connecting the dots… global fashion market shifts: their impact on the future of sustainable luxury

Although it’s evident that many fashion companies are starting to take tangible action to address sustainability, after reading this year’s industry reports, I can’t help but feel like the narrative surrounding the topic is incohesive.

For me, the most perplexing part is the relationship that sustainability has with luxury, as overall this sector performed worse than others such as sportswear and fast fashion (BoF 2021 Sustainability Index, FOUR PAWS 2021 Animal Welfare in Fashion). Initially, luxury brands were generally dismissive of this bothersome buzzword, now they present sustainability as both a challenge, opportunity, and a core business value.

But how can luxury be sustainable if its being is rooted in secrecy, embracement of excess, and the quest to deliver beauty and pleasure no matter the cost?

This question, although fascinating, I think is secondary.

More relevant and one that I will explore in this article is the question:

What incentive does luxury have to become more sustainable?

We may agree on why luxury should become sustainable, but the intrinsic motives remain enigmatic. Societal pressure is probably not enough since we know that in order to succeed in something very difficult, one has to have a strong internal motivation. I also think it would be idealistic to expect companies to possess genuine feelings of empathy or responsibility powerful enough to drive the complex and costly transformation.

However, as the market changes as rapidly as ever, examining these global trends reveals both opportunities and threats for the future of sustainable luxury.

The first defining factor is technological transformation. From a technical viewpoint, this entails tangible and convenient solutions to sustainability concerns - blockchain for traceability, AI demand forecasting for overstock reduction, eco-friendly fabrics, to name a few. If we consider the long-haul, technology will also affect the interaction with fashion itself and the emergence of new segments of clients who perceive themselves and others only in relation to and through the lens of technology. Various companies have shown enthusiasm towards innovations such as VR, metaverse, 3D printing, but their approach could be characterized as experimental - project-based. These technologies are still early-stage, however if we will experience innovation-induced transformations, those who pioneered the technology will most likely dominate the market.

The main luxury market will shift to Asia, namely China, where consumers share more collectivist values and are more eager to adopt innovation. Current young generations, already exhibiting higher social and environmental awareness, will acquire economic power, allowing their purchases to better reflect their values.

Another determining factor will be the need to establish closer relationship-centric ties to clients and their communities. But the closer we let somebody in, the more they can see. It’s going to be increasingly difficult to create trust, loyalty, and intimacy without being radically transparent and authentic. And if the future consumers are more educated and interested in sustainability, they will ask more complicated questions and expect more sophisticated answers.

Lastly, luxury is synonymous with excellence, and nothing can shatter the perception of brand’s excellence more than being placed at the bottom of a hierarchy. The usual financial performance rankings feel rather impersonal and gain little public attention, but the many indexes, apps, and reports analyzing brand’s sustainability progress are more widely discussed and underperformance in them might be a source of disreputation.

Normally in luxury, the more subjective measures of prestige or exclusivity were the focus of competition, but the score-based external evaluations give rise to new, more structured hierarchies. Preserving the core DNA of luxury companies may therefore require obtaining high scores in these evaluations.

In conclusion, the constant shifts in consumer behaviour create the need to add new meanings to the concept of luxury and it is becoming increasingly likely that sustainability will be a part of its future definition. The incentive to invest in sustainability will depend on the direction that technological transformation takes and the consumer it creates - probably one that chooses novelty over heritage, biofabric over leather, but also one that may need constant doses of newness to remain interested. Brands will also be turning towards Chinese consumers so their perception and eagerness to support sustainability will be crucial. Increasing purchasing power of younger generations should theoretically enable the declarations of support for sustainable fashion to be directly translated into buying decisions. In order to preserve the element of excellence, luxury companies may have to strive towards better performance in rankings, but there is a possibility that this will happen through unverifiable claims and box-checking.