Listen to Jason Mitchell discuss with Janice Wang, Alvanon CEO, about how the fashion industry can become truly sustainable.
Listen to Jason Mitchell discuss with Janice Wang, Alvanon CEO, about how the fashion industry can become truly sustainable.
Can the fashion industry become truly sustainable? Listen to Jason Mitchell discuss with Janice Wang, Alvanon CEO, what sustainability means in a fashion context, how to adapt to shifting demographics and changing body types, and why efficiencies like 3D and digital technologies are already revolutionising the market.
Recording date: 05 October 2022
Janice Wang is CEO of Alvanon and Chairwoman of the Board at MOTIF, the online professional development platform for the apparel industry. She is a Member of the Board of The Hong Kong Research Institute of Textiles and Apparel Limited, a Member of the Advisory Board for The Mills Fabrica, and Director of the Board, Hong Kong Chapter, for the International Women’s Forum.
Note: This transcription was generated using a combination of speech recognition software and human transcribers and may contain errors. As a part of this process, this transcript has also been edited for clarity.
Welcome to the podcast, Janice Wang, It's great to have you, and thank you for taking the time today.
Thank you so much for having me on, Jason. It's wonderful to be here and I really look forward to the conversation.
So I want to start out, I want to start this episode on a personal note. I've heard, back at that dinner, a little bit about your origin story, your background as a third-generation apparel manufacturer, and I want to explore it a little bit more. Talk about what fashion as a family business means, from your grandmother first setting up a children's wear manufacturer to your father first establishing Alvanon. What does that perspective and generational experience give you?
So when the rag trade is in your family business, right, you tend to absorb a lot of this through osmosis. My family's company was one of the largest children's wear manufacturers in the world. Our partners, at one point, were the largest licensee for Disney and for Guess, and we produced for all of the big US retailers. Already in the 80s and the 90s we had decentralized factories in different countries. And by different countries, I mean a lot of large manufacturers. You went to whichever country had the best advantage of trade agreements with the US as importers, so we had factories in Philippines, in Malaysia, in Sri Lanka, in South America. And what that meant for me is that I got this privilege of seeing all of these multicultural factories, right.
And also, the other thing is that later on I also spent a lot of time in New York with our partners and the wholesale business that they ran, so I also got to work with one of the largest trading houses, Leann Ford. And what this meant for me is that I met every single level of people. I mean, from sewing workers and pattern makers, dye chemists, designers, researchers, merchandisers traders. And what they all taught me to see, in their own way, was this holistic end-to-end view of the demand and the supply chain. And I think most people don't get that kind of luxury of an education, right? At the same time, if you asked any third-generation manufacturer, if you're in this, you're kind of in this for life.
So Janice, what is Alvanon? What is it today?
Alvanon is a fashion tech company. We're focused on the body and its application inside the apparel industry. So we use all the data and our expertise from the industry to determine data-driven sizing strategies for brands and retailers worldwide. What that means is, we help brands figure out what their sizes small, medium, large, extra large should be. Our most used tool is a mannequin. And the mannequin is both physical and digital. The digital twin has the exact measurements of the physical and is used within any kind of 3D software platform.
Our virtual mannequins have now evolved to be the most authentic and advanced in our industry. And given the right kinds of 3D rendering can look and move like humans, with human features and characteristics. Basically, think avatar. So they're so authentic now that in addition to designing clothes that actually fit real people on them, they can also be used across multiple online platforms to engage with customers before a single garment has been cut. And so, that's what you can imagine will have massive implications for the sustainability of our industry.
What's the problem in fashion that Alvanon is working to solve? And I'm also wondering, what in your mind is ultimately at stake when you think about all the inefficiencies of the fashion industry, the returns, the rejects, the waste, et cetera?
So, for way too long we as an industry have been over producing, so companies have been chasing top line revenue and making too much of the wrong stuff. This is not good for the planet or for business. Just think about the blow to the inventories actually that remain on the sale rack. So how often have you gone into a store and looked at all of those markdown items and think, "Why is there so much stuff here?" I mean, "Why does this brand make a hot pink hoodie with a frog print on it?" Or, "Why is it that you make this dress that looks good on a six foot skinny model who's basically got no curves, but at the same time, if you make it in a size 16, on somebody who has a lot of curves, all the proportions are in all of the wrong places?" And what happens is that you don't get to sell it, and so it gets... And at the same time, you also get panned on TikTok or YouTube or wherever it is, and it's not good for your brand as a business.
So just to put some of these kinds of real world examples into context, since the last global financial crisis in 2008, we've had apparel production increase by 250%. And apart from the damage that it's doing to the planet's resources, it makes absolutely no business sense, because 60% of the garments that are being sold are at discount. And when consumers make purchases, especially when they make it online, too many actually are returning garments. So the return rate is somewhere between 30 to 60%, depending on what style it is. And what this means is that we can't keep doing this. We have to keep producing garments that are actually fit for purpose and actually fit today's consumers size and shapes so that we can sell less but still be more efficient and sustainable inside the selling and the production process.
Can we talk a little bit about what fit for purpose in a sustainability context means? I mean to say that the fashion industry is facing growing criticism around its sustainability claims, which are, as we know, largely self-regulated. There was a recent report from the Norwegian Consumer Authority calling out the Sustainable Apparel Coalition's, Higg Index. The Higg Index represents, I'm sure as you know, a set of five tools that are supposed to help retailers consistently measure sustainability around materials selection. But it seems to me, it's more complicated than just that. Sustainable fashion isn't just about raw materials, it also represents apparel manufacturing, which we've just talked about, how brands create and purchase from manufacturers and ultimately about what I think consumers want. Where do you see change needing to happen deeper in that production process, not just the material selection part? And if in your opinion, the Higg Index is flawed, how would you improve it?
So I've always thought that the Higg Index is too complicated. And the reason why I think that is because in material selection, the largest glaring outlier to this is the issue of polyester, right? Because inside the Higg Index, at one point, there was a point made that polyester is more sustainable than cotton. Well, I mean, I don't think any of us thought in the 1990s that polyester would be more sustainable, because I mean it is a manmade fiber. And yes, it stabilizes some of the things that you can make with it. When you have a blended garment, you're probably going to have better functionality. But if we look at actually most of the clothing that's made today, over half of it is made from polyester blends. Just think of all the leggings that you've made. But I'm very happy to have these leggings that have polyester in them, okay. There's lots of functionalities that make it a very useful garment and that actually is fit for purpose, right? I love the fact that we have dry wicking and garments that can move and hug parts of your body, because it's really good for athletics, for instance. These things are all fit for purpose. The issue is, whether we need as much as we need of these kinds of products.
Now, raw materials aside, there is a whole buying and making process that is currently highly inefficient. And the reason why it's highly inefficient is because there is no transparency between those two functions. A lot of the buyers of certain styles, they've actually not seen factories before, because we actually left factory production inside... there's no manufacturing production inside the US or not much in the Western countries, you can still find some in Western Europe. But it's very seldom that some of these buyers, who are looking at a spreadsheet, have actually physically been to some of these places to understand what that actually means.
And so, in a lot of the time that we've been working in the industry and people ask us for our kind of opinion on certain things, the fact of the matter is, if you don't train somebody to cost a product, they don't actually know what the inputs are. So you can't expect them to give you a suitable output that then actually, or a price that then actually gets passed to apparel manufacturing for the apparel manufacturer to say to you, "Hey listen, if you really want your, for instance, sweater with gold Lurex spun into it, I'm sorry, this item's going to cost you at least 12 bucks, it's not going to cost you $2.00. And if you want to sell it at $8.99, it's definitely not going to happen. So what substitutions are we going to have to put into this item to make this work?" Right?
Can we switch lanes a little bit? Can you talk about the evolution of the mannequin or the fit form? For me it's interesting that your father, the founder of Alvanon, understood more than 20 years ago that the fit form, the industry name for mannequins used for sizing and designing bodies that were originally produced in paper mache, that he understood back then that there were inherent limitations in this. What's the importance of the mannequin or fit form for fashion designers and manufacturers, and what are those limitations?
So how we actually got to creating a mannequin was a little bit of a funny story. What actually happened was, his partners had a fit problem. The designers in New York were trying to make this garment for an 18-month-old baby and they kept rejecting the sample that the sampling factory had actually sent over. By the way, we are using air freight, so it actually really cost a lot. And they kept rejecting it, and we didn't understand why they were rejecting it. And then when we figured out, well, actually why they were rejecting it, it was because both of us had bought... both the sampling factory in China and the designer in New York had actually bought the same fit form. It was made out of paper mache, it was the same item but had different dimensions. And the reason why it had different dimensions was because those two items were cured at a different time, which basically meant that because paper mache dries at a different rate, given whatever environmental humidity was out there, there was about an inch of difference between the two mannequins. And an inch of difference on an 18-month-old tool that is supposed to be standard is huge, right?
It was basically the size of a diaper. So then my father being the doctor and an engineer that he kind of was decided, "Wait, this is a really good place to start. If I'm having this problem for children's wear, is everybody else also having this problem?" And it kind of makes sense, right, common sense, is that you'd want to have a common tool between both the maker and the designer, and they're the same things, and you're speaking the same language. And so when we started digging into this little problem, we started to realize that wait, this was happening everywhere. So we said, "Oh, there must be a better way of doing this. Okay, let's try and do this."
And then, so he decided, "Hey wait, let's fake a scanner," because my father really, he really was the ultimate tinkerer. So then at that point he decided he was going to design a scanner. He was already designing one actually at that point. And then he was thinking, "Well how do you scan a human body?" And this is before we had kind of the red light scanners, so he was using cameras. And then he figured out, "Oh, we can work on this scanner, we can scan the human body." And then, "But wait a sec, the human body is both not symmetrical." if you look at yourself, for instance, one shoulder is probably at a different slant than the other. Just by virtue of the way that if you are right-handed, you write with your right side. One side's stronger than the other. But clothing is symmetrical, so actually the tool that you use must be symmetrical.
And so, what actually happened was, let's make this properly. After we scanned it, we've got to make it symmetrical. We've got to make it so that at any point in time it has to be exactly the same as the one that was made before. And so we embarked on this rigorous engineering project, which even until today, we continue to improve upon, on how we would make a mannequin that would become a standard tool that everybody could trust. And the reason why this is kind of important is this. If you are a designer in the US for instance, and you are used to seeing different ethnicities or even blended ethnicities that have different kind of spinal structures and different curves in different places, you actually visually know what you're looking at. But let's say somebody who is a garment worker in Sri Lanka who is used to seeing people who are much more of a different build, they're slighter, the people that you see on the street don't look like the garments that somebody else has asked you to make. There is a huge disconnect visually or in that visual understanding of it. And so, part of everything that what we're doing here is try to standardize this tool and the visual language that we're using in order to make garments.
You've talked in the past about how designers would send back samples to your father because they didn't fit right. What does it mean to fit right? I think I know from our conversation a little bit more about that, but how does that relate to sustainable consumption itself? Is there a parallel to something called the Jevons' Paradox in the energy sort of model? Which that the Jevons' Paradox implies that incremental efficiencies in energy don't necessarily equate to energy savings. Generally what you find is efficiencies are offset by higher consumption. And so to move that to the sustainable fashion or to the fashion industry, I guess what I'm wondering is, does fitting right in some ways translate into greater consumption, particularly in the fast fashion industry?
Okay. So I think for this part, the Jevons' Paradox is kind of interesting because... And I actually looked it all up when we spoke about this at dinner, because I thought that's an amazing reference because it's true. But the Jevons' Paradox, actually funnily enough, doesn't so much relate to actually how we look at fit in samples and stuff. It actually relates much more to the manufacturer of clothing. Because we became so good, as Western brands actually became so good at buying their production from kind of more cheap needle countries, right, countries which had low labor costs, and manufacturers who were able to kind of make the whole process so much more efficient, it drove the price down significantly, which allowed consumers to purchase much, much more. So I do think, yes, the Jevons' Paradox completely correlates to kind of the fashion industry over consumption problem.
However, how does getting the fit right relate to sustainable consumption is, because of the Jevons' Paradox, it allowed the buyers to buy whatever they pleased from the apparel production market. And so they didn't actually think about whether it was a wasted resource or not. Going forward, if we are to have sustainable consumption, it basically means that our whole system that we've actually created has to change. It means that if you are buying inventory at a certain ratio, right, let's say you are buying... you actually have to get those size ratios correct for the market in which you are selling it to. And this part actually relates back to the previous data question, because now we actually have purchase data from consumers. We also know their past history. We know actually the things that they like going forward.
And actually harnessing all of those data-points to get some sort of transparency in the demand chain will allow us to actually make better decisions on which sizes actually we should buy going forward. For instance, in the US, you probably don't need to be buying so many double zeros or zero or size twos, you might want to be buying much more of kind of size 12, 14, 16. In let's say Germany for instance, previously, which had a very, very healthy, skinny market where they were mostly buying sizes 38, you may actually be buying larger sizes these days, because purely by nutritional values where you actually have people who are just bigger and stronger in size. Part of all of these things, I think, lead back to the fact that we actually have to take deep looks into the data that we currently have and be able to use some of the expertise that is out there to be able to figure out actually what these size buckets should mean. And previously there was no way to visualize it, but today there is.
And this is actually a place where I'd like to segue into a lot more of the digital methods of working. Many of the processes for the fashion industry were created using a very traditional methodology, which meant that you actually drew out the sketch of what you wanted. You might have a CAD drawing of it, you make this physical sample on a physical fit form, use a mathematical formula to make it bigger or smaller and you never tested the largest size or the smaller size to see whether it would look like the item that you identified it to be. Come 20 years and the same time that we've been working on these kind of things, one of the things we were trying to get the whole industry to do was to digitize all these processes. And they weren't able to because they couldn't actually visualize what those bodies really would look like. And now you actually can. Previously, you had to be a pretty big company, a pretty big brand to buy every single size of mannequin from Alvanon. They're expensive. I mean, not withholding the fact that each one of them is over 2000 bucks each, right, but the fact if you want to make a bigger one, I have to charge then more. And the shipping alone on it was expensive. So you had to be pretty robust in your decision-making to have a whole army of mannequins inside your studio. Today that goes away, because we actually have digital avatars that replace these physical ones. You still have to test them on a physical form, don't get me wrong.
What percent of your client base is digital versus non-digital right now?
As much as the executives would like to be believe that they're much more advanced than they are, I would say that under 30% of them are in digital. We collaborated with Calypso and Coresight Research to talk about actually the readiness, the state of readiness in the digital technology realm. Every year we put on a kind of three day event called, 3D Tech Fest. And the interesting thing actually that came out of that is that Calypso actually produced a report and in it they basically said that since 2020, companies have moved from developing their immature digital strategies to significantly scaling up those strategies across the enterprises in 3D design, product design, digital product development and to virtual consumer try-on inside a retail sales environment. Calypso is anticipating that by 2024, those brands will have successfully scaled digital across their enterprises.
On that point, Alvanon's got a pretty impressive list of clients that includes a giant cross section of the fashion industry. Brands like Chanel, Lululemon, Patagonia, Alexander Wang, on and on and on. What examples, in terms of products from your clients, not necessarily those, do you see as having impacted all these sustainability kind of elements that we're talking about when you think about apparel returns, product development processes or more?
So Alvanon's clients, they all buy into one tenant, okay? If they're just buying even one mannequin or two mannequins, up to a full digital suite of tools, they all know that they need to have a standard and that the people that they're working with, the factories have to follow that standard that they've abided by, so they're both working in a common language. And that standard is representative of their consumer base. But all of these fashion brands, to a certain extent, they're siloed in their departments. And so, what I find is the brands that actually work cross-functionally and are able to harness data from all of their teams, not only their product development teams and merchandising teams, and their consumer insight teams, the returns team, those are the ones you can really make an impact in sustainability, because they actually, at the end of day, sustainability is about efficiency, right? If you can figure out where the waste is, then you can figure out how to solve that problem. You've got to know where it is first and you've got to talk to each other to get there. So I think that all these big brands, they try, it still doesn't quite negate the fact that they're overproducing though. And somehow they've got to nip that in the bud.
So we talked previously, I think when we were having dinner, about this idea of degrowth, right? A lot of the times in the past, because it's been so easy to buy, they've just bought a whole bunch of stuff and threw it against a wall and say, "Okay, let's put it out there and see what's going to sell." Those days are over, they can't do that anymore. You can't just hope for top-line revenue growth. You've actually now got to look at the efficiencies. And I think this whole past two years of COVID actually brought that to the forefront, because the supply chains all went into disarray. So I think there is something that can be done there with regards to kind of brands that I think are doing interesting things.
And we were talking during the event that we had, that 3D Tech Fest, about why Patagonia was so amazing. Actually, the next day was actually when Patagonia announced that they were going to give back $100 million to the climate every year. But the reason why Patagonia is actually interesting to us as a company, is because they actually are transparent through all their merchandising and their product design. All of their silos actually work off one system and they have a level of insight into kind of what's selling, what not selling. All of that, that actually kind of cuts down on their production and which sizes that they actually are producing. The kind of transparency that's very, across the board, interesting.
The other thing that actually we saw was Walmart. Walmart just debuted their consumer app for people to visualize themselves inside a garment. I think this is hugely significant. I mean they just launched it, so we really have to see which impact it really does make. But I think when you are able, as a person, to look at a product online, put yourself into that garment, visualize yourself in the size that you are wearing, whether it's going to suit you or not, and then you can actually decide whether you want to buy that item. And it will save on purchasing multiple sizes. It will save on some of the kind of inherent bias that we have when we look online and see whether something will or will not suit us. Because honestly, I don't know how somebody who is a size 16 can look at the model that is posted online and say, "Hey, the model's a size four and I'm a size 16," and make that visual reference to whether I'll look good in that item or not. It just doesn't work. But if you can see yourself as a size 16 inside that garment that's made for a size 16 body, and what it looks like on you, and whether it flatters you or whether you like it, you like the way that it would drape on you, that's huge.
It kind highlights the role of a consumer in a mission to be much more sustainable. They want to buy less, they want to buy right the first time. The 3D visualization on garments on their own body is a huge thing. And kind of as an industry, we have a responsibility to give them the tools to do it. However, the tools previously have failed and there's a reason why they failed. It's because all of the foundational elements of the size set, the avatars, the digital project creation, all of these parts were not aligned to produce something that can be shown to somebody. So there's a lot of many inefficiencies along this whole process that we can actually pretty much eliminate if we were to do them digitally.
Well, I've got one last question. Given how conservative the fashion industry is, what are the reactions from fashion clients to the figital or authentic digital garments that Alvanon on is developing? How does this design process evolve from a fit standard perspective?
So the pandemic really opened an opportunity for these digital tools to shine, because at the start, many companies who were on their digital journey before the pandemic really accelerated them when the pandemic hit. They had no choice, because people were working from home, you had to have a tool to make it. When the pandemic first happened, some of the clients called, they actually called me, which is very rare, and they actually said, "Listen, how can we change the way that we actually... where send all of these mannequins? You can't send them to the office because we're closed, so can you send them to my house?" And I thought about it for a while, and my shipping team said, "Yeah, okay, let's just do that." So we sent the physical mannequin to their house, right. And after a while they started realizing, "Oh wait, listen, if we have a digital tool, everybody can have it at their house."
So we're now pushing on open doors. The companies are absolutely wanting to learn and invest, and build their own digital ecosystems. What we're finding specifically, is that the tech teams want digital versions of technical fit forms and the creators, okay, they want kind of their muses that look like they're target audiences. So my brothers and I, and our team here, they said, "Okay, well we were working on some of these problems and we've kind of got to accelerate them." And so what we started to do is we built up a new platform for them to be able to use this, and it's called Alva-Bot Body Platform, for lack of a better word, okay, where we actually take the exact representation of our physical forms and we skin them. So it's like putting a new face onto the body that actually has all of the proportions that's needed for garment making, but still give it the look which other people wanted, the creators wanted to look for.
And see, I as a non-technical kind of, but engineering person who likes this kind of stuff, I actually always just thought, "Well, you can imagine this. You don't need a kind of visual representation of your model, just imagine it." But actually, having been able to skin the mannequin to somebody who they wanted to see, it's really helped everybody actually align. And so now what we have is we have the standard, which basically has no human-like features at all, to actually having this avatar look like a person. And this thing drives kind of all of the... It's actually crucial to all of the teams working together. And these authentic digital assets, they allow these teams to actually be able to visually represent what they need to represent.
So it kind of all works in a very nice little line. And at the end of all of this, what we are hoping to do is to get all of these assets to be able to get to the consumer. So the consumer won't even know what they're buying is not made yet. That's the ultimate goal, of course, for some of these fashion companies, but they have to have all these tools to get there.
So it's been fascinating to discuss how the fashion industry and Alvanon are approaching sustainability, what's at stake when we think about shifting demographics and changing body types, and why efficiencies like 3D and digital technologies are a powerful means that are already revolutionizing the market. So I'd really like to thank you for your time and insights.
I'm Jason Mitchell, head of responsible investment research at Man Group, here today with Janice Wang, CEO of Alvanon. Many thanks for joining us on A Sustainable Future, and I hope you'll join us on our next podcast episode. Janice, thank you so much. This has been a fascinating, really interesting conversation.
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