectivity and visibility throughout the supply chain. These technologies optimize processes, enhance performance, and improve energy and resource utilization, thereby limiting the carbon footprint.
In the fashion industry, Econogy can begin at the onset of garment production. Intelligent and connected technologies can significantly reduce material waste, which constitutes about 60%-70% of production costs. Advanced systems supporting on-demand production improve warehouse management, limit excessive material consumption, and reduce the risk of unsold items.
Sustainable Business Models and Regulatory Compliance
The Econogy approach extends beyond the production phase. New technology platforms can trace and monitor the origin of fabrics, ensuring compliance with stringent regulatory requirements. They also enable brands to make informed decisions about using sustainable, certified, and recycled materials.
The EU and North America are introducing laws requiring each garment to have a digital product passport (DPP) or digital ID. The EU DPP is expected to be adopted by the end of 2025. DPPs allow for tracking the entire lifecycle of products and materials, providing greater transparency to companies and consumers.
Companies need to adapt their business models to these new regulations. They must shift towards circular economy practices, sustainable materials, carbon neutrality, social responsibility, consumer awareness, and compliance.
The Way Forward
Brands are adopting various strategies to embrace Econogy. Some are focusing on production and design, while others are investing in their omnichannel sales strategy or exploring how Industry 4.0 can facilitate Econogy.
The transition towards sustainability is still in its early stages for many fashion companies. However, viewing sustainable practices as an opportunity can pave the way for innovation, cost savings, and enhanced productivity. While Econogy requires short-term investment, it promises to offer a new value proposition to consumers and transform the fashion industry.
