Today we are thrilled to interview Önder Şenol, the Online CEO of DeFacto and the visionary behind their sustainability journey. DeFacto itself is a Turkish brand of both male and female clothing and accessories, being one of the most popular companies in Turkey specializing in the production of high quality clothing and is one of the leading brands in the Turkish fashion industry.
The Fashiongton Post: Önder, can you please provide a brief overview of DeFacto? Any interesting facts and information known only to the insiders of the brand and those who are with DeFacto for so many years as you?
Önder Şenol: DeFacto embarked on its journey in 2005, starting from a single store, with the ambitious vision of establishing itself as a global brand. Today, our expansion knows no bounds, boasting a network of over 500 stores spanning five continents. Through the utilization of robust infrastructure and cutting-edge technology, we extend our reach to fashion enthusiasts in 93 countries, all made possible by our dedicated workforce of more than 15,000 employees worldwide.
Our core mission at DeFacto remains unwavering: to offer our valued customers swift and convenient access to top-notch, fashion-forward products. In pursuit of this goal, we maintain a steadfast commitment to engaging with our global customer base, attentively heeding their preferences and needs. This commitment drives us to continually push the boundaries of innovation, not only in the realm of fashion but also in technology.
F.P.: Could you share the inception of DeFacto’s sustainability journey and elaborate on the company’s sustainability approach and its efforts to reduce its environmental footprint?
O.S.: Sustainability is an integral aspect of our business and, consequently, our future as a company. DeFacto’s founding philosophy and values are rooted in ecosystem-sensitive production, the preservation of the world and its natural resources, the enhancement of people’s lives, a commitment to social issues, and a transparent approach. Our sustainability strategy is aligned with the United Nations Global Compact, and we proudly stand as one of the initial two brands in our industry (in Turkey) to have signed the Global Compact. Additionally, we are active members of the Better Cotton Initiative. As a global brand, we approach all our business processes with a mindful consideration of the planet’s future wherever we engage with our customers worldwide.
Another critical focal point on our agenda is the promotion of environmentally friendly and sustainable production practices. We have realigned our manufacturing and R&D processes towards the goal of becoming a “climate-positive” brand and eliminating our carbon footprint. By 2024, sustainable materials will comprise 35% of our total production. A noteworthy example is our Apple Leather collection under DeFacto Life, a pioneering application of vegan leather in the fashion industry. This collection is set to expand further in the coming year. We remain committed to drawing inspiration from nature, minimizing the consumption of raw materials, water, energy, and natural resources, all within our sustainable models produced from recycled materials.
Under the “Dreams from Fabric” project, we contribute to reducing textile waste by donating excess fabric, accessories, and textile waste products from DeFacto factories and suppliers to vocational high schools. At these schools, students creatively recycle these materials into accessories and clothing items. Since 2021, volunteer designers from DeFacto stores have been providing training to students, sharing their experiences and insights on sustainable fashion. The final products created by these students are made available for sale in select DeFacto stores, with all proceeds going to the “Hope Foundation for Children with Cancer” (KAÇUV). Initially launched in two schools in Turkey in 2018, this project has since expanded to cover 24 provinces, encompassing 95 schools and benefiting 4,834 students. To date, a total of 15,300 metric tons of materials have been distributed to these schools.
F.P.: What is the percentage in presence of DeFacto on the local Turkish fashion market comparing to internationally?
O.S.: Türkiye is undeniably our largest market, consistently securing a position among the top two largest fashion brands annually. This underscores our unwavering commitment to our domestic market at DeFacto. Simultaneously, we place significant emphasis on global expansion and take immense pride in our annual strides towards establishing the DeFacto brand on the international stage. Our approach is anchored in meeting customer expectations while respecting local nuances.
In 2023, we celebrated the opening of 10 new stores abroad and 8 in Türkiye, propelling our total store count to 513. Our international presence now spans across 224 stores, and we have set our sights on achieving both a physical and online presence in 180 countries by 2026. In short, it can be confidently stated that 32% of our revenue originates from our international stores.
F.P.: What are the current operational activities of DeFacto in the United States, and which distribution channels does the company utilize here?
O.S.: For 2 years, we have been selling in the US through Amazon USA, but as of this year, we aim to open a warehouse and manage our sales operations in-house as DeFacto. Once our warehouse becomes operational, we will make our sales through Amazon USA and Walmart channels. We are also looking for new marketplaces.
F.P.: What specific measures does DeFacto undertake to enhance product quality and lower return rates?
O.S.: According to consumer research, 3 out of the top 5 reasons why consumers abandon shopping are related to returns, with extra costs for return shipping ranking the highest. Rather than passing on the return shipping costs to the customer, DeFacto is working on reducing the return rate. DeFacto suspends the sale of products with a return rate above 20% and inspects them to identify any potential issues with the quality or size of the product. The company also analyzes the reasons for returns and informs the relevant departments about product details. In addition, DeFacto improves product reviews by increasing the number of reviews, adding photos to the reviews, filtering by pattern evaluation and score to help customers better understand the products before purchasing.
F.P.: In light of the continuous growth of e-commerce, how is DeFacto adapting its business model to align with the digital age? How does the company stay abreast of the latest technological trends and ensure its competitiveness in the evolving digital landscape?
O.S.: At DeFacto, we anticipated how critical the use of technology would be for both production and the right marketing channels. As a reflection of this perspective, we established DeFacto Technology a decade ago to create our entire technological infrastructure. Our team of more than 300 developers who make up DeFacto Technology, the technology arm of our company, develop the infrastructures of our omni-channel technologies. This allowed us to accomplish an extraordinary success story, especially during the pandemic. In 2021, we reached the level we had planned to reach in 2025. We increased the number of countries we operate in from 28 to 93.
Using artificial intelligence, we analyze and classify the sentiment of customer comments in every language from our own online channels and all domestic and international marketplaces, convey the content to the relevant departments and ensure that actions are taken to increase customer satisfaction.
F.P.: Could you provide insights into DeFacto’s digitalization strategy and how it positions the company ahead of its competitors?
O.S.: Today, the physical world is more digital than ever while the digital world is much more physical than before. ‘Phygital reality’, a concept born with this situation, is one of the most important trends for consumers in the new era. We believe that the future is ‘phygital’ and offer industry- leading phygital innovations for our customers around the world. Thanks to these innovations and technology, we offer our customers a unique experience by bringing the physical and digital worlds together.
F.P.: DeFacto has made substantial technology investments recently, such as mobile app development and the implementation of AI. Can you elaborate on the company’s overarching technology strategy and its impact on customer experience?
O.S.: We have made and will continue to make significant investments to use data more effectively, utilize big data platforms and cloud technologies, and develop AI-based projects. Thanks to our innovations and technology, we bring the physical and digital worlds together to provide our customers with a unique experience.
Since the end of 2021, it has been possible to experience these innovations at the “Infinity”- themed “phyigital” store we opened in Berlin. In our Berlin store, we designed a store experience that utilizes the leading technology in the retail industry, where our customers will experience the next generation retail concept in depth. For example, our customers can see the product on themselves on the smart mirror without ever wearing it and decide what to buy without visiting the store. Customers can get support from robot consultants on all their questions and how to benefit from the smart store. Smart cabins allow customers to request the product they want without leaving the cabin. Products in the desired size and color are delivered to shoppers within 30 seconds. They can get information about the products using virtual glasses in the store. Meanwhile, in addition to offering a digital experience in our Berlin store, we also bring our customers together with original artistic works. Artist Deniz Sağdıç, who recreates all kinds of used objects and waste materials as works of art in the art world in line with the principles of recycling and upcycling, exhibits two of his works produced with DeFacto’s textile wastes in the DeFacto Berlin store.
F.P.: What steps has DeFacto taken to improve both online and in-store customer experiences?
O.S.: In line with our vision of “making our customers fall in love with us”, we will analyze their shopping trends and accurately interpret their messages to us, leading them to make smarter choices, and to benefit from those choices for longer. It is important to offer personalized experiences tailored to the customer with data analytics and predictive algorithms, and to invest in technologies that minimize the impact of sudden fluctuations in the supply chain.
F.P.: Could you outline DeFacto’s expansion plans for the next five years, both domestically and internationally, including your plans for the U.S. market?
O.S.: EBRD invested TRY 1.1 billion in our company and acquired a minority stake. Our cooperation agreement with the EBRD, one of the world’s foremost financial institutions operating in Central and Eastern Europe, Central Asia and South and Eastern Mediterranean, is an important step not only for us but also for the entire retail sector. This is an indicator of the strong momentum we have gained globally.
We aim to operate in 180 countries by 2027. We are taking steps towards our goals together with technology. We believe the future is ‘phygital’ (convergence of physical and digital) and we are delivering industry-leading ‘phygital’ innovations for our customers worldwide. Ultimately, our continued global success is based on our ability to adapt our offering to local values, using data and technology to respond to the needs of this culture.
As part of this year’s plan for the US, we intend to access new sales channels through the warehouse we are opening. Thus, we plan to move from a single stock pool to a multi-channel operation, keeping our product range wide in each channel and offering our potential customers our entire collections.
F.P.: Could you tell a little bit more about the investments and initiatives DeFacto has undertaken in sustainability, spanning from production to product collections?
O.S.: Our founding philosophy and values are based on production that respects the ecosystem, protecting the earth and natural resources, adding value to people and a sensitive stance towards social issues. With this awareness and consciousness, we have based our sustainability strategy on the United Nations Global Compact. We are one of the first two brands in our sector to sign the Global Compact. In addition to these activities, we are also taking major steps to help the end consumers we reach to reduce their carbon footprint. We transparently and clearly explained our efforts in this context in our Sustainability Report, which we shared with the public for the 9th time in 2022.
Based on the inspiration we draw from nature; we continue our efforts and expand our sustainable collections. T-shirts obtained by recycling nature-damaging waste such as plastic bottles and pants produced without water are among the most important examples of our sustainability efforts.
Under the umbrella of DeFacto LIFE, we bring our customers our green-labeled products produced with recycled materials or materials obtained from sustainable sources. Each DeFacto LIFE product is produced with materials obtained from sustainable sources such as organic cotton, BCI cotton and recycled polyester. We also develop production methods that save energy and water. Thus, we are trying to reduce the threat to the climate.
Our recyclable Apple Skin DeFacto Life collection, made from apple peels and pulp, stands out as one of the best examples of our sustainability efforts. We produce all of our products in this collection by recycling the apple peel and pulp waste left after the industrial processing of apples. This collection, which we are presenting for the second time, is one of the pioneering applications of vegan leather use in the fashion industry. Our collection includes a wide selection of products such as shoes, bags, wallets, hats and buckles for both men and women.
F.P.: The UNGC is recognized as the world’s largest sustainability platform, and sustainability is increasingly significant for the fashion industry. DeFacto is participating in the UNGA Private Sector Forum for the first time. What are your expectations for this participation, and how do you envision it contributing to the brand and your organization?
O.S.: The United Nations (UN) Global Compact supports companies around the world to align their strategies and operations with the 10 principles, leading the way to achieve the Sustainable Development Goals by 2030. The UN Global Compact is the world’s largest corporate sustainability initiative with over 15,000 corporate and 5,000 non-corporate members from more than 160 countries.
Being an invited participant at the 78th Private Sector Forum, organized this year under the chairmanship of United Nations Secretary General Antonio Guterres, is a very important opportunity for both our company and our country.
As the only invited retail brand from Turkey, we will come together with 90 participants including private sector representatives, government spokespersons and non-governmental organizations. As DeFacto, we will share our actions and how we reflect the Sustainable Development Goals to our company, employees, production facilities, stores, and society. We will discuss our roadmap and goals for sustainable development in the coming years. We are very proud to share with global leaders in the United Nations building our exemplary work on many important global issues, ranging from climate change to the water crisis, from human rights to gender equality. As a leading brand with a presence in 93 countries, we will continue to represent our country in the international arena.
F.P.: Recently, a devastating earthquake occurred in Morocco. DeFacto also operates there. Could you briefly describe your activities in that region? Have you taken any actions regarding the earthquake, or do you have any plans for the coming days?
O.S.: First and foremost, we extend our condolences to the lives lost in the recent earthquake in Morocco, offer our sympathies to their families, and wish a speedy recovery to the injured. DeFacto has been operating in Morocco since 2015, and we have been in constant communication with our regional managers, closely monitoring developments. I am pleased to inform you that there were no casualties among our employees in our 30 stores in Morocco. While a few of our stores were affected by the earthquake, our top priority remains the safety and health of our employees and customers. Therefore, we promptly initiated the necessary precautions. Our teams have been working to assess the areas around the damaged stores and implement the required safety measures.
Looking ahead, we have already planned out the next steps. Following the tragic earthquakes in our home country, we initiated a project in collaboration with the Ministry of Family and Social Services to provide clothing for children in need. We aim to extend this project to Morocco as well. DeFacto is committed to covering the clothing needs of all children affected by and sheltered after the earthquake in Morocco for an entire year.
F.P.: And, traditionally, what would be your piece of advice to the readers of The Fashiongton Post?
O.S.: Fashion is about crafting one’s unique style and expressing it with freedom, a value that takes on even greater significance in today’s world. Fashion serves as a powerful medium for individuals to articulate their identity, emphasizing the prominence of personal style. This is why the selection of high-quality, comfortable attire is so crucial, as it not only enhances self-assurance but also aligns with our commitment to sustainability. At DeFacto, we actively encourage our customers to transcend trends, combining seasonal standout pieces with their distinctive style, thereby nurturing creative dressing that reflects their values. Fashion should not merely concern itself with outward appearances; it should also be regarded as a means to boost self-confidence and contribute to a sustainable future for our next generations.