Joint study by BCG and the Colbert Committee reveals that 65% of consumers take into account companies’ commitment to sustainable development when making purchase decisions
PARIS, June 30, 2022 /PRNewswire/ — The luxury industry has shown resilience with a return to pre-COVID performance levels and an estimated sector growth of more than 6% between 2022 and 2026. Now more than ever, the industry is facing changes in paradigm in all areas: production and resources, life cycle, customer relations, corporate responsibility and globalization. This is reflected in the findings of Luxury Prospects 2022a new report published by the Boston Consulting Group (BCG) and the Parisbased on the Colbert Committee.
The report is based on qualitative analysis of approximately 40 luxury business executives and a survey of 2,000 luxury customers and non-customers in France, Germanythe United Kingdom, Italy, Spain, SwissY the United States. According to the report, 65% of consumers consider brands’ commitment to sustainable development when purchasing luxury products, nearly one in two are interested in the concept of a virtual online store, and 80% believe that companies luxury have a responsibility in full life. cycles of its products, beyond production and sale.
As well as providing a comprehensive overview of consumer perception and behaviour, the report details five opportunities for luxury fashion houses that are critical to act and become bold and responsible pioneers of change:
- Production and Resources: From excellence in core expertise to responsibility throughout the supply chain, the industry must perpetuate quality and accelerate innovation in the face of scarce resources.
- Life cycle: From token products to responsibility for entire product lifecycles, the industry reconciles sustainability, use, rarity, and novelty.
- customer relationship: From physical experience to digital reconciliation, the luxury industry must translate excellence into new experiences.
- Responsibility: From competitive advantage to collective imperative, luxury brands must lead the ESG transition in coalition.
- Globalization: From unreserved globalization to a reassessment of geostrategic dependencies, these companies must navigate new territory and anticipate risks.
A source of national pride in France Y Italy
The luxury industries of France and Italy were found to have an exceptional consumer profile in their home markets: 85% of people surveyed in France and 80% of Italian respondents consider the industry to be a source of national pride. French respondents believe that luxury is the industry that best highlights their country.
According to consumers in the countries surveyed, the luxury industry is defined by quality (according to 64% of luxury customers and 56% of non-customers), craftsmanship (according to 42% of luxury customers and 41% of non-customers) and creativity (according to 38% of luxury customers and 30% of non-customers).
Responsibility: from a competitive advantage to a collective imperative
Insights from executive interviews indicate that luxury brands have already initiated environmental and social change, in part because the nature of their products has always required some form of restraint.
While 62% of industry customers believe that luxury products are durable, the industry needs to do more as 60% of consumers believe that luxury should be responsible for starting the environmental and social transition and the 80% believe that luxury fashion houses should commit to managing for a lifetime. product cycles.
Joël Hazan, managing director and partner at BCG and co-author of the report, explains that “the industry is now shifting from a competitive mentality to a coalition mentality: leading luxury companies have understood that they must work together on key environmental issues for them to emerge. with solutions at scale. The goal is to build on the industry’s DNA of exemplarity and quality to develop strong and sustainable standards at the industry level, moving from a responsibility for quality to a responsibility for transmission.”
A key way for luxury fashion houses to manage the life cycles of their products is through the second-hand market, which has a positive impact on the ecological footprint of products and gives some fashion pieces a second life. decades after its first appearance. Driven by younger generations, with 83% of Gen Z willing to rent or own their clothing only temporarily, the second-hand market is growing twice as fast as the first-hand market and is expected to reach more than 50 billion euros by 2025.
From physical experiences to digital reconciliation
The luxury industry is perceived to lag behind other industries when it comes to digital, according to 65% of respondents. While brands are still looking for a model that combines an online presence and a premium in-store experience, almost seven in ten people believe that the digital experience provided by luxury brands is not on par with an in-store experience.
Investing in the metaverse is an opportunity for luxury brands to ensure they communicate with their current and future customers. Among consumers ages 18-34, 64% believe the metaverse makes it easier to discover luxury brands, and 59% believe the metaverse could eventually replace current social media. This is most evident with Gen Z and Generation Alpha, who have grown and continue to spend an increasing amount of time online and represent the future consumers of luxury fashion brands.
Hazan further explains: “Although the pandemic accelerated the shift of luxury brands to digital, they have never been the digital pioneers. In fact, Web2 concepts and applications have been far from the image of exclusivity and rarity that the industry conveys. of luxury and thus has In a way, luxury brands have prevented luxury businesses from standing out online, however, luxury brands must find a way to differentiate themselves online in the same way that they do. in its physical stores, transmitting its DNA in the online customer experience. In the current Web3 context, this opportunity exists to reconcile luxury and digital experience. For example, NFTs offer the possibility of reinventing the concepts of possession and rarity , while creating a strong sense of belonging to an exclusive community. As for the Metaverses, they are ideal spaces for personalization and creativity, which brands are beginning to take advantage of “.
The globalization of luxury goods
As cultures evolve and consumers in certain countries become wealthier, luxury fashion houses are exploring new markets. Two-thirds of the growth in the luxury goods sector between 2021 and 2025 will take place outside Europe Y the United States. In Porcelainmarket penetration of luxury perfumes is estimated at around 5%, compared to 42% in Europe and 50% in the United States. The Chinese luxury perfume market, which ranked 10th in the world in 2020, is estimated to be on track to become the second largest by 2025. Driven by population growth and increasing urbanization, it is expected to the Indian luxury market experiences strong growth and reach $3.7 billion by 2026. However, current environmental and geopolitical contexts are forcing luxury companies to reassess the risks of globalization and ensure that supply chains are agile enough to quickly adapt to an increasingly challenging environment. more uncertain.
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This report published by BCG and the Colbert Committee is based on approximately 40 interviews with executives of the Colbert Committee member brands, as well as industry experts (the full list is available in the report) and a survey of 2,000 people ( luxury customers and non-customers) in the United States, France, Germanythe United Kingdom, Italy, SpainY Swiss. The sample represents the populations of each in terms of age, gender, and income.
About Boston Consulting Group (BCG)
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About the Colbert Committee
Founded in 1954 by Jean Jacques GuerlainColbert Committee brings together 90 French luxury houses and 17 cultural institutions. Together they passionately promote, patiently transmit and sustainably develop French know-how and creation to instill a new sense of wonder. For more information, visit https://www.comitecolbert.com.
SOURCE Boston Consulting Group (BCG)