Yahoo Finance Today’s Preorder a Sustainability Solve? Think Again
In recent months, the preorder model — used by the likes of Moda Operandi, Telfar, House of Sunny, newcomer Cider and Farfetch — is being seriously resurfaced as a remedy to fashion waste.
While the traditional way of producing marks out steps like design, manufacturing, marketing, sale and distribution in a logical manner and months out, the preorder model flips that on its head: instead, the consumer decides ahead and then waits. The model has been heralded as a key sustainability solution as overproduction rages, but some nuances remain.
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Discounts, Waste Still Occur
Although the blanket appeal of preorder is to reduce overproduction by getting a direct read on demand and thereby crawl away from deep-discounting culture for products that don’t move or don’t move fast enough — waste and discounts still occur somewhere along the way.
Producing only two seasonal collections, spring and fall, U.K.-based House of Sunny keeps its vintage-inspired product moving mindfully with preorders and drops.
When WWD asked where waste occurs, and if it’s any different from regular production, House of Sunny cofounder Sunny Williams said: “Most waste occurs with print placement which is why we try to avoid it where possible.”
The brand is thinking about how to utilize this waste, however.
This season, House of Sunny used production offcuts to make ties, including its “Let’s Get Out of Here Tie” featuring a comic-strip print of retro planes cruising diagonally across the repurposed fabric. The tie arrives in time for May 2022 delivery.
While not disclosing exact metrics on the environmental savings of preorder, House of Sunny cofounder Camilla Ley admitted: “Preorder definitely has its challenges, and showcasing and selling your ‘next’ collection isn’t for everyone. It’s taken a lot of work behind the scenes to be able to set up a system that works.”
Designers can find work-arounds on order minimums with smaller manufacturers or opt for the full logistical handoff to global smart supply chain service providers. Upfront costs for made-to-order fashion can cost close to $18,000, in the case of packages from N.A.bld, a repeat partner of “Project Runway” for on-demand fashion. For the price, the client gets 10 product specs, 30 materials sourced, a technical designer and an annual production plan.
Fast Fashion Undertones
Notorious for slim margins, fashion is still figuring out the numbers game on preorder: including pricing and frequency of drops. In a quick browse, items on House of Sunny range from 24 pounds, or $33, to 250 pounds, or $345, spanning items available immediately and through preorder, whereas pandemic newcomer Cider, also on a preorder model, skews on the lower end from $4 to $49.
Trendy TikTok-inspired fashion brand Cider is only a year old with teams in London, Guangzhou, Brisbane, Medellín and New York. Its production is centered in Guangzhou, China where the brand says workers are paid four to five times the minimum wage (a baseline equivalent of $990 monthly versus $330). (Competitor brand Shein also sources in Guangzhou and takes advantage of tax breaks that allow it to sell up to 20 percent lower than fast-fashion rivals, as noted in a recent Morgan Stanley report on the company.) Cider also champions inclusive sizing with hundreds of styles up to 2XL on its site and app.
“By normalizing preorder models we can help the fashion industry stay trendy while not killing the planet,” the brand’s FAQ page reads. “Better yet, our preorder model relies on you! We involve you in deciding what to produce — and how much of it — but this also means we only keep a small number of every style in stock, to ensure we don’t have pieces that go to waste.”
Preorder items are limited, but of the styles advertised for preorder on ShopCider.com, the estimated ship date is not far off regular shipping windows, or an estimated 10 days. One cow print tank style is available online for preorder in select sizes with an estimated ship date of Oct. 30. However, some customers have expressed delays at port.
While Cider did not respond to interview requests by publication, some industry players believe the preorder model parlayed with the fast-fashion identity (including rock-bottom prices and frequent rollouts) defies sustainability logic.
“Just because you preorder thousands of cheaply made goods that will be worn a few times then discarded, doesn’t make that strategy any less wasteful,” said Los Angeles business owner and sustainability advocate Kristen Fanarakis.
Retailers, Designers Still Getting On Board
For retailers, preorder is a way to get off the hook on committal buys. Moda Operandi, Net-a-porter and Farfetch are among the e-tailers operating some portion of their business by preorder.
Since launching its digital preorder business in August, Off-White, Palm Angels, Dolce & Gabbana, Balenciaga, New Balance Collabs, Nicholas Kirkwood, Khaite, Casablanca, Nanushka and Oscar de la Renta have launched preorder on Farfetch.
Lately, the response to preorder from designers and campaign influencers has been positive, according to Jamie Freed, Farfetch’s global vice president of private client. But despite its site clearly stating “Preorder” in bold, Farfetch’s so marketed ‘preorder’ model isn’t tackling overproduction as the clothes are already made in advance, running counter to the preorder concept entirely.
“A preorder sale on Farfetch.com works in the same way as any other sale, with the brand knowing how many sales there have been,” Freed explained. “The difference in this case is that the brand is able to receive an earlier indication of how popular an item is before it is widely available, and can decide to produce more or not, avoiding an issue of overproduction.”
For the 150 items online for preorder (compared to thousands of other products), items are shipped out around four weeks after purchase. “Farfetch’s goal is to move into a model where preorder is genuinely preproduction and applied at scale,” said Freed, who’s aware of the current model’s critics.
As is the case with Farfetch, does a retailer need to have 100 percent of their production on the preorder model for it to be effective?
Giving a read on market appetite, Olivia Barnes, strategist for materials, textiles and knitwear at trend forecaster WGSN, said: “Whilst preorder models are effective at boosting efficiency in a number of areas, waste reduction via accurate resource management and production offer the biggest impact in terms of circularity,” drawing a distinction between artificial intelligence-driven demand prediction from preorder.
In any case, retailers should take considered approaches to preorder and think of broader circularity aims, as WGSN highlighted in a recent trend report.
WGSN’s Barnes outlined perhaps another benefit in keeping preorder to limited editions. “For brands producing limited edition products through preorder systems, there is potential for consumers to benefit, too, through increased demand and desirability within resale markets,” meaning they can flip preorder products that are considered valuable on resale channels.
Farfetch’s Freed said preorder can’t solve sustainability goals alone, but “we believe it is a step in the right direction.”
For More, See:
Is Pre-Sale the Future of Luxury Retail?
Slow Fashion for the Instant Gratification Generation
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