A decade of sustainability
Sustainability matters, but does it sell? – the Global Sustainability Report commissioned by CNMI and produced by McKinsey & Company explored this issue as it relates to the luxury fashion market, with unexpected findings. The concept of sustainability has evolved: once a marketing tool, it is now becoming a critical strategic element.
Sustainability is becoming a hygiene factor for buyers and consumers. A company targeting success must therefore place it at the centre of its business strategy, also in the luxury fashion market. This is the conclusion of the ‘Global Sustainability Report: Sustainability matters, but does it sell?’ which was published by McKinsey & Company on behalf of the National Chamber for Italian Fashion (CNMI). The findings of the study were presented on 26 March 2019 at the third International Roundtable on Sustainability by Chairman Carlo Capasa: “There is no future in fashion if we do not approach the theme of sustainability in a serious way”, Capasa tells MF Fashion. “We want to share everything that is being done well, trying not to hide the problems and understanding how they can be overcome”.
According to the report, the decade of sustainability is now underway in the luxury industry. Speaking to the Fashion Network, Antonio Achille, Senior Partner, Global Head of Luxury at McKinsey & Company, stated: “A fashion brand that does not address environmental protection, social issues and corporate governance currently exposes itself to various significant risks in the consumer community. In future, brands that fail to consider these aspects will not only lose market shares, but also be totally excluded from the market.” The report is based on a survey of 90 chains in 25 countries with an estimated combined luxury purchase value of €50 billion. Collectively, over the next five years buyers expected to almost double their total spending on sustainable products, from 23 per cent to 40 per cent. A quarter also stated that they have already delisted a brand due to social or animal welfare concerns or a brand image inconsistent with the concept of sustainability.
As the study clearly demonstrates, perceptions are changing across every level of the market. Almost 70 per cent of customers are prepared to pay a premium for a sustainable product. The country of manufacture also plays a major role. In a breakdown of countries with a positive association with sustainability, Italy takes first place with 20 per cent, followed by Japan (14 per cent), Germany (13 per cent) and France (10 per cent). In terms of negative connotations, China came out worst with 25 per cent. India (11 per cent), Pakistan (7 per cent) and Vietnam (7 per cent) also fall into this category.
Buyers and businesses understand that environmental and social issues have a serious role to play in the purchasing decisions of the end user. “The consumer is more important than ever before”, emphasises Achille in the The Guardian. 80 per cent of the next generation of buyers, of Generation Z and millennials, are actively interested in sustainability. “When something becomes fashionable, it becomes powerful and they will be the guardians of this movement”, says Achille.
Neonyt at Messe Frankfurt also offers an ideal platform for this change. In the spirit of the times, from 2 to 4 July 2019 the global hub will once again address the themes of fashion, sustainability and innovation.