YTao podcast with Corporate Spend CSR

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05 November 2018

Justin Pagotto:          

Hi. Welcome to our Corporate Spend CSR Thought Leadership series where we interview pioneers in social entrepreneurship and value space leadership.     

Here with me today is Jeremy Biggs, CEO and founder of Y-Tao Global, a technology platform that enables provenance and transparency for the $3 Trillion global fashion apparel supply chain. His experience as an entrepreneur has seen him working within the retail technology industry for fifteen years. He has worked across local and international markets with various partnerships, from Silicon Valley-based technology leaders to large multinational retail groups. Arriving from South Africa in 2009 with a young family, he quickly got busy with understanding how to innovate the Australian retail landscape which has eventuated with the founding of Y-Tao Global.

Justin Pagotto:          

Jeremy, welcome to the program.

Jeremy Biggs:            

Thanks for having me, Justin. Appreciate being here.

Justin Pagotto:          

My pleasure. Given it's anything to do with the supply chain and eradicating human trafficking or bonded labour, I'm always very interested to talk to people. Firstly, though, what sparked your interest in social enterprise and value space leadership? Where did it come from?

Jeremy Biggs:            

Yeah, sure. I ran a company that was developing solutions that helped retailers succeed. Particularly bricks and mortar retail groups in Australia, and we developed some technology that used smartwatches and wearable technology to empower staff in physical stores. The intent, back then, was all about human empowerment but what I realized was that the operational effectiveness and the money that was saved in the retail stores actually went back into the investor pockets, not so much into the people that were involved. So after meeting with a good friend who mentioned the global sustainability goals set out by the United Nations, I recognized and realized that my personal needs and business needed to align better with the common good of humanity and not provide more wealth for investors in the first world. I decided to do something about it. I shut down that business and began to build something to help solve this issue.

Justin Pagotto:          

Great. Tell us more about Y-Tao Global. How does it actually work? How does it actually help the supply chain in the fashion industry become more transparent, in a nutshell?

Jeremy Biggs:            

Basically it's a provenance and transparency platform that's purpose-built for the fashion apparel industry. We do this by simply activating a unique tag during the garment manufacture process. What that means is customers can then simply scan those tags and it will tell them exactly where the garments were made, who they were made by, and the stories behind the people that are involved in the manufacturing process. We also have plans to create a reward system for people who actively promote these sustainable fashion and give them an option to redeem referral loyalty points which will put money towards charitable causes.

Justin Pagotto:          

Brilliant. Why are you so passionate about making a difference in the supply chain?

Jeremy Biggs:            

I think it's sort of what I said around running a previous company and having a bit of a strategic shift and re-think about this. Going through the process of learning more about where we are today in the world. Roughly half the world's population, it's about two billion people, are living in poverty. The reality is that we live in a society that's built upon buying things in these developing economies as cheaply as possible and selling them at the highest possible price.

I believe we can change this distribution of wealth in the world through consumer influence and transparency. What we've seen is huge success in certain market verticals with some initiatives, but we haven't even scraped the surface in respect to actually fixing this problem of two billion people in the world below a two dollar bread line. We need a serious and aggressive shift in both purchase and business behaviour collectively act on common good for humanity. I'm excited to be a small cog in this very big wheel, and if my energy and effort can make a change that will be fantastic. Fundamentally I don't want to get to 70 years old and look back and go, oh now I want to do something. By then I've lost the passion and drive to make a big difference. My view is to roll up the sleeves today, while I'm still relatively young, and get busy.

Justin Pagotto:          

Who are you working with? Talk us through the nuts and bolts about how this is going to go from a great idea into becoming normal. What's the process?

Jeremy Biggs:            

Our objective is to have every single garment in the world activated with a Y-Tao enabled tag. If we can get to this scale and volume that would be amazing. The fashion apparel market, as I said, is three trillion dollars. At the moment we've only got a very small percentage of fashion brands that actually have full visibility into their entire supply chains. We've partnered with sustainable focused brands first and foremost to give them a greater share of voice.


I think that if we look at the disparity between what customers are asking for today versus what the fashion brands are able to deliver, there's a massive disparity. I think the numbers were two percent of fashion brands actually understand their supply chains all the way down to raw materials, but sixty percent of consumers, in particular, the younger generation, have an active interest in understanding provenance and transparency. This generation will act on making a purchase decision if they had a choice between a sustainably produced brand with the certifications or one that didn't. So that's the space that we play in.

Our customer today is basically a sustainably produced or ethically sourced fashion brand. There's a lot of them coming up in the world and it's very exciting to meet all of them.

Justin Pagotto:          

I think one of the key things you mentioned there is transparency. A lot of people just don't know what they don't know, and I'm always fascinated, you know you can go to a large retailer and buy a shirt for seven dollars or something, but how is it even possible to deliver that and make a profit on it at seven dollars, without having some form of bonded labor in the supply chain. Whereas if you don't know what to look at, you don't know, do you? We talked about this in our early conversation, about the great work that the ethical fashion guide has been doing as well, which is more work in your favour as well. How have you found the brands that you've been talking to? How receptive have they been to taking that next step and embedding this in their process?

Jeremy Biggs:            

The larger, more established retailers that are out there, have physical stores and they've been around for a long time, I think they battle to grapple with this type of conversation because of the scale and size of their business. Going back to your point around the seven dollar tee shirt, that's very pertinent and relevant because you're right. How do you produce something at that price and make a profit? It begs the question, where does it come from? Who made it and how does the business operate?

One of the examples I always go to is jeans. If you buy a pair of jeans today, roughly to produce a pair of jeans is about $10 dollars. If you bought that pair of jeans for a hundred dollars, as a customer you're actually quite happy to do that, but if you bought it for a hundred and five it's not exactly going to break the bank. However, if that five dollars went back to the developing world economy, directly to people that were making the products, to help their societies, to help their communities, and actually help them from a wealth distribution standpoint, it's a massive, massive difference. It's doubling their income.

So I beg this question the whole time. When talking with the up and coming fashion brands they have been very receptive and respectful of what we're doing. A lot of thought leadership and innovation is being driven forward in this space. A lot of these brands are looking for the blue sky in terms of differentiators across the world. Today we fundamentally live in a global economy, which is the view these brands have today. The digitization of selling fashion apparel products online today shows really strong growth. This is validated if you look at some of the data from Amazon, I think they're growing at about twenty-five to thirty percent compounded annual growth (CAGR) in respective online fashion apparel sales. And that's indicative of where this industry is fundemantally shifting to.

In addition, I also think that we're in the middle of quite a large societal shift. If you think about this sort of conscious consumerism that exists in the world today. The consumer has now become the activist, the social justice warrior and a massive influencer through social networks, and they're holding enormous social economic power through both buying behaviours but more prevalently their actions. I think that this industry will evolve into a very powerful network of people that will source products and interact seamlessly in a transparent way. Once consumers understand that technology can positively impact humanity, they are going to support brands, products, services, companies and corporations that are aligned with these same values.

Justin Pagotto:          

The other thing is, I don't know whether it's been taken into consideration by the brands. A lot of the brands, their major cost is actually marketing and promoting their product. What if you could save that five or ten dollars per jeans on the marketing side because you're actually appealing to the millennials and the people who wish to buy their jeans ethically? If that marketing cost can be reduced, then surely they could budget to give more money away to the producer. That's the way I look at it. I'm not sure if the value of that is being taken into consideration by brands at the moment.

Jeremy Biggs:            

Absolutely, I couldn't agree with you more. The first phase to what we've developed and are bringing to market is the transparency, provenance and aggregation of certifications first. I think very quickly the second piece is, you're right, businesses and brands are locked into spending a lot of money with two of the global leaders in marketing to gain market share. A lot of that is driven through influence and similar structures. What we think is that by rewarding consumers at a direct level for supporting sustainable and ethically sourced products, you can leverage marketing budget to disperse it more evenly and grow advocates for your brand. This also enables powerful promotion through their own social networks. That completely shifts the paradigm of how a brand goes to market and what they spend marketing dollars on.

When you split out the cost of what this looks like, taking the current cost of acquisition into consideration for a fashion brand today, traditional marketing is very expensive.

Justin Pagotto:          

That's absolutely right.

Jeremy Biggs:            

A lot of these brands are looking at lifetime customer value, not initial acquisition cost, because they don't recoup their money back on the first purchase. They have to get the second and third and fourth purchase with additional items and upsells to be successful. By enabling a new way to get their customer on board and becoming an advocate from the outset is very, very powerful and the lifetime customer value is much higher and the cost of acquisition is obviously going to be much lower as well. We're working through a lot of these numbers to understand how we get the perfect mix to actually help the brands scale and build a big consumer following.

Justin Pagotto:          

You've mentioned a little about this already in your answer, but what are some of the obstacles you've faced and how have you overcome them?

Jeremy Biggs:            

That's a good question. I think me coming from a slightly different background, I've only been involved in the sustainably produced sector for maybe a year or so now. For me, it's really been understanding all the various stakeholders involved and seeing what they do and how they do it. What I've found is that there's quite a fragmented marketplace. Some of the things that we're doing, as I mentioned earlier, is actually aggregating certifications in a very simple way, because right now the average Joe on the road doesn't understand what these certifications mean. You could have an Oeko-Tex 100 certification and people have no idea what that is.

The ability to blend both brand story and people that make products with certifications in a very simple, interactive manner that a customer can digest and trust, I think is absolutely fundamental. I think the first obstacle is understanding what that looks like and then working through the commercials around it. How do we portray those messages and interact with consumers in a way they're going to understand very simply, very easily, and have that trust mechanism in place. A lot of work has been spent around that particular component.

The other challenge is that we only have two percent of these brands really understanding their own supply chains. A lot of work has got to be done on that as well. It's a big, very archaic industry that is going to take a long time to change. In that, I will also say that I think brands that have already done most of the legwork are going to have a significantly better advantage in the near term. And the brands that are laggards, that have not really evolved, I think they're going to have quite a tough time.

Justin Pagotto:          

You're hitting that now with the trends you're seeing in corporate social responsibility. You mentioned number one, want to get your brand out into this new force of conscious capitalism that's hitting the world. Are there any other trends you can see happening?

Jeremy Biggs:            

I'll go back to that societal shift. I'm a big believer that through technology we're becoming more and more connected, and through that, this transparency is a natural consequence as well. One of the biggest trends that we're going to see is that we've got this patchwork of fast fashion getting custom products. The biggest trend that I see is that we're not going to have massive corporations in the future in this industry. I think we're going to have unique fashion brands and fashion labels that have got unique consumer following, and there's going to be millions of those little businesses. The technology that enables that today will scale and get bigger and enable that ecosystem to exist such that you can support several brands in one purchase and it'll get delivered to your door.

Jeremy Biggs:            

The actual people behind the brands won't necessarily be holding stock. The product may be shipped from anywhere in the world. We're going to be leveraging a lot of Amazon 3PL type services and warehouses. It's a very exciting space to play in because it's a massive shift in how we operate businesses today and a big opportunity for the younger generation to become a lot more entrepreneurial in their approach.

Justin Pagotto:          

Leading onto that then, what three actions would you advise our listeners to make to improve both their business and their personal corporate social responsibility?

Jeremy Biggs:            

The first one is we'd like to get a little support for what we're doing, so like our page, follow us on social media, ask questions. Please engage with me, I'm completely open 24-7 to anyone who wants to talk.

The second one is, it goes without saying, we should all push brands to provide validated data on what they do and how they do things. That should be shared openly and socially, to get the right story and the right information. Brands that close the doors and can't provide that information, we should always question why. We should support brands that do, and that have taken on that work, and I'd like to see them get a good leg-up and help support them as best we can.

The last one is just probably something we touched on before, but just remember that when you buy a pair of jeans for a hundred and fifty dollars, always think back to the ten dollars that it cost to produce. If there's no way for understanding where it came from and why it's absolutely within your rights to question what that looks like and double check a few facts behind the scenes.

Justin Pagotto:          

Brilliant. Thank you for joining the show. I think it's marvellous how technology is actually providing really great solutions for things. Five or ten years ago you'd only dream of doing what you guys are doing now. I wish you all the best with it and let's chat soon.

Jeremy Biggs:          

Thank you, Justin. I appreciate your time today and all the best.


Justin Pagotto:         

 My pleasure.

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About YTao Global:

Over 2 Billion of the worlds population live in poverty and in a $3 Trillion fashion apparel market there are hundreds of millions of people involved in the design and production of our clothes. Our Purpose is to seamlessly connect the global fashion apparel industry to deliver market leading transparency to customers so that we can understand where are clothes are made and by whom.

Jeremy Biggs (Founder & CEO) | E: jeremyb@ytao.co | T: 1300 774 152

About Corporate Spend CSR:

We are a social enterprise that creates and optimises CSR programs at no cost to you by collaborating with Australia’s foremost vetted ethical suppliers to deliver social benefits to your business, staff and charity of choice – our shared value guarantee. We empower corporates, small to medium enterprises (SME’s) and schools.

Justin Pagoto (Founder & Chief Ethical Officer) | E: justin@corporatespend.com.au | T: 02 3944 7257