Why fashion needs cutting edge value propositions to beat net zero. Solar takes on AI, and robotaxi - the new Model T
McKinsey has a six-point plan for fashion to avoid flunking its net zero grades, we look at the creative challenge of designing new value. Solar vs. AI; and robotaxi's promise of affordable rides
As technology and the learning curve drive prices down for solar and personal mobility, what hope is there for fashion from its already rock bottom cost model other than to see margins squeezed by sustainability demands? Not so, says McKinsey and this month we lead off by celebrating the magical role brand creativity can play in conjuring new forms of value at the intersection of a changing ‘net zero culture’ and reimagined value chain.
Elsewhere we celebrate the winners in Wright’s Law where tech and production learning curves are making sustainable options irresistible. That is, if it wasn’t for that pesky but brilliant AI…
Fashion has to turn a challenge into an opportunity if it is to meet net zero targets
We’ve reported before on the struggle fashion brands are having keeping up with their decarbonisation targets (a little under two-thirds will fail at the present trajectory). New McKinsey research makes the case that it really should not be an insurmountable challenge. They say, “most fashion brands could reduce their GHG emissions by more than 60 percent for less than 1 to 2 percent of their revenues.”
Sadly, they share little hard evidence of how they reached this number (perhaps it will follow). For now, though, they do give us a useful model for accelerating decarbonisation in fashion, drawn from both consulting experience in the category and the successes they have seen in other industries:
It may seem much of this is easier said than done. But if we alight just on #1 - the brand challenge of creating commercial value from sustainability - research we conducted last year points to some opportunities:
Sustainable curation: cynicism about empty sustainability rhetoric in fashion leaves shoppers looking for trusted endorsers; taking this role is surely just a lateral step for retail style curators like Liberty’s, Selfridges, Goodhood, END clothing and the like
Post-secondhand: Vinted is now growing at over 5x the rate of Depop as ‘thriftiness’ becomes the norm. But as second hand mainstream expands we hear complaints from the young and style-conscious that both platforms are heaving with fast-fashion flips. No style-forward brand will survive a transition to mass market thrifter, so who will claim premium positioning here as brand fragmentation happens?
Appreciating fashion: High-end streetwear has joined haute couture in attaining a resale value that can often achieve cost appreciation in a category where value usually melts into air. Can durable / sustainable style pull off the same trick?
Sacred shoes: As any sneakerhead knows, shoes are sacred. That may be why there’s a hard-stop here for many that prevents them shopping shoes secondhand; the retailer who solves this challenge stands to discover untapped value
Some of these topics are covered in our ‘Windows on net zero culture’ research report, these and other trends are detailed elsewhere in our category-specific content - if you work with fashion and are interested in accessing more net zero trend insights from 33_Zero drop us a line - jamesp@33seconds.co - we’re happy to share data with subscribers to this email.
Sustainable style: How fashion can afford and accelerate decarbonization, McKinsey
Is Tesla readying the biggest price drop in automobile history?
After a quarter it would prefer to forget, in which new car deliveries dropped precipitously amidst a Chinese EV price war, Tesla stock rebounded on April 5 as Elon Musk announced they would be unveiling their ‘robotaxi’ in August. Tesla may be behind Baidu and Waymo in launching robotaxis, but it has the data advantage. Its long-running autonomous driving project draws on what Ark Invest calculates to be a huge data advantage - 700M+ miles of full self-driving run rate, giving it 50x more data than the nearest competitor.
Aside from the promise of pollution free streets and more productive travel time, the big story of robotaxis long-term, in the Ark Invest’s analysis, is their potential to dramatically reduce the cost per mile of personally mobility. Battery prices continue to fall, (driverless) ride-hailing prices will decrease, personal productivity will increase (time gained when we would previously have been driving) and the total cost of ownership of autonomous-informed EV drivetrains will move into a sharp downward trajectory.
Ark claims these factors and more mean the cost per mile of personal mobility will begin to fall for the first time since the Ford Model T.
Musk’s robotaxi announcement was, of course, made on X in typically irreverent style with no further detail forthcoming. If, like Bloomberg, you’re skeptical, then add a few years onto your forecasts. Either way it seems apparent that even bigger disruption is coming to an already buffeted automobile sector.
Elon Musk announces Tesla will unveil a ‘robotaxi’ on August 8, CNN
Tesla Needs Cheap EVs. Musk Offers a Robotaxi Meme
Solar costs down | AI demand up
Innovation junkies remain impossibly optimistic that we’ll face down the climate challenge against mounting evidence of humanity’s thudding resistance to change. That’s because their faith is pinned on an almost century-old concept observed by aerospace engineer Theodore Wright. In 1936 he identified the cost of producing airplanes decreased by about 20% for every doubling of total aircraft production.
Since then, Wright’s Law has proved itself time and again, with particular significance in microchips where the cost per transistor has decreased by 50% every two years. Nuclear power and pharmaceuticals don’t tell the same story due to the particular complexities they encounter in regulation, market demand and technological challenges.
But solar energy is unquestionably on Wright’s learning curve, with its already impressive learning rate jumping from 27% to 44% as data from 2023 and 2024 are added into calculations:
As reported by Exponential View, this is a timely acceleration coming just as ramping AI demand from power-hungry data centres is calling for ever-more energy. Some estimates claim AI could account for 3-4% of global energy use by the end of the decade. If Google used generative AI in every search, it would need 4.1 million graphics processing units (GPUs), with a daily electricity consumption of 80GWh.
A University College London startup may have an answer. Sifted reports that Oriole Networks has raised a £10m seed round to fix the bottleneck caused by outdated connectivity technology in AI supercomputers. Instead of depending on a typical ethernet connection Oriole uses optical fibres which can speed data transfer between GPUs by up to 100 times. This will speed up AI training and cut the power demand from the network (roughly 20% of the overall AI process).
Chartpack: An update on the declining cost of solar, Exponential View
Breakthrough could help train AI 100 times faster while cutting energy use, Sifted
About 33_Zero
33_Zero offers low commitment strategic workshops designed to help contextualise your brand against the backdrop of ‘net zero culture’. Uncover the opportunities that will emerge in your category as these forces shape new ideas about value, change shopping behaviours and as whole new sub-categories emerge in the growing sustainable economy. We work with both the new brands redefining categories - like cultivated meat startup Ivy Farm - and established brands like Nike, who are raising awareness of their initiatives in this space.
Workshops are led by our Strategy Partner, James Poletti, who has years of experience steering brand strategy projects in technology, finance, fashion, automotive and other categories for clients like Hyundai, Samsung and Adobe.
Email jamesp@33seconds.co to find out more.