60% of luxury goods consumers believe that the responsibility for initiating environmental, social and social transformation lies with luxury brands themselves.
The improvement of consumers’ awareness of sustainable development is forcing the progress of the luxury goods industry.
According to Fashion Business News, Boston Consulting Group and French Luxury Association Comité Colbert recently jointly released "2022 Luxury Goods Outlook: Moving forward as a Responsible Pioneer". The report evaluated 40 luxury goods company executives as well as France and Germany. The study was conducted among 2,000 luxury customers and non-customers in , UK, Italy, Spain, , Switzerland, and the United States.
Authoritative executives interviewed include Chanel fashion department president Bruno Pavlovsky, Cartier CEO Cyrille Vigneron, Van Cleef & Arpels CEO Nicolas Bos, Hermès watch business president Guillaume de Seynes, etc. The
report pointed out that the global luxury goods industry has returned to pre-epidemic levels in 2021 and is expected to climb from approximately 388 billion euros in 2022 to approximately 494 billion euros in 2026, climbing approximately 6% annually. Bénédicte Epinay, CEO of the French Luxury Goods Association, said that the resilience of the luxury goods industry is huge.
At the current point where the global luxury goods industry is rebounding, the report believes that future opportunities for the luxury goods industry will come from five aspects, namely production and resources, product life cycle, customer relations, responsibility and globalization. Among them, the report’s research on sustainable development has attracted industry attention.
survey results show that more than 66% of consumers believe that the essence of luxury goods is sustainable, and 65% of consumers will consider the commitment of luxury goods companies to sustainable development when making purchasing decisions.
As many as 80% of respondents believe that companies are responsible for the entire life cycle of a product, not just production and sales. The entire life cycle includes providing repair services, upgrading and recycling old products and materials, creating second-hand sales channels, and simplifying product traceability and certification.
If the entire product life cycle is taken into account, then fashion brands must further explore how their products are actually used and in what scenarios. When assessing the environmental impact of a luxury product, its intrinsic value and frequency of use need to be taken into account.
For example, when luxury goods pursue high quality, some products with better quality but less frequent use have higher carbon footprints. If the rating system used by luxury brands does not incorporate the concept of product durability, the result will be that a high-quality product will have a lower rating than a lower-quality product simply because the latter is made from recycled polyester fabric.
Yet durability is precisely one of the most cherished qualities of luxury brands.
When assessing the environmental impact of luxury goods, it is necessary to take into account their intrinsic value and frequency of use
The fact is that the situation is often more complicated than people think. Although people believe that there is a conceptual distinction between luxury goods and fashion with eternal value. Lionel Vermeil, director of luxury goods and fashion think tank of Kering Group, pointed out that luxury goods survive through seasons, and fashion represents seasonality.
Especially the leading luxury brands are more dependent on the output of eternal value. For example, Louis Vuitton's Keepall handbag has been popular since its debut in 1930. Cartier President and CEO Cyrille Vigneron said that with the end of excessive consumption, Cartier's strategy is to make its products iconic rather than racing to innovate.
On the other hand, fashion represents new trends and the constant pursuit of creativity, which is the source of progress in the luxury fashion industry. Driven by this drive, fashion brands are launching more and more seasonal collections and products. This is also true in the field of fragrances and cosmetics. In the early 1990s, there were about 100 product launches per year, while in 2019 there were more than 3,700 products. .
60% of luxury goods consumers believe that the responsibility for initiating environmental, social and social transformation lies with luxury brands themselves.
The improvement of consumers’ awareness of sustainable development is forcing the progress of the luxury goods industry.
According to Fashion Business News, Boston Consulting Group and French Luxury Association Comité Colbert recently jointly released "2022 Luxury Goods Outlook: Moving forward as a Responsible Pioneer". The report evaluated 40 luxury goods company executives as well as France and Germany. The study was conducted among 2,000 luxury customers and non-customers in , UK, Italy, Spain, , Switzerland, and the United States.
Authoritative executives interviewed include Chanel fashion department president Bruno Pavlovsky, Cartier CEO Cyrille Vigneron, Van Cleef & Arpels CEO Nicolas Bos, Hermès watch business president Guillaume de Seynes, etc. The
report pointed out that the global luxury goods industry has returned to pre-epidemic levels in 2021 and is expected to climb from approximately 388 billion euros in 2022 to approximately 494 billion euros in 2026, climbing approximately 6% annually. Bénédicte Epinay, CEO of the French Luxury Goods Association, said that the resilience of the luxury goods industry is huge.
At the current point where the global luxury goods industry is rebounding, the report believes that future opportunities for the luxury goods industry will come from five aspects, namely production and resources, product life cycle, customer relations, responsibility and globalization. Among them, the report’s research on sustainable development has attracted industry attention.
survey results show that more than 66% of consumers believe that the essence of luxury goods is sustainable, and 65% of consumers will consider the commitment of luxury goods companies to sustainable development when making purchasing decisions.
As many as 80% of respondents believe that companies are responsible for the entire life cycle of a product, not just production and sales. The entire life cycle includes providing repair services, upgrading and recycling old products and materials, creating second-hand sales channels, and simplifying product traceability and certification.
If the entire product life cycle is taken into account, then fashion brands must further explore how their products are actually used and in what scenarios. When assessing the environmental impact of a luxury product, its intrinsic value and frequency of use need to be taken into account.
For example, when luxury goods pursue high quality, some products with better quality but less frequent use have higher carbon footprints. If the rating system used by luxury brands does not incorporate the concept of product durability, the result will be that a high-quality product will have a lower rating than a lower-quality product simply because the latter is made from recycled polyester fabric.
Yet durability is precisely one of the most cherished qualities of luxury brands.
When assessing the environmental impact of luxury goods, it is necessary to take into account their intrinsic value and frequency of use
The fact is that the situation is often more complicated than people think. Although people believe that there is a conceptual distinction between luxury goods and fashion with eternal value. Lionel Vermeil, director of luxury goods and fashion think tank of Kering Group, pointed out that luxury goods survive through seasons, and fashion represents seasonality.
Especially the leading luxury brands are more dependent on the output of eternal value. For example, Louis Vuitton's Keepall handbag has been popular since its debut in 1930. Cartier President and CEO Cyrille Vigneron said that with the end of excessive consumption, Cartier's strategy is to make its products iconic rather than racing to innovate.
On the other hand, fashion represents new trends and the constant pursuit of creativity, which is the source of progress in the luxury fashion industry. Driven by this drive, fashion brands are launching more and more seasonal collections and products. This is also true in the field of fragrances and cosmetics. In the early 1990s, there were about 100 product launches per year, while in 2019 there were more than 3,700 products. .
Creating iconic products that generate timeless value and reducing unnecessary seasonal fashion items seems to be a potential solution to the problem of sustainable development. But at the same time, people need to know that even today's iconic products are constantly being introduced. Based on the original model, they are transformed with different colors, shapes, materials, sizes, and uses, and more products are launched. This is also very difficult. It's hard to say it's more sustainable.
Therefore, the entire luxury goods industry must consider how its products are actually used. The actual situation may be more complicated than imagined. Interviews with industry executives in the report also revealed many contradictory views and a preference for qualitative rather than data-based solutions to sustainable development.
A more practical approach to sustainable development may be that fashion brands need to continue to optimize services to meet the needs of products with a longer life cycle, including repairs to ensure product durability; second-hand resale to increase the number of uses; Recycle or upcycle to give existing products a second life; rent to limit consumption and maximize use.
Here again, the potential of the second-hand resale market is demonstrated. The report shows that the second-hand resale market will boom over the next three years, growing by 13% year-on-year, and will be worth US$52 billion by 2025, compared with an expected growth rate of only 5% for first-hand luxury goods.
The challenge for luxury brands in the second-hand resale market opportunity is how to reconcile rarity and novelty with second-hand products. While many luxury brands believe resale may cannibalize their market, more and more brands are realizing they can turn this into an opportunity. Second-hand resale websites bring young consumers into the world of brands with lower product prices, ultimately building brand loyalty and becoming a complementary sales channel.
Three ways for luxury brands to get involved in the second-hand resale market
Specifically, in the process of contacting the second-hand resale market, different brands have developed differentiated models. One model is to cooperate directly with the platform. For example, Burberry has launched a cooperation project with the second-hand resale platform The RealReal, Alexander McQueen and Vestiaire Collective.
The second model is financial investment second-hand resale platform, such as Richemont Group acquired the watch resale platform Watchfinder, and Kering Group invested in Vestiaire Collective.
The third mode is for the brand to plan projects related to second-hand products. For example, Valentino has its own Valentino Vintage project, and Bottega Veneta has recently launched a project that sells the brand's off-season products at original prices.
The report points out that although luxury fashion brands’ investments in the second-hand market demonstrate their commitment to meeting the expectations of emerging customers, luxury brands must pay attention to maintaining the dream-making attributes of the luxury industry in both primary and secondary markets, while clearly distinguishing between these. Two markets.
From the perspective of the entire value chain, the report believes that luxury goods companies are currently not participating in the ESG transformation very quickly.
This is partly because luxury goods companies have historically guarded the secrecy of their manufacturing processes, so they are not used to communicating beyond their products and brands. However, the risks involved in successfully transforming the luxury industry are very high, and each stakeholder does not have enough influence to complete the task. This is particularly true for transformation sectors where multiple industries are involved.
Marie-Claire Daveu, chief sustainability officer of Kering Group, pointed out that cooperation with other industries is the key to large-scale transformation, which applies especially to the leather industry. Take leather as an example, which covers agri-food, tanneries, animal husbandry, luxury goods and other industries. Unless stakeholders form a coalition, they will find it very difficult to achieve profound and effective transformation of practice.
Therefore, the fashion industry must unite and shift from a competitive approach to a cooperative approach to produce an impact of sufficient scale.
In fact, as long as luxury brands are willing, they can make certain achievements in the ESG field by relying on their own halo and influence. LVMH Environmental Development Director Hélène Valade also believes that luxury brands are using their prestige to support sustainable development. 60% of luxury consumers believe that the responsibility for initiating environmental, social and social transformation lies with luxury brands themselves.
In summary, this "2022 Luxury Goods Outlook: Forward as a Responsible Pioneer" provides reference ideas and confidence for the luxury goods industry to further shift to a responsible development approach. However, it is worth noting that the respondents in the report are mainly from Europe and the United States, which still cannot reflect the full picture of the global luxury goods industry, and consumers in different regions may have different views on emerging issues such as sustainable development.
As the report points out, almost two-thirds of industry growth between 2021 and 2025 will come from markets other than Europe and the United States, and the Chinese market will still become the main growth driver of the global luxury goods industry. In these non-traditional markets for luxury goods, including China, India, Vietnam , the tastes and preferences of local consumers are sometimes very different from the brand's tradition.
In any emerging area of opportunity, luxury brands must find the right balance between adapting to local market needs and maintaining their own value and identity.
In fact, as long as luxury brands are willing, they can make certain achievements in the ESG field by relying on their own halo and influence. LVMH Environmental Development Director Hélène Valade also believes that luxury brands are using their prestige to support sustainable development. 60% of luxury consumers believe that the responsibility for initiating environmental, social and social transformation lies with luxury brands themselves.
In summary, this "2022 Luxury Goods Outlook: Forward as a Responsible Pioneer" provides reference ideas and confidence for the luxury goods industry to further shift to a responsible development approach. However, it is worth noting that the respondents in the report are mainly from Europe and the United States, which still cannot reflect the full picture of the global luxury goods industry, and consumers in different regions may have different views on emerging issues such as sustainable development.
As the report points out, almost two-thirds of industry growth between 2021 and 2025 will come from markets other than Europe and the United States, and the Chinese market will still become the main growth driver of the global luxury goods industry. In these non-traditional markets for luxury goods, including China, India, Vietnam , the tastes and preferences of local consumers are sometimes very different from the brand's tradition.
In any emerging area of opportunity, luxury brands must find the right balance between adapting to local market needs and maintaining their own value and identity.
