How Retail Brands Can & Must Increase Sustainability

Q: What challenges do brands face in achieving sustainability?

Challenges include higher costs of sustainable textiles, like organic cotton, and expensive certification processes. These costs make scaling sustainability difficult for many retailers.

Q: How does inventory management impact sustainability?

Retailers often misjudge demand, creating excess inventory that leads to waste. Smarter forecasting and inventory management reduces overproduction and supports sustainability goals.

Q: Can reducing inventory make a measurable difference?

Yes. For example, a 1% reduction in Macy’s $3.8 billion inventory would prevent over 3.5 million items from being produced and wasted. Industry-wide, even small improvements could cut waste dramatically.

Q: Do customers want retailers to produce less?

Yes, but retail’s pre-season buying models make some overproduction inevitable. The best solution is more accurate forecasting that balances supply with true demand.

Q: How can retailers balance profitability with sustainability?

By adopting advanced inventory planning tools, retailers can minimize waste, reduce costs, and protect margins while still meeting consumer expectations for sustainable products.

One of the most beautiful things I’ve observed over the 18 years I’ve worked in the fashion industry is the evolution of a customer voice that now shouts for choices that are better for the planet. This voice is loud, it’s meaningful and it’s powerful. It is the force that will push brands towards greater sustainability, because what the customer chooses to buy dictates what a brand chooses to make.

Achieving Sustainability is a Challenge

Certifications & Higher Textile Costs are Obstacles

The difficulty for brands is that there is not a guarantee that customers will pay substantially more for sustainable products that take more time and expense to create. For example, the difference between the cost of organic and regular cotton in 2021 was nearly 3X. This translates into roughly an additional $1 for a basic t-shirt, and more for products that require more cotton like sweats and dresses. In an environment of inflation and pending recession, that dollar matters to many shoppers.

Further, if brands seek certification of their products, that also costs money (and extensive employee time) that needs to be passed along to customers. And many certifications are only for single items, which means it’s impossible to certify hundreds of new items per year. The fact is that brands want and need to serve their customers, and they generally want to become more sustainable - but the path is onerous and expensive that it becomes difficult to do so.

Inventory & Waste

Approach Sustainability Issues as Business Opportunities

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Many customers yell, “Just make less!” But, this is at odds with the mechanics of the retail industry. Retailers invest in inventory in advance of sales, making educated guesses about what customers will want to buy. They produce a cowl neck sweater style for $30 and sell it to you for $30 + 60%. It’s how they cover their operating costs (and hopefully make a margin as well!).

Despite their best efforts, retailers are always going to be wrong. Maybe a style doesn’t execute in production as intended, what was a big seller last year slows down this year or that bizarre fashion style (are people really going to wear capes?) may sell far more than anticipated. As such, this method always leads to waste.

So, what if retailers could get even marginally better at predicting and managing inventory? This doesn’t cost anything, but could save so much. Consider, for example, that Macy’s has $3.8 billion of inventory on its balance sheet. A mere 1% reduction in total inventory would mean more than 3.5 million fewer items in circulation, which would drastically cut down on waste. Implement this in all fashion brands around the world, and we would see an enormous reduction in waste and boost in sustainability.

Doing Your Part

Getting on Board with Inventory Management

Given the potential impact of optimized inventory management on sustainability, I believe Toolio is a sustainability company in addition to being a tech company. We must attack climate change from every front. Investing in better inventory management, which leads to less waste, is one great way to do that. View a demo of Toolio today, to get started.

FAQ: Increasing Sustainability in Retail

Why is sustainability becoming a priority in retail?

Shoppers increasingly demand environmentally responsible products, and their purchasing choices directly influence what brands produce. This growing customer voice is pushing retailers toward more sustainable practices to remain competitive and relevant.

What challenges do brands face in achieving sustainability?

Major obstacles include higher textile costs—such as organic cotton costing nearly three times more than regular cotton—and expensive certifications that require time and resources. These added costs often must be passed on to consumers, making it difficult for brands to scale sustainable initiatives.

How does inventory management impact sustainability?

Retailers often overproduce or misjudge demand, leading to excess inventory and waste. Improving forecasting and inventory management reduces unsold goods, minimizing waste and supporting more sustainable business practices.

Can reducing inventory make a measurable difference?

Yes. For example, Macy’s holds $3.8 billion in inventory. A 1% reduction would prevent more than 3.5 million items from being produced and wasted. Applied industry-wide, even small improvements in inventory accuracy could significantly reduce global retail waste.

Do customers want retailers to produce less?

Many customers advocate for producing less, but retail’s pre-season purchasing model makes some overproduction inevitable. The key lies in more accurate demand forecasting, which reduces excess production while still meeting customer needs.

How can retailers balance profitability with sustainability?

By investing in smarter inventory planning tools, retailers can reduce waste without sacrificing margins. Better alignment between production and demand helps brands cut costs, improve efficiency, and meet consumer expectations for sustainability.

What role does technology play in retail sustainability?

Technology platforms like Toolio optimize inventory planning, enabling retailers to make data-driven decisions that reduce waste. By minimizing excess stock, they support both financial performance and environmental sustainability.