“The fast fashion industry is a challenging and dynamic sector, characterised by short product life cycles, high product variety, high volatility, low predictability, relatively low margins, and high levels of impulse purchasing” (Perry, 2012, p. 2). It has been scrutinised for its unethical and immoral business practices, as it often relies heavily on low manufacturing costs to meet the continuous high demand for new and cheap clothing.
The scale of throwaway consumption is resulting in a huge amount of waste being continuously produced (Ballie & Woods, 2018), meaning companies like Boohoo are being held more accountable by consumers.
As a result, the pressure is building for it to adapt its current test-and-repeat business model by implementing more sustainable design strategies such as zero-waste cutting and upcycling, to optimise material lifespans and reduce fabric waste. (Earley & Goldsworthy, 2017), (Mcquillian & Rissanen, 2018).
Implementing CSR within a supply chain requires retailers like Boohoo to consider the social and environmental impact of its business operations (Perry & Wood, 2019, p. 2). It is often a huge financial risk for businesses to produce sustainable and ethically sourced clothing at a price which its consumers are willing and able to pay in the current economy (Barr, 2020).
This report will investigate the ethics of Boohoo regarding its corporate social/environmental responsibility and rethink its current supply chain in order to better the environment and reduce the longterm impacts fast fashion is having on the planet.
The main purpose of this report is to analyse what works well for Boohoo’s current supply chain, and how this could be improved and adapted to become more sustainable and ethically correct. By doing so, it will improve the brand image and reputation, encouraging more customers to continue purchasing from Boohoo.
Boohoo is an online fast-fashion retailer which is a part of the Boohoo PLC group. It was founded in Manchester in 2006 by Mahmud Kamani and Carol Kane as a singular brand but has now expanded into “a portfolio of innovative fashion brands targeting style and quality conscious consumers with up-todate and inspirational fashion.” (Boohoo, n.d.). It owns top fashion brands such as Pretty Little Thing, MissPap, and Coast. It operates as e-commerce in an international market, shipping worldwide.
Boohoo currently uses an agile supply chain, with two weeks lead time, and sources over 50% of its products from the UK, which allows the company to offer the latest trends and styles very quickly. (Weinswig, 2017).
Before the rise of fast fashion, retailers placed large orders to meet an entire season’s demand and decided what and how much stock to buy using past sales data alone. However, due to the lack of reliable data, this often resulted in retailers having to store large inventories and hold frequent sales to clear excess stock.
The fast fashion industry has transformed this traditional push method, with businesses like Inditex introducing the test-and-repeat model, which allows businesses to produce initial designs in small quantities to test demand, and then quickly mass producing if popular with customers (Zailan, 2018).
Boohoo has been faced with accusations of exploiting underpaid workers and utilising poor-quality materials on numerous occasions, the most recent being in 2020 when it was revealed by The Sunday Times that the staff manufacturing the clothing in a factory in Leicester were being paid less than minimum wage. It is therefore more important than ever for Boohoo to prove to consumers its commitment to change, by adapting its current business practices and supply chain to be more ethical and improve its corporate social responsibility.
Having good CSR shows Boohoo’s customers that minimising the negative impact of its business operations is a priority, and something it takes seriously. Poor CSR practices can result in bad publicity, consumer boycotts, and loss of retail brand value, as seen in the past with the Leicester factory scandal.
Consumers are becoming more conscious of the impact clothing production and fast fashion is having on the environment, meaning businesses within the industry are being forced to consider factors outside of style, price, and quality, and instead focus on more sustainable practices. However, this demand is juxtaposed with that of low prices and quick turnarounds, meaning the conflicting pressures of cost and lead time present a real challenge to the successful implementation of CSR within Boohoo’s supply chain (Hearson, 2009).
The global shift of garment manufacturing to lower labour-cost countries along with developments in telecommunications and the internet have increased awareness of ethical issues in fashion supply chains and therefore the fashion industry has become a focal point for the debate on worker exploitation (Perry, 2012).
Boohoo’s tendency to produce on-trend items taps into the younger generation’s preference for newness and social acceptance, which suits its target consumer. These values are unlikely to change, so the business model and supply chain of Boohoo could remain successful for many years (Cuofano, 2021). However, this method is highly detrimental to the environment, and other methods could be used to reduce the impact on the planet whilst remaining highly profitable and competitive.
Boohoo utilises a test-and-repeat business model, which revolves around the concept of producing items in small batches initially to interpret consumer demand, then quickly reordering strong-selling products. “The sourcing model reduces inventory-holding risk and enables rapid market response to quickly satisfy customer product demand,” (Weinswig, 2017).
The ability to experiment with small ranges minimises the financial risk of a product not selling well and ensures all the products Boohoo releases are new and exciting, meeting its target consumer insatiable demand for the latest trends (Sullivan, 2017).
In 2020 despite the severe impact of the Coronavirus pandemic on the economy and consumers’ spending habits, Boohoo reported over £1.7 billion in sales and introduced six well-known brands to the group (Shepard, 2021). The brand has continued to expand and grow internationally, with £600 million worth of sales generated in the US alone, a 65% increase from the previous year (Shepard, 2021).
One of the main reasons for Boohoo’s high profitability is due to its supply chain and the use of the test-and-repeat model. It allows the business to keep costs low but still be sold at an affordable price for its target consumer of 16–24-year-olds.
In July 2020, Boohoo came under scrutiny for overexploitation claims, following the accusation of one of its top suppliers in Leicester "Jaswal Fashions" were paying staff less than minimum wage and operating in unsafe working conditions due to Leicester being on a strict local lockdown due to the COVID-19 pandemic. Boohoo has since stated that they will terminate their dealings with any of their suppliers found breaching their code of conduct in the workplace (Nicole, 2020) and claimed to of “commissioned an independent review of the Leicester supply chain and published the findings in full.” (Boohoo, n.d.).
As a result of the investigation, shares invested in the company dropped by 18% (Butler, 2020) and the business faced boycotting from many customers refusing to purchase from Boohoo again after the allegations were brought to light. This tarnished the brand image and reputation of Boohoo, and directly impacted its customer loyalty. Following the investigation, Boohoo hired Andrew Reaney, former Primark executive as its responsible sourcing director, in an attempt to redeem its customer’s trust.
It is essential that Boohoo learn from this and use it as a real drive for change for its future operations in terms of its CSR and ethics regarding its suppliers and supply chain, otherwise, it may result in more significant damage to the company’s reputation and long-term relationships with customers and suppliers around the globe.
At first glance, Boohoo do appear to be opaque about its environmental and labour impacts as well as its policies (Rauturier, 2020), with dedicated pages on its website providing detailed information regarding its relationships with its suppliers and the standards it aims to uphold within its supply chain, listing the name of the factories and where they are located.
Boohoo states that “we rely on strong relationships with our suppliers to provide our customers with on-trend products at a great price. Managing our supply chain ethically and sustainably is essential as we continue to grow as a business,” (Boohoo, n.d.). However, this information seems to be vague and hard to find, suggesting the facts and figures provided may not be accurate.
If Boohoo is as transparent as it says, it should further promote this and utilise it as a marketing strategy, to show its customers it is making a real effort to better its supply chain to improve sustainability.
Boohoo has the opportunity and potential to transform its current supply chain by partaking in the circular economy, in which production is based on planned reconstruction and regeneration using recycled and reworked materials. (Franco, et al., 2019). “The circular economy offers a new avenue for design, but designers will need to learn how to adopt a more proactive, systems-based approach that truly closes the loop.” (Goldsworthy, 2014).
In 2018, Nick Beighton, ASOS’s chief executive appeared alongside representatives from Boohoo and Missguided as part of a debate surrounding the social and environmental impacts of online fast-fashion brands. He stated that “fashion retailers that fail to adopt circular economy principles and encourage consumers to make their clothes last longer will fail to survive in a new era of consumer awareness,” (Beighton, 2018).
The fast-fashion industry is highly competitive and ever-growing, therefore, if Boohoo wishes to remain one of the market leaders, it is essential its business practices and supply chain is compliant with its consumer expectations of a more sustainable future. More businesses are becoming aware of the impact fashion is having on the planet and as a result, are investing time and money to better themselves in an attempt to reduce this.
One company in particular driving this change is Patagonia, which prides itself on ensuring its business activities focus on protecting the planet and prioritises both its environmental and social responsibility, including a detailed list of all the materials it utilises to produce apparel, as well as its supply chain and how the clothing is produced fairly (Patagonia, 2017).
Although Boohoo has begun to put plans in place to adapt its current practices highlighted by the sustainability report on its website, there is still a real need for change and impact before it can be considered an ethical and sustainable fashion brand.
(Rosmarin, 2020) reported that online searches for sustainable fashion tripled between 2016 and 2019, thus signifying that sustainability is increasingly becoming a more important factor in consumers purchasing decision- making (Euromonitor, 2018) and as a result, they are making more conscious decisions in regard to what they are buying and are willing to pay a premium to meet the need for guilt-free consumption.
The demand for sustainable yet affordable clothing is ever-growing, and Boohoo must act now whilst this trend is still emerging. If not, customers will find other alternative brands to purchase from, which meets their need for on-trend and fashionable clothing that is produced ethically and causes less harm to the environment.
To address this need for change and help improve both its corporate social and environmental responsibility, there are steps which Boohoo must take to transform its supply chain and ensure the brand image doesn’t become tarnished by past accusations and scandals, and to further reduce the impact fast fashion is having upon the planet.
Clothing companies are not yet required by legislation to take responsibility for end-of-life recovery of the products they sell, unlike electrical and electronic goods. However, some brands have introduced take-back schemes to encourage consumers to deposit old clothing in stores, which is then donated to a charity or recycled.
Financial incentives have been used to encourage consumers to take part in this scheme, through discount codes or vouchers, and these have been relatively successful (Parliment, 2019, p. 45).
Boohoo has begun to do this, partnering with the reGAIN, an app that allows users to recycle unwanted clothes in exchange for discounts and vouchers. The digital takeback scheme has been created as an effort to drive the fashion industry towards becoming a more circular economy and will allow anyone with the app to ship their unwanted clothing free of charge from more than 20,000 drop-off points across the UK (Stevens, 2018).
Founder and CEO of regain Jack Ostrowski stated that “we know that we can’t stop people from buying clothes, but we can incentivise them to change their buying habits. Our long-term goal is a world in which clothes never become waste.” The Regain app is providing a modern solution for fast fashion lovers by rewarding sustainable behaviour and is the first step towards transforming the fast fashion industry into a circular economy (Ostrowski, n.d.).
Although Boohoo is a part of this scheme and has been for multiple years, there is a lack of information about this incentive on its website, and the majority of consumers will be unaware of the app. This is something Boohoo must improve upon if it is to strengthen its supply chain and its relationship with customers, being more transparent is the first step to raising awareness of the current issues it faces in becoming more sustainable and ethical.
To encourage more consumers to take part in the scheme, Boohoo should make this a focal point on both its website and social media platforms, to improve the brand image and urge more consumers to recycle their unwanted clothing, as opposed to discarding them and sending more waste to landfill.
To break the cycle of continuously producing throwaway fashion and improve its overall ethics and CSR, Boohoo needs to be innovative and creative in all aspects of its supply chain. many brands are beginning to rethink and evolve their business practices to meet customer expectations. Sustainability can become a marketing strategy, and as well as meeting customers’ expectations, a sustainable brand image can differentiate Boohoo from other fast-fashion companies, providing a competitive advantage (Franco, et al., 2019, p. 57).
The (Rogers, 1962) Diffusion of Innovation Theory explains how over time, a product or idea gains momentum and expands throughout society. The end result of this innovation diffusion is that this idea is adopted by civilisation and becomes a part of the social system (LaMorte, 2019). One fashion designer in particular who has become an innovator for sustainable fashion is Stella McCartney, whose personal commitment to sustainability has defined her.
The brand’s ethos is to operate as a responsible, honest, and modern company, with sustainability being the foundation of all aspects of its operations. (Radclyffe-Thomas & Varley, 2019). By disrupting the traditional and rigid supply chain, the brand has transformed the way fashion is produced and as a result, gained a reputation for pioneering the change needed within the industry.
If Boohoo wishes to rethink its supply chain to become more ethical and improve its CSR, it should consider becoming an early adopter of some of the practices Stella McCartney has introduced, such as the use of vegan and organic materials, and part-taking in a circular economy.
Historically, fashion diffusion was proposed through hierarchical or horizontal frameworks, such as the trickle-down, trickle-across, or trickle-up theories. These trickle theories demonstrate how fashion moves through society and why trends become popular with certain social groups (Mohr, et al., 2021). The changes luxury brands like Stella McCartney are making have already begun to trickle down to fast-fashion brands (Anon., 2016).
For example, Boohoo has recently introduced a “Ready For The Future” range, which uses 95% recycled polyester and 5% elastane made from plastic, which would have otherwise ended up in landfills (Jahshan, 2021). However, this is still a relatively new collection with limited products being a part of it, therefore Boohoo must continue to add to the range and slowly transition into producing all the clothing from recycled materials.
Supply chain transparency requires a business to know what is happening in its supply chain and to communicate this knowledge both internally and externally (Bateman & Bonanni, 2019). A business is considered to be transparent when it publishes the names of suppliers, sustainability conditions, and relevant purchasing practices relating to each of them, ensuring this information is easily accessible to the public (Brun, et al., 2020). Boohoo have already taken the first step in being more transparent by publishing its suppliers on its website, but more needs to be done to make this a real priority of the brand, rather than simply following the trends.
Transparency within the fashion industry has become more prominent over the past few years, with increased consumer concern about brands’ supply chains and the way they treat workers involved in the production of the clothing. Many companies fear that being too transparent about their supply chain would undermine their competitive advantage or expose them to criticism (Bateman & Bonanni, 2019). However, it is a great way to empower consumers and build a positive and engaging brand image which can result in greater consumer loyalty. This compensates for the added challenges that come with using a more complex and costly supply chain (Euromonitor, 2018).
Consumers’ trust can only be regained through open communication and information, and transparency is becoming a fundamental issue within the fashion industry (Brun, et al., 2020). To achieve this Boohoo could join the transparency pledge, which is a commitment made by businesses within the fashion industry to publicly disclose all elements of their supply chains and publish its manufacturing sites (Anon., 2016).
Competitors of Boohoo, such as ASOS Missguided have already aligned to the pledge, therefore Boohoo should consider doing the same, to not only improve its CSR and relationship with its customers but also remain competitive and not fall behind other businesses in the market.
The (Fashion Transparency Index, 2021) has driven change by normalising the concept of transparency within the industry and making public disclosure of social and environmental practices the new norm. It measures what brands know and publicly shares about their human rights and environmental impacts across their supply chains. The final score Boohoo achieved in this report is between 11-20%, meaning there is much more that needs to be done to improve its supply chain and transparency regarding this, as e-commerce rival ASOS scored 4150% (Fashion Transparency Index, 2021).
As a brand, Boohoo has a responsibility for determining the longevity of the clothing it produces. Although the test-and-repeat model Boohoo currently uses is highly successful, its long-term impacts on the planet mean it’s not sustainable long-term.
There are several ways Boohoo can ensure its products are designed to last, such as the physical quality and durability of the materials used, the way the garments are constructed as well as the accuracy of the clothing size and fit (Redress, 2019).
Extending the product lifecycle of half of all UK clothing by just 9 months would decrease the UK’s carbon footprint by 8%, water footprint by 10%, and textile waste footprint by 4%, per tonne of clothing (Redress, 2019). Therefore, if Boohoo’s customers are fully satisfied with their garments and it fulfils their needs, the purchase of additional garments would no longer be necessary, thus avoiding overconsumption and reducing the number of resources used to produce new items (Redress, 2019).
A circular supply chain model will allow Boohoo to avoid the overbuying stock, wasting materials, or selling products cheaply just to make room for more. Instead, it will allow the brand to sustain a more efficient flow of materials through a circular system, where resources are kept in use for as long as possible (Ballie & Woods, 2018).
By adopting this circular approach to its supply chain, it will allow Boohoo to slowly reduce the amount of fabric waste in the production process.
As concerns for the environment grow, so do consumers’ expectations, with a demand for transparency about how products are made, by who, and out of what raw materials. Customers need to be able to rely on Boohoo, to be honest and up-front about its operations and how it has a direct impact on the planet and people involved with the brand, whether they make, promote, or buy the products (Radclyffe-Thomas & Varley, 2019). Therefore, Boohoo must adapt to this by being innovative in every aspect of its operations, starting with its supply chain.
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