Pre-owned clothing sales are big business on online platforms, while thrift store shopping is on the rise with the movement expected to include a focus on eco-friendly materials and durable garments.
Global clothing brands are already coming under more pressure to prove their environmental and social impact as 50% of new clothing goes into landfills in the first year they are bought.
Large enterprises are warning suppliers they must comply with sustainability codes and be more transparent to do business with them.
Yet the rise of "ultra-fast" fashion is continuing with shopping platforms such as Shein filling 880,000 orders a day and Temu growing at 280%.
Fossil-fuel fibres are expected to move to 75% of all fibres by 2030.
NZM’s Australian-based independent director Rosanna Iacono presented the trends at a Wool Reimagined gathering at the company’s Christchurch headquarters.
The co-founder of Sydney strategy and sustainability consultancy, The Growth Activists, is a director on the board of Seamless — charged with transforming how people choose, enjoy and recycle clothing more responsibly in Australia.
She said the incredibly high consumption of clothing was sobering at about 100 billion units produced a year globally when 25% of that was needed to stay within safe limits of human pressure on the planet.
"A lot of that over-consumption is really at the lower end of the market with cheap, mostly polyester petro-chemical based clothing that goes to landfill in the same year it is purchased."
Mrs Iacono said it was a dire situation, but fashion providers such as NZM and its brands were a step ahead in working sustainably and ethically in a successfully commercial way in the hyper-competitive market.
She said merino had done a good job so far in connecting to top end consumers and telling the story of fine wool being created on regenerative farms.
There was more storytelling to be done for opportunities in the strong wool and lower end of the fine wool market and increasing merino wear among the next generation.
"Maybe there needs to be some targeted campaigning on Gen Z — that could be really interesting."
A major shift to sustainable finance was being seen globally with more ethical investment and institutional investors. Big investors such as Canadian pension funds were wanting businesses to step up their sustainability credentials in order to future-proof their investments. This was also happening in the venture capital and private equity worlds, she said.
"What we are seeing in terms of change is not really being driven by the wonderful NGOs (non-government organisations) that are out there agitating or by consumers — it’s being driven by the investor community. They have by far the biggest influence."
Ethical investment funds on behalf of Australian investors leapt to $1.6 trillion in 2024, while venture capital firms were investing heavily in ethical businesses.
Major lenders are also shaping loan terms on sustainability goals. Prada signed up to a $US55 million loan with French bank Credit Agricole and Woolworths on a $A500m loan with interest rates linked to renewable energy, reducing food waste and increasing supplier diversity.
Meanwhile, regulators led by countries within the EU and some states in the US are putting in stricter environmental requirements.
By 2027, an EU digital product passport will come in to track a garment’s journey from the raw material to the end of its life.
Each time a product is rented or resold the producer will get brand royalties.
High-end resale platform Vestiaire Collective has partnered with luxury brand Chloe to activate royalty payments every time a leather-goods item is sold.
Mrs Iacono said this would give businesses the incentive to create long-lasting garments so they could be traded and resold in the market and also be highly desirable.
That generally only came with quality and good materials, she said.
Nearly 50% of consumers say resale value is a factor when they buy new clothing and this rises to 64% for Millennial and Gen Z shoppers.
Mrs Iacono said brands using natural, renewable fibres such as wool, which could be re-spun into new products up to six times, should be in a strong position.
"When you look at wool, it’s just incredibly recyclable and that makes it a valuable fibre for the circular economy. That is exciting, but I don’t think it’s a fait accompli and there is a lot of work to be done because the petro chemical groups are fighting hard for plastics to be recognised."
She said the gap between consumers having the right intentions and getting their money out for sustainable products was yet to close.
"But it will as the younger consumer becomes a bigger part of the market and that will eventually happen."
In France, a tax had been introduced on ultra fast clothing.
Mrs Iacono said branded companies and regulators had a role to educate consumers probably not realising they were wearing plastic items bought from big chains.
"Their whole argument is there is a cost of living crisis and we have to create affordable garments for Australians and New Zealanders, but the reality is those items are going to go to the landfill very quickly because they don’t last."
Clothing companies needed to invest in data to gain a competitive advantage and tell the story of its care and craftsmanship to get a return on investment rather than treating sustainability as "begrudge" compliance, she said.
Mrs Iacono worked in global leadership roles for 16 years for brands such as Nike and Levi’s before returning to Australia to work with fashion, luxury and lifestyle businesses including Sheridan, Saba, Sass & Bide, Jurlique and Freedom.
She said NZM had done an excellent job in its branding and made long-term connections with brands at the top end of the market.
Mindful Fashion chief executive Jacinta FitzGerald also spoke at the NZM meeting.
