Why the IOU PROJECT works

By QC

“I was a fashion designer all my life,” said Kavita Parmar, one half of the brain behind The IOU Project, an award-winning technological platform that promotes transparency and story-telling at each level of the production process of clothing.

Before the inception of The IOU Project, Kavita had already began incorporating ethical practices into her own fashion business in 2006 and sold her clothes in approximately 280 multi-brand stores. Due to the success of her line, she made the decision to open her own shops. Kavita already had her own factory in the north of Spain, a small unit where she worked with artisans in India, and was already integrating vertical practices into her business. Opening her own stores that carried her own line seemed like the most logical next step.

Kavita was able to open her first flagship store after her business plans for expansion were approved from the the Lehman Brothers bank. However, by July 2008, the bank went bankrupt and informed her that they lost all her money. Disheartened by this news, Kavita felt bitter: “I got really mad because I felt that we had done everything right.”

SOME CONTEXT:

Consumerism in Spain was also changing during this time. People spent less and less on whole price and spent more on off-price discounted clothing. In fact, all the stores and boutiques that sold Kavita’s clothing asked her to produce pieces that were off-price. Ultimately, margins went down as the pressures to produce cheaper goods rose.

“I was frustrated at this race to the bottom – the race to make cheap goods. Really what that meant was lowering quality standards, not being able to work with artisan communities. We used to spend a year making a product, but now it has to be shuffled out in two months.”

Kavita and her husband, Iñigo Puente, a Massachusetts Institute of Technology (MIT) graduate who was highly associated with the tech community, wanted to change the retail game when they both recognized a paradigm shift occurring in the consumer landscape. Noticing the infusion of technology with consumerism through e-commerce sites such as Ebay and Gilt Groupe, Kavita and her husband realized that there was a large gap in the market when it came to the transparency of the supply chain.

“There was a lot of distribution with technology. However, nothing was being done in the supply chain space. People were trying to make their supply chains more opaque and complex – they did not see any opportunity for change or improvement. Whereas, all my life I had been working with artisan communities.”

Businesses, especially fast fashion retailers, hid the process on how their fast fashion, which has an incredible and rapid turnover time, was actually created. However, the media had already made the truth known about fast fashion businesses (sweatshops, unfair wages, etc.), and the call for change had been made. The problem was that many people did not know how to go about taking action.
Kavita and her husband recognized that people were now interested in transparency in the supply chain and wanted to utilize the ubiquity of the technology age to their advantage. They developed a new kind of platform that combined fashion with awareness and social change, resulting in the creation of The IOU Project.

WHAT MAKES THE IOU PROJECT DIFFERENT:

The goal of The IOU Project was to be a company on par with companies like J. Crew, while still being able to ethically and uniquely produce each garment. They have created an app that can be used to scan a unique QR code on the purchased garment that could unlock each garment’s story so the consumer can see and learn about the weaver who had woven the fabric and the person who had constructed the garment.

“Out of the 800 million people on Facebook, there are over a billion people offline who are artisans who need to get online because that this is the only way they would survive and must get their stories out there,” explained Kavita.

Another interesting aspect about The IOU project is that anyone can be a virtual store owner simply by applying for it through Paypal and a Facebook account. From there, one can obtain access to The IOU Project’s virtual warehouse and select pieces to be sold in the owner’s shop.

In one year, the couple was able to build the connections and stories, as well as develop the coding and technological platform necessary to make this transparency possible. Initially, they had no money for advertising or marketing, but were still able to attract a huge amount of interest that allowed them to gain recognition, exposure, and awards. For example, the couple recently won the Innovation of the Year Award from the 16th Luxury Briefing Awards. Also, major, well-known companies have shown interest in using the platform to tell the story about their own products. Artisan communities have also contacted them, asking for advice on how to maintain their cultural skillsets while sustaining their own livelihoods. In fact, Kavita was en route to travel to Mexico to talk to the artisan community about the future of artisans there.

THE GOAL:

The ultimate goal of The IOU Project is to collaborate and form partnerships with big brands and great distribution. Kavita and her husband also hope to bring The IOU Project to New York in the future because approximately 60% of their business is coming out of America, with the remaining 40% coming from other countries all over the world.

“We are better connected than ever. We have technology that empowers people. I think there is a generation coming around in which people believe they don’t need to own everything. There is a realization that we have limited resources and we have to be more logical about how we consume.”

written by Alexandra Sarabia, Contributor

Alexandra Sarabia is a recent graduate from The College of New Jersey with a Bachelor of Science degree in Biology.  She lives two lives – a life of art, design, and fashion and a life of Biology and research. Despite having immense experience in the scientific research realm, she has always been interested in fashion in all her life.  Her solution is to marry the two different worlds: eco-design, sustainable design, and fair trade. In addition to writing for Quality Control, she also works for KOTOBA, a knitwear brand solely created with WholeGarment® technology from Japanese knitting machine manufacturers, Shima Seiki.

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