Leather goods, jewellery, haute couture, textiles,… luxury is one of the largest sectors of activity in France. It raises questions about the future of this sector, which is very affected by environmental issues and societal changes.
Nowadays, responsible consumption is the new trend in the luxury sector. We are aiming for a more rational luxury, both ethical and sustainable. In particular with the second-hand market, which could grow by +12% by 2021, and reach 31 billion euros according to a study. It should also be noted that the majority of buyers of second-hand items are premium consumers.
This market is growing rapidly as consumers are increasingly committed to sustainable development. Indeed, luxury consumers favour committed brands, and learn more about brands’ CSR policies when deciding on their purchases. Thus, three main trends are at the heart of today’s consumer expectations: respect for the environment, animal welfare and ethical manufacturing.
Millennials are the big audience of these consumers because they value the CSR values of a luxury brand. Indeed, more and more informed, they want transparency and traceability on a permanent basis. According to a study, they will represent 50% of luxury customers in 2025, and will therefore have an impact on purchase methods.
The major groups, LVMH and Kering, are now competing to propose concrete and visible actions in terms of ethics and social and environmental responsibility. Some brands act a lot on this subject, such as Stella McCartney. LVMH created the Fashion Tech Lab, a start-up supported by the big names in the industry whose goal is to make fashion and ecology compatible. Kering, for its part, committed itself in 2017 to reduce its CO2 emissions by 2025. Its CEO called on financial institutions to change the way they evaluate companies in order to take into account their environmental and social performance.
Moreover, the coherence between price and perceived value is also becoming a criterion that could affect traditional luxury with the growth in prices of « iconic » luxury products: +55% in six years for handbags. Consumers are increasingly perceiving this gap between price and perceived value of luxury products. Brands should perhaps move towards a shared economy that better reflects the degree to which buyers perceive the quality of products or services and their embodiment in the price.
However, consumers have already found alternatives. First of all, with the purchase of second-hand luxury items with Vestiaire Collectif or Galeries Lafayette. Then, rental, for its part, develops with Pinel & Pinel for example. But also, on the other hand, the tailor-made approach, which is increasingly manifested as proof of exclusivity, as proposed by Le Bon Marché.
New initiatives are developing on the luxury goods rental market: dresses, bags, watches… For consumers, the use counts more than possession. Luxury brands must therefore be aware of the new rules of this market in order to recruit new customers, especially younger ones, who will buy luxury products in the future. In addition, learn from these new uses in order to adapt the offer accordingly (products, prices, experience, shops…).
In conclusion, to seduce the millennials, luxury brands must prove their willingness to protect our planet and its inhabitants. Being eco-responsible could increase brand awareness. Indeed, knowing that luxury customers are particularly attentive and become uncompromising on social and environmental issues, brands must make a sincere commitment and think about a sustainable development strategy if they want to « survive ».