What is “True Price”? Does this trend help make fashion more sustainable?
What exactly is “True Price,” and can it truly steer the fashion industry towards sustainability? In today’s rapidly evolving landscape of environmental and social awareness, a new ethos is taking root in consumerism, known as “True Price.” This concept aims to unearth the obscured social and environmental tolls entwined within our daily shopping routines, offering consumers a fresh perspective on the true repercussions of their consumption decisions.
At its core, the notion of True Price advocates for the integration of social and environmental costs into product selling prices. This means that the price tag of an item should not merely reflect production and distribution expenses but also encompass its broader impact on society and the environment. By adopting the True Price strategy, businesses can potentially unlock both economic and social dividends.
How Zara calculates the price of a shirt.
Presently, numerous costs associated with product manufacturing and distribution evade inclusion in the final selling price. This discrepancy exacts a heavy toll on the economy. However, as the True Price paradigm gains traction, corporations and institutions are gradually embracing its principles. Non-governmental organizations and governmental bodies are also entering the fray, aiming to foster transparency regarding costs and nudging consumers towards more sustainable consumption habits.
To fully grasp the essence of True Price, it’s crucial to comprehend the concept of hidden costs. These are expenses that lurk beneath the surface, not directly factored into a product’s selling price but profoundly influenced by societal or environmental factors. For instance, the production of a single item might trigger environmental degradation, compromise worker health, or deplete natural resources, yet these costs remain invisible within the product’s price tag. Therefore, illuminating these hidden costs is pivotal in enabling consumers to make informed decisions regarding the social and environmental ramifications of their purchases.
In the realm of fashion, many renowned brands often mask these hidden costs during garment production. A recent study by the Impact Institute and ABN Amro Bank of the Netherlands uncovered that the listed price of a pair of jeans, averaging 33 euros, only scratches the surface of its actual cost. This seemingly modest price tag encompasses expenses such as water usage, production-related pollution, and wages for workers in developing nations.
The store offers an additional option – true pricing.
However, confronting this reality head-on, brands like Patagonia have spearheaded the integration of True Price principles. They meticulously calculate the genuine costs of their clothing, spanning from fibers and fabrics to manufacturing processes, thereby weaving every facet of their supply chain into their pricing model. This heightened transparency not only empowers consumers to make conscientious choices but also enhances their awareness of a brand’s commitment to sustainability and fairness.
Moreover, True Price research unveils a striking consumer sentiment – 95% of consumers are willing to pay the true cost if it were the default price, encompassing both social and environmental expenses. This burgeoning trend underscores a seismic shift in consumer psyche, signaling a growing propensity to invest in ethically sourced and sustainable products.
In European supermarkets, the manifestation of this trend is palpable. Certain Albert Heijn stores in the Netherlands now afford customers the agency to choose between the standard price and a slightly higher “true price.” Accompanied by posters and QR codes, consumers can scan and delve deeper into the significance of these options, thereby actively participating in shaping a more sustainable future.
Undoubtedly, this trend heralds manifold benefits for consumers. It furnishes them with a nuanced understanding of a product’s true cost, offers opportunities to champion sustainable endeavors, and imbues a sense of gratification in contributing to philanthropic or environmental causes. According to Nielsen research, a staggering 73% of consumers are willing to shell out more for products from brands committed to sustainable practices.
Yet, for retailers and brands alike, embracing True Price poses a formidable challenge. From communication hurdles to price management complexities and the imperative for heightened supply chain transparency, navigating this paradigm shift demands strategic foresight. Nonetheless, as Mike Barry, former Director of Sustainable Business at Marks & Spencer, contends, True Price could emerge as a potent strategic tool, affording companies a deeper understanding of their true costs and facilitating sustainable long-term endeavors.
In response to this pressing reality, pioneering brands like Patagonia have embraced a rigorous approach, meticulously dissecting the true costs embedded within clothing production. From the inception of fibers and fabrics to the final stages of manufacturing, they meticulously scrutinize every element of their supply chain. This dedication to transparency not only fosters consumer awareness but also underscores their unwavering commitment to sustainability and equity.
Simultaneously, groundbreaking research on True Price illuminates a profound shift in consumer attitudes. A staggering 95% express willingness to embrace the true cost paradigm if it were the norm – an inclusive price encompassing both social and environmental footprints. This seismic shift signifies a growing appetite for ethically sourced, sustainable products, reflecting a broader societal evolution towards conscientious consumption.
The tangible manifestation of this trend unfolds in European supermarkets, where select Albert Heijn outlets in the Netherlands empower consumers with choice. They can opt for the standard price or elect to pay a slightly elevated “true price.” Emblazoned with posters and QR codes, these store aisles serve as interactive platforms, enabling consumers to delve deeper into the ethos behind their purchasing decisions.
Indeed, this trend heralds a plethora of benefits for consumers. Armed with insights into the true cost of products, they wield the power to champion sustainable endeavors while deriving satisfaction from contributing to noble causes. Nielsen’s research underscores this sentiment, revealing that a striking 73% of consumers are willing to invest more in brands committed to sustainable practices.
However, for retailers and brands navigating the terrain of True Price, challenges loom large. Communication hurdles, intricacies of price management, and the imperative of heightened transparency across supply chains pose formidable obstacles. Mike Barry’s insights underscore this conundrum, highlighting concerns over potential public backlash, particularly amidst economic upheaval. Nevertheless, True Price holds the promise of emerging as a strategic management tool, affording companies deeper insights into their true costs and catalyzing enduring commitments to sustainability.
