Outside Business Journal

Trend Report, Part 2: Show and Tell

Today’s consumers expect complete transparency from the companies they support. Sometimes, that means being so honest it hurts

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With all due respect to the many great outdoor sock brands out there, let’s be honest: For most consumers, socks are a commodity. So when the folks at Nester Hosiery, a North Carolina sock maker, decided to launch a private label line called Farm to Feet in 2013, they knew they had to do something that would help them stand out. They landed on two key things: First, they would build socks that relied completely on a U.S. supply chain. Second, they would embrace total transparency.

A prime example: When the leaders looked around the factory floor, they were appalled by the piles of wasted raw mate- rials they saw, and asked themselves how they could divert waste from the landfill. The result was the Remix collection, launched in 2019, which turns these excess fibers into new socks. “This allows us to extend the life of existing materials while we figure out how to create less waste in the future,” said Katie Kumerow, director of sustainability for Nester Hosiery.

Supply chain transparency is a fairly new concept. Fifteen years ago, nobody cared about where a product came from as long as it worked. But over the last decade—and even more so in the last five years—transparency has emerged as a key corporate value in the outdoor industry and beyond.

Not only are we seeing governments, stakeholders, and NGOs demanding information about where goods come from, consumers are demanding it.

“With the way people can track and trace everything these days, it’s very important to be open and honest,” said Ralph Oliva, professor of marketing at Smeal College of Business at Penn State University. Consumers are spending unprecedented time online researching the companies they support. That’s why, he says, more and more outdoor companies are lifting the veil when it comes to how they operate.

Farm to Feet drills into all aspects of its operation on its website, which features a prominent “Our Supply Chain” tab with a wealth of information about where its materials come from, how and where its socks are made, and the people involved in every step. The company has invested heavily in communicating its story via packaging, custom videos, and more.

Supply Chains Can Be Messy

Even if businesses find unsavory things when digging deep into their supply chains, these days it’s scarier not to be transparent about what you find. “Brands may discover things they aren’t proud of, but the best course is to fess up and admit it’s something they’re working on,” said Oliva. “The right customers will stay with you.”

Transparency does eventually pay off, says Alex Scott, assistant professor of supply chain management at Michigan State University. “When companies audit suppliers, develop trusting relationships with them, and write contracts with penalties for unethical behavior, it will eventually lead to increased sales. Our research shows that people will pay 2 to 10 percent more for products from companies that provide greater supply chain transparency.”

He emphasizes that transparency isn’t so much about perfection as it is about progress.

Leaders in Transparency

Patagonia was an early adopter of transparency. According to the 2020 Fashion Transparency Index, it ranked seventh among 250 apparel companies analyzed (see right).

In 2012, Patagonia launched a blog called Footprint Chronicles with a simple mission: to “be completely honest about where our products come from and the resources required to create them.”

Vincent Stanley, Patagonia’s director of philosophy, has been involved with the blog from the beginning. Although he says it’s impossible to say how Patagonia’s transparency efforts have affected sales growth, it’s clear that the company’s honesty has created a lot of trust that they might not have had with products alone. “We make our values and how we act on them crystal clear,” said Stanley. “And we don’t shy away from talking about shortcomings.”

For example, in 2014, Patagonia published an article called “Patagonia’s Plastic Packaging: A Study on the Challenges of Garment Delivery.” In it, the company admitted that it was contributing to the world’s plastic problem via shipping the garments it sells in polybags. The article details a series of failed experiments aimed at finding more sustainable solutions, like roll-packing with twine and paper mailers. As of fall 2019, Patagonia switched to 100 percent recycled polybags that can be sent back to the company for recycling (a spokesperson reports that 25 percent of bags shipped get returned).

Keen also has a strong transparency track record and, like Farm to Feet, a wealth of information on its website detail- ing its efforts. An example: In 2013, Keen decided to examine its waterproofing treatments, which contained perfluorinated chemicals (PFCs) that have been linked to a host of health problems. The company got to work. After 1,000 hours of testing, they hit upon non-toxic, PFC-free alternatives that met their quality standards. To date, this change means Keen has avoided using more than 150 tons of perfluorinated chemicals. “It took cooperation and trust across our entire supply chain,” said Chris Enlow, senior director of philanthropy, advocacy, and sustainability. “We would never had gotten here without transparency.”

And it’s not just consumers that are looking to support this kind of transparency, says Enlow. “Retailers are also demanding it in order to curate responsible and sustainable collections in their shops.”

Lindsey Barr manages Blue Ridge Hiking Company in Asheville, North Carolina, which specializes in small batch ultralight gear. She says sourcing products with transparent supply chains gives them a leg up with customers. “It’s a way to differentiate what we sell from what everyone else sells,” she said.

Beyond the Supply Chain

Other types of corporate transparency are equally important. Transparency in diversity, equity, and inclusion efforts is also on the rise among outdoor companies and recent events have created a sense of urgency. “It’s imperative that to begin the work of DEI, a company must first be transparent—at least internally—about the racial diversity of their employees and their failures to recruit or maintain a diverse work force,” said Teresa Baker, founder of the Outdoor CEO Diversity Pledge.

Merrell, which signed the Pledge in early 2019, has fully embraced transparency in its DEI efforts and is among a handful outdoor brands doing an outstanding job, says Baker.

Merrell knows that looking into the mirror is key to driving meaningful change. “Since signing the Pledge, we’ve done brand-wide, formal, biannual training sessions on JEDI topics,” said Chris Hufnagel, global brand president. “We have a culture audit next month that will inform our 2021 team learning sessions, and we’ll also be implementing a scorecard to keep us moving forward. [Merrell will share the results of both with customers.] As we continue the journey to diversify our team, our Merrell senior leadership team now more closely reflects the diversity of the population.”

Transparency is the Future

Nester Hosiery’s Kumerow says brands need to be fearless in their transparency efforts. “By working to improve—whether it be supply chain or DEI efforts—and shooting straight, we’re opening the door for deeper connections and loyalty among our customers.”

And hopefully that will be the saving grace as brick-and-mortar retail comes out of coronavirus hibernation. Kumerow says that when that happens consumers will want—more than ever—for the products they purchase to align with their values. She thinks that will give brands like Farm to Feet, which shares openly, an edge over the competition.

In the end, the labels we wear are more than just labels. They stand for something, and most people want to know what they stand for.