As today is Earth Day, “scarcity” is a buzzy (yet appropriate) word to bridge marketing and sustainability.
Luxury brands are the masterminds of marketing scarcity. However, an increasingly environmentally-conscious consumer base and investigative journalists have begun to poke holes in the dazzling facade.
Only three years ago, Burberry admitted in its annual report it had burned about $37 million of clothing and cosmetics in 2017 (NYT). An act, Burberry defended as means to protect its brand value. It backfired, obviously, with consumers disillusioned by so-called scarcity and environmentalists critical of the waste and air pollution.
Scarcity works when it’s real. Hermes built demand for decades around its Birkin bag that required someone to join a waitlist to buy it. Supreme built an international community of loyal consumers through its planned purpose scarcity– drops.
What Supreme and Hermes do so brilliantly is couple consumer demand with production forecasting. Effective forecasting alone could make brands more sustainable by eliminating the amount of extra inventory a brand has left at the end of quarter, the production costs of the excess inventory, and the environmental impact of producing, packaging, and shipping excess product. Build demand to lower waste.
But let’s give fashion a break for a moment and briefly discuss the new scarcity darlings– cryptocurrency and NFTs. The cryptocurrency market reached a valuation of $2 trillion earlier this month (CNBC). There is only a certain amount of bitcoin to mine which implicitly lends it scarcity, not unlike natural resources. Did you know that Bitcoin mining uses more energy than the entire country of Argentina (BBC)? Yet many argue that most of the energy used to mine bitcoin is renewable energy (Forbes and Vanity Fair have written in depth on facilities in Iceland). The other side of this perceived bitcoin scarcity, is that it may be more financially sustainable than the current banking system.
Fifty years ago, Prince Charles became curious about environmental sustainability. This year, he released his Terra Carta (future Farrow and Ball color?). The goal of this charter is to move out of conversation and into action. What is included in the Terra Carta? A need for science-based and economic systems in order to find and scale solutions.
Ten years ago, the World Business Council for Sustainable Development (made up of 200 global businesses) presented Vision 2050 to organize and prioritize the actions needed to avoid total environmental destruction. Takeaway– change isn’t happening fast enough. WBC CEO Peter Bakker told Fortune, “whether you like it or not, we are all changemakers now, with business having to play a leading role in the transformations toward Vision 2050, working together with governments, regulators, investors and all people.” Bakker also remarked on how in the ten years since Vision 2050’s publication, he’s noticed the loudest voices in the room are no longer CEOs, but how sustainability is now largely discussed in the offices of CFOs. It’s not enough to have a CEO for sustainability, we need stakeholders and investors within every company to build sustainable systems.(Goodkind np).
Complex problems don’t require complex solutions. RELATIV’s 2021 ESG Playbook predicts 2021 will be the year of simplicity, stability, and focus social (social responsibility, not social media).
So how can companies simplify sustainability?
- Speak from a place of trust, not fear. Marketing has muddied the waters of sustainability. Environmental and social sustainability messaging must conjure trust. Trust can be achieved through a brand sharing where it is in its sustainability journey, where its going, and providing updates.
- Open Source. Sharing materials and your journey helps to amplify your work across an industry. Allbirds and Adidas are working together on product innovation that will lead to even more sustainable footwear.
- Specialize. A brand doesn’t need to accomplish everything at once. Pick the aspects of sustainability that matter most to you and see how your production, platform, and community can support it.
- Business of Fashion – Luxury Brands Burn Unsold Goods. What They Should Do Instead
- NYT – Burberry to Stop Burning Unsold Stock
- Sustainable Markets – Terra Carta
- The World Business Council Puts Capitalism on Notice
- Refinitiv – 2021 ESG Playbook
- BBC – Bitcoin Consumes More Energy than Argentina
- Arguments That Bitcoin Harms The Environment Through Wasteful Emissions Miss The Mark
- WIRED – Inside the Icelandic Facility Where Bitcoin Is Mined
- Vanity Fair – The Big Bitcoin Heist
But how do we define a better world? Especially when we consider that “better” is subjective and what is better for one, may not be best for all.