7 Tips for a Sustainable Fashion Business Model

Launching a sustainable fashion brand in an industry that’s dominated by fast fashion and designer labels can be challenging. However, once you find the right sustainable fashion business model and work out how to market your products effectively, you can create a business that not only survives but thrives.

Identifying your target market and reaching out to these people is the first step in building a profitable business. Then, consider building a social media presence and diversify your payment options to make it easier for potential customers to make a purchase.

1. Identify and Market to Your Ideal Target Audience

Sustainable fashion isn’t a concept that is inherently interesting to all consumers. An effective marketing strategy will therefore pinpoint who your target audience is and how best to appeal to them. A market research article from Bain identified five specific shopper profiles with regard to sustainable shopping:

1. Champions of sustainability
2. Idealists
3. Responsible citizens
4. Opportunists
5. Indifferent shoppers

A targeted marketing campaign will focus heavily on the top groups. These people are likely to:

• Be more engaged with your brand
• Have a higher income level
• Be willing to spend more on environmentally-friendly items
• Be Millennials or Gen Z consumers

By making a clear profile of your clients, you can focus your marketing campaigns on these demographics when you start an online clothing boutique.

2. Offer Quick, Affordable or Free Delivery

Affordable, fast delivery is key for small online businesses that wish to gain and retain customers. Studies on the impact of shipping costs and speed on customer behaviour underline the importance of quick and affordable delivery. For example:

• Li and Wang examined reviews on Amazon and observed that retailers that offer free shipping have higher product review ratings.
• In a study by Chad (2021) cited in Wang et al. (2021), 65% of consumers said they shopped in-store to avoid shipping fees.
• Fisher et al. noted an average revenue increase of 4% in postal codes that offered faster delivery than those for which delivery was slower.

As an up-and-coming brand, you can’t afford to lose potential customers due to high shipping costs or long delivery times. Improving these parameters can improve your conversion rates and potentially your reviews and ratings as well.

How Small Fashion Brands Can Improve Delivery

Sustainable brands must take delivery and shipping costs into account in their business models. For example, you could:

• Establish a delivery zone within a certain distance of your workshop or warehouse. Customers who live within this zone can receive packages for free or at a low cost.
• Use sustainable delivery options like walking, cycling or sustainably-charged electric vehicles for local deliveries to reduce costs and appeal to eco-minded customers.
• Offer BOPIS (buy online, pick up in-store), click-and-collect at collaborating stores and/or curbside pickup to reduce delivery costs while offering customers a convenient way to pick up their goods.

3. Offer a Range of Modern and Traditional Payment Options

Small fashion companies must keep up with trends not only in the fashion industry but also in the payments industry. Sustainable clothing brands should offer customers traditional payment methods such as credit cards and bank transfers as well as innovative payment methods like QR payments.

Businesses with merchant serviceaccounts can accept a wide range of payment methods in different currencies. This means that eco-minded customers from around the world can purchase your products online using their preferred payment method.

Payment Methods to Offer

Provide as many payment options as possible through a secure payment gateway to maximise sales and reduce cart abandonment. According to a study carried out by Payvision in 2021, Europeans favoured the following payment methods for online shopping:

Payment Method	Favoured by (%)
Credit Card	42
PayPal	32
Local Payment Method	11
Pay on Delivery	11
Apple/Google/Samsung Pay	3

Source: Preferred payment methods in Europe 2021, Ecommerce News.eu, August 20, 2021

Bank transfers are also a good option for customers in the EU as banks charge the same rate for payments within the Single Euro Payments Area (SEPA) as they do for national transfers. This makes it easier to open up your brand to international customers.

4. Harness the Power of Social Media and Social Shopping

The power of social media for your business should not be underestimated. Retail TouchPoints reports that 76% of social media users have purchased something they first saw on social media.

Simply acknowledging social media’s influence though isn’t enough. Brands must know how to optimise their social media accounts to reach as many new customers as possible and get the best return on investment for their marketing expenditure.

According to Statista, online shoppers in 2022 were most likely to buy through Facebook (33%) followed by Instagram (24%). Keep your eye on social shopping trends and create content that is likely to appeal to members of your target audience on the social media platforms you choose.

How Does Social Shopping Affect My Business?

Social shopping is a fairly new concept in which products are sold on social media sites. This is different to social media marketing practices that drive traffic to your e-commerce site. With social shopping, the customer checks out within the platform they’re using.

Your sustainable brand can use social shopping to its advantage by partnering with a payment processor that can handle these payments securely and collate transaction data in a central place.

To set up payments on social commerce, you will usually need to upload or add a product catalogue to your social media account(s). Customers can then either purchase from your social media storefront directly or from your e-commerce site via social media using purchase links embedded into posts.

Using social media marketing can also be appealing for sustainable brands, as you can customise your outreach efforts to focus on local customers. Selling products within your area results in a much smaller carbon footprint compared to shipping internationally.

5. Create a Loyalty Program

A customer loyalty program rewards repeat purchases with discounts and other incentives. Finding new customers can be a time-consuming and costly process for small brands, so retaining customers with whom you have already done business makes financial sense.

Many businesses use a loyalty program management service to integrate loyalty point accrual with payment processing. Choosing a payment provider that builds a customer database as part of its merchant services package will allow you to collect customer data for repeat orders, loyalty points and email marketing campaigns.

Important note: As with all customer data, you must be transparent about how you collect and use data in your loyalty program. Provide a clear and transparent data policy and make it easy for customers to indicate that they don’t want their data to be sold to a third party.

6. Highlight the Sustainable Practices You Use

Blogs and social media pages are great places to connect with sustainable fashion consumers and raise awareness of the issues your brand is trying to address. For example, you might communicate your:

• Sustainability policy. What is your approach to sustainability and how do you implement this in your operations?
• Business ownership model. Are your workers also co-owners in the business? Do you invest your profits in sustainability trusts or community-based initiatives?
• Slow-fashion business model. Do you make garments on-demand? Do you produce small batches and recycle or donate any excess material? Do you focus on timeless designs that never go out of fashion? If so, let your customers know!
• Sustainable energy production. Tell your customers if you power your facility with onsite solar, wind, micro-hydroelectric or another kind of renewable energy.
• Fabric sourcing policy. If you make your clothing out of biodegradable, organic and/or recycled materials, educate your customers about the positive impact of these practices.
• Ethical treatment of workers. Let customers know if you pay your workers well and take measures to ensure their physical safety on the job.
• Positive community impact. You may be involved in projects that help with sustainable development in the community where you source your primary materials or where your workers are based. You might also be involved in community projects where you live. If so, let your customers know!
• Supply chain traceability. Create a flowchart to show your customers where you source your materials. If your suppliers have any organic, sustainability or fair trade certifications, include these in the chart.
• Charitable giving. Tell your customers about any grassroots environmental or social charities your brand supports, especially if you donate a percentage of each sale to these organisations.
• Product quality and durability. If you intentionally make durable apparel, let your customers know how long they can expect each garment to last and how they can extend its lifespan.
• Clothing recycling program. Tell your customers where to recycle their used clothing and/or how they can return their used clothes to your business. If you offer a garment recycling service, highlight the benefits of the “circular economy” and explain how returning used clothing benefits the earth.
• Re-commerce business model. If you offer used clothing or clothing rentals, educate your customers on how this helps to reduce the strain on landfills and reduces the need to mine for new materials.
• Impact-per-wear data. Putting a figure on your brand’s impact helps to make it more tangible for customers. Calculate water and energy use per wear and create infographics to show how your garments compare with fast-fashion equivalents.
• Accurate labelling. Customers value transparency. Teach your customers how to read clothing labels and highlight any details you include, such as country of origin, wash instructions and composting or recycling information.

Educating your customers about the issues you address is a great way to raise awareness, communicate your unique value propositions and help you reach customers who care about the same issues as you.

7. Be Honest and Avoid Greenwashing

Greenwashing is a dishonest practice used by brands to deceive customers into thinking that a product (such as a garment) is more environmentally friendly than it is. It’s important to be honest and highlight the things you are doing well rather than give a false impression with green-coloured logos and unsubstantiated claims of a garment being “natural” or “sustainable.”

All production processes take their toll on the environment in some way, shape or form, and acknowledging this is a way to foster trust between you and your clients. If you’re working toward becoming more sustainable in a particular area, acknowledge this fact and keep customers updated on your progress.

Sustainability Can Be Profitable, Too

Sustainable brands have the potential to be successful in a world that’s increasingly concerned with the environmental impact of the products we buy. However, having a platform on which to sell sustainable garments isn’t enough on its own; a viable business plan must include a solid marketing strategy that’s tailored to your target audience.

Offering multiple payment options is also something that shouldn’t be overlooked. Serious businesses need a merchant account to facilitate different payment methods and capture more potential sales. The merchant services associated with a merchant account can also help you collate data in a centralised place for improved communication and decision-making.