Fashion revolution: How AI could permanently change the industry!

Fashion revolution: How AI could permanently change the industry!

The fashion industry is facing increasing pressure to minimize its environmental impact. At the center of this transformation is the Düsseldorf-based company Retraced, which makes a significant contribution to reducing the CO₂ footprint through the digitalization of supply chain transparency and sustainability management. Founded in 2017 by Lukas Pünder and Philipp G. Mayer, Retraced now has almost 80 employees and supports 140 customers in 23 countries, predominantly in Europe, the USA and Asia. Retraced's software solution addresses the challenges of the industry, particularly lack of transparency and inefficiency in communication between brands and suppliers.

Retraced uses data analysis at three levels: supply chain level, supplier level and product level. By collecting information such as carbon footprint, energy consumption and mode of transport, a comprehensive picture of the environmental impact of fashion products is provided. This information can be made accessible to consumers via a digital product passport provided using a QR code. In France, the use of such a pass is already mandatory for larger companies, indicating a general trend towards increasing transparency in the industry. In Europe, a similar law is due to come into force in 2027 WHU reported.

Optimizing the supply chain for more sustainability

The need to optimize supply chains is underscored by the high proportion of up to 80% of a company's total carbon footprint in these processes. Companies are therefore under pressure to reduce their CO₂ emissions, which can be achieved through modern approaches such as local procurement and green logistics. Significant emissions can be saved through the electrification of fleets, the shift to rail and sea freight, and efficient route planning. These methods not only contribute to environmental protection, but also increase the efficiency and profitability of companies Sigma Earth explained.

Another technological advancement in the industry is the implementation of artificial intelligence (AI). AI not only optimizes supply chains, but also enables a personalized approach to consumers. Companies like Macy’s show how AI-powered systems can minimize excess inventory and optimize energy consumption in manufacturing facilities. From production planning to sales, AI can make the entire production chain more efficient and thus reduce the ecological footprint. The combination of Retraced and AI offers the fashion industry a concrete way to address the challenges of its environmentally harmful practices, such as Tech zeitgeist reported.

The path to transparency

Adopting digital systems to improve supply chain transparency is crucial to the success of sustainable practices in the fashion industry. Companies that rely on transparent reporting and innovative technologies gain the trust of stakeholders and meet legal requirements. Data collection challenges, such as lack of standardization and low supplier openness, also need to be addressed. Startups and established brands adapting AI show that a shift towards sustainable practices is possible.

Lukas Pünder from Retraced has set himself the goal of expanding the company into the leading provider of sustainable solutions in the international fashion industry. The training at WHU promoted his start-up ideas and created valuable networks with other founders and investors. With their approach, Retraced ensures that the fashion industry becomes both environmentally and socially sustainable - a step that is becoming increasingly urgent to achieve global climate goals.