Source: www.fibre2fashion.com
While brands and retailers that have subscribed with Better Buying over a number of ratings cycles have continued to make some improvements, the overall industry score for soft goods (garments and footwear) companies has remained static, according to the Better Buying Purchasing Practices Index (BBPPI) report 2023. The industry score was 66 points over three consecutive ratings cycles, despite this period seeing an unprecedented focus on the issue of buyer purchasing practices, due to the COVID-19 pandemic, and a number of initiatives aimed at accelerating change.
Dickson described the improvements seen among repeat subscribers in payment and terms, and in cost and cost negotiation, which includes practices such as pricing to cover the full costs of production (up to 44.3 per cent in 2023 from 41.9 per cent in 2022), and the reduction in buyers’ use of high pressure negotiation strategies with suppliers, as ‘a nice surprise,’ but again cautioned that behind the average category scores lies a lot of variation with some subscribers performing above the average, and others performing below it. Overall, suppliers reported that payment terms have not improved since COVID-19, and while one repeat subscriber increased their score in cost and cost negotiation by a remarkable 18 points, for example, another saw their score fall by 10 points.
For the 2023 ratings cycle, suppliers were asked a new question, about the extent to which their brand and retailer customers were offering them long-term, formal commitments for ongoing business.
Dickson added: “Suppliers were telling us how important these commitments were for their long-term sustainability, their ability to pay living wages, ensure good working conditions, reduce negative environmental impacts, and optimise production, so we wanted to know how common they were. Unfortunately, we found that far too few buyers are offering these commitments; 72.6 per cent of supplier ratings showed nothing but transactional orders or at most, formal commitments of less than a year’s duration. For real impact, suppliers need to start seeing commitments of three, or ideally five years’ duration.
“The declines we have seen this year in planning and forecasting, and in design and development, really hammer home why companies, even those that are already engaged with us, have to stay on top of this. Things can change a lot, even in a year. By checking in with suppliers every year, via Better Buying’s data collections, companies can avoid being blindsided by problems and risks which, had they been identified in time, could have been prevented, or mitigated, before they became critical.”
