Cloud computing could fix the fashion industry’s transparency problem

• The fashion industry may soon face new legislation that requires sustainability transparency.
• Cloud computing could allow fashion companies to share data and reduce production waste.
• This article is part of “Build IT,” a series about digital-tech trends disrupting industries.

Across the fashion industry, companies are steeling themselves for the potential passage of the EU Green Claims Directive, which could happen as early as next year.

The directive would require brands making sustainability claims to back them up with evidence and to label products accordingly. The GCD would have global implications, as it would extend to all businesses advertising to EU consumers.

The GCD still faces multiple hurdles, but if passed, it would force long-overdue change in the industry. Under the directive, consumers should be able to visit a website or scan a QR code to see proof of a garment’s fabric composition or how it was created.

But before that can happen, brands need to be able to source and share sustainability data internally and with retail partners. Cloud computing could be key to doing this in a detailed and efficient way.

Cloud computing is gaining traction

Cloud computing offers on-demand services, from storage to software, over the internet. It’s been billed as a major cost-cutting measure for companies because they can pay for the services they need, rather than rely on in-house servers. It’s also a way to streamline processes by collecting data into one easily accessible hub.

The cloud-computing industry is growing rapidly, and analysts predict it could more than double in value between now and 2029. And the fashion industry has gradually been waking up to the potential of cloud computing. In recent years, heavyweights like Mulberry and Net-a-Porter have begun working with Eon, a cloud-powered tech company that specializes in Digital IDs, QR-code labels that can be scanned for detailed information, product authentication, and customer-focused extras, such as suggestions on how to style the looks. Meanwhile, DressX, which allows users to “wear” digital garments in photos and videos, uses Google Cloud.

Still, there’s been little focus on cloud computing when it comes to sustainability data. Bharati Rathore, a management lecturer at the University of South Wales, is one expert who’s spreading the word. In her report, “Fashion Transformation 4.0: Beyond Digitalization & Marketing in Fashion Industry,” she said that the fashion industry must embrace new technologies in order to survive.

Rathore said cloud computing is a way to “store and manage large volumes of data efficiently — everything from customer preferences and purchasing behavior to inventory levels and supply chain details.” She added that it offered a central place for data sharing, making it easier for workers around the world — design teams and retail managers, for example — to stay up-to-date with each other.

If harnessed properly, cloud computing is one of a handful of digital tools that could “revolutionize the way we design, produce, and consume fashion,” Rathore said in her report.

Moving toward transparency

It’s no secret that the fashion industry has historically shied away from transparency. This is slowly changing, thanks partly to companies like Fashion Cloud, an insights platform that works with over 700 fashion brands and 25,000 retailers.

Using cloud computing, Fashion Cloud collects data and insights, and then makes them easily accessible for all parties — from website designers, who upload and describe products onto brand websites, to retail managers, who handle shop-floor operations. The company works with brands from the mass-market online retailer Zalando, which averages around 50 million customers per quarter, to Studio Anneloes, a Dutch design house that features a “footprint” tab on every product that indicates its environmental impact.

“Fashion is a terribly old-fashioned industry,” Alies ter Kuile, the cofounder of Fashion Cloud, said. “Every retailer has their own process, so nothing is standardized. What we do is ensure retailers are getting key product and sustainability data from brands, and we help brands on that journey, too.”

The GCD is intended to be a crack down on greenwashing and vague, hard-to-substantiate claims of “eco-friendly” clothes, but it’s a huge hurdle for brands accustomed to opacity. According to ter Kuile, only 50 of the brands that Fashion Cloud works with “share sustainability data in an automated way.” Meanwhile, she added, “another 350 have the sustainability data, but they can’t share it yet.”

Communication is a core issue when it comes to letting customers know exactly where their clothes come from. “Brands and retailers are asking for the same information,” ter Kuile said, referring to where the clothes were made and how many units have been sold. “But they’re currently doing that in different spreadsheets. We’re trying to automate these processes.”

Simplicity is key, too. Ter Kuile said the average age of fashion buyers — retail reps who decide which pieces are stocked in department stores and online shops — is between 50 and 60. “Typically, the people using our tools are people who don’t like software, so everything needs to be intuitive,” she added. “You can’t have five different brands with five passwords — forget about it! The process has to be the same, and it has to be simple.”

Benefits for clothing retailers

Cloud computing also provides key benefits for retailers. “For fashion retailers, quick, data-driven decisions are essential for inventory management, store expansion, and market adaptation,” Alan Holcroft, the UK manager of Cegid, a cloud-computing business, told Business Insider. Cegid supports over 85,000 retailers, including the French fashion retailer Cotélac.

Easy access to buying data means retailers are more likely to purchase only what they can realistically sell. For example, if a dress has moved only 10 units in one location in a month, it’s wildly unrealistic to buy 500 and expect them to be sold. With cloud computing, retailers can avoid overbuying stock — a key driver of fashion’s textile-waste problem. (It’s no secret that brands would sometimes rather set fire to unsold stock than discount their prices.)

None of this is to say that cloud computing is inherently sustainable. Steven Gonzalez Monserrate, a cloud anthropologist, said in a 2022 research report that data storage has a “greater carbon footprint than the airline industry.” Cloud computing is reliant on data centers, which require energy-intensive air conditioning to prevent servers from overheating. These centers also require irrigation, sometimes guzzling up water resources needed by local communities.

There are still many fashion brands that seem ill-equipped to address the GCD’s requirements. Ter Kuile said part of the problem is that too many conversations in the fashion industry focus on abstractions rather than action.

Data-sharing through cloud computing — while by no means perfect — is a practical step that allows information to be tracked at every level of product creation and, crucially, shared with customers who need it.

“We don’t need inspiration to be more sustainable and transparent,” ter Kuile said. “We need processes that enable us to actually do it.”