Luxury’s Future: A Question of Trust


In the past two weeks, the Kering group (owners of Gucci) committed to full carbon neutrality across the board, the LVMH group announced new commitments to protect the environment and biodiversity, teenage Swedish activist Greta Thunberg spoke at the UN to say her generation would never forgive the previous one for not having done more for the planet, and author Dana Thomas spoke to the media about her latest book “Fashionopolis: The Price of Fast Fashion and the Future of Clothes,” focusing on environmental and labor issues in the industry.


What do all four have in common? The next generation of luxury shoppers will want to know about certain topics that have been overlooked by most brands. Can you tell me where your one-carat diamond on that beautiful ring of yours comes from? Unlikely. Do you know how the cotton in your shirt was grown? Impossible. Is your favorite brand still selling coats that use coyote fur or handbags with ostrich skin, and are you all right with that?


All consumer brands are fair game. A BBC report last week asked if Nutella was made with nuts picked by children. And The New York Times just published an article headlined “How fast fashion is destroying the planet.” Luxury won’t be immune. Actually, luxury will likely come under more pressure than others, given consumers pay a higher price for the goods. It is a given that the quality should be absolutely trustworthy.


The solution? There is no miracle, but we believe that these three approaches might help:


Embrace sustainability at the top


Issues of environmental, social and governance (ESG) are no longer simply buzzwords, as both consumers and investors are making decisions with these being key determining factors. ESG is a bit like digital and e-commerce: you can have a few specialists in some department tucked away, or you can make it part of your board agenda, your culture, and your mission statement. And if you are doing a good job, tell the world! There is no downside in sharing best practises in this field. Moreover, you cannot monitor what you cannot measure so giving your company and your employees measurable targets related to ESG matters is a prerequisite.


Control as much as possible


The ultimate luxury is to be able to fully control your sourcing. The motto of one of the leading spirits companies, Rémy Cointreau, is “terroir, people and time.”


“Terroir” is essentially a place that gives you absolute control over the provenance and full traceability of your goods. “People” is about accountability and responsibility. And “time” is the specific process of aging and blending done internally that enables the group to produce Louis XIII, an uber-luxury cognac with the eaux de vie, which is aged up to a century. Not everyone can control their supply chain like Rémy does, but being as close as possible to your suppliers and having them support your ESG mandates, is key.


Listen to your consumers


Over the past year, Burberry has stopped burning unsold products; Prada has gone fur-free, developing a collection based on recycled nylon ocean plastic waste; and Chanel has stopped using exotic skins. Product substitutes are popping up everywhere, from lab-grown diamonds, presumably less harmful and much cheaper than traditional mined diamonds, to pineapple leather, faux fur and more. Some will generate real interest and demand from consumers, while others will fall flat. Listen to your consumers. They will not necessarily know what they want, but they will tell you clearly what they don’t want.


About the Author: 

Erwan Rambourg is a managing director at HSBC in New York City and the co-head of Global Consumer & Retail Equity Research. He has been a top-ranked analyst covering the luxury and sporting goods sectors for the bank for the past 14 years. Rambourg joined HSBC in 2005 after working for eight years as a marketing manager in the luxury industry, notably for Richemont and LVMH. He is regularly featured in The Wall Street Journal and The Financial Times and appears on CNBC and Bloomberg. Rambourg grew up in New York and has lived and worked in Paris, London and Hong Kong.

SHARE
  • Facebook
  • Twitter
  • Pinterest
SIMILAR ARTICLES
How to Lose Followers
By Aarushi Saxena
Disingenuous endorsements is the number one reason why individuals unfollow influencers,...
By Aarushi Saxena
By Aarushi Saxena
Disingenuous endorsements is the number one reason why individuals unfollow influencers, according to Instagram creative firm Takumi and a study released last week by Marketing Charts, a hub for data, graphics, and research analysis. Based on a survey of 2,251 representatives in the UK, the US,...
Disingenuous endorsements is the number one reason why individuals unfollow influencers, according to Instagram creative firm Takumi and a study released last week by Marketing Charts, a hub for data, graphics, and research analysis. Based on a survey of 2,251 representatives in the UK, the US, and Germany, a significant crowd of 16- to 24-year-old consumers credit influencers for their “trendy...
The Kimono Reinvented
By Elisabeta Tudor
The kimono has always been an object of fascination. Even in Japan, where it is considered an...
By Elisabeta Tudor
By Elisabeta Tudor
The kimono has always been an object of fascination. Even in Japan, where it is considered an intangible cultural treasure, designers can’t help but put their hands on it to reinvent it and challenge traditional perception.Yoshiki Hayashi, an influential composer and musician-turned-designer, did...
The kimono has always been an object of fascination. Even in Japan, where it is considered an intangible cultural treasure, designers can’t help but put their hands on it to reinvent it and challenge traditional perception.Yoshiki Hayashi, an influential composer and musician-turned-designer, did just that during the latest week of runway shows in Tokyo. As of today, the best-selling artist –...
The Forgotten Side of Fashion
By Frédéric Martin-Bernard
In our current times that are defined by social media and selfies, it is not uncommon for fashion...
By Frédéric Martin-Bernard
By Frédéric Martin-Bernard
In our current times that are defined by social media and selfies, it is not uncommon for fashion designers to solely focus on the front sides of the garments they design. Is this a reflection of our current digitally-obsessed era, or does this tendency reveal a decline of true craftsmanship?The...
In our current times that are defined by social media and selfies, it is not uncommon for fashion designers to solely focus on the front sides of the garments they design. Is this a reflection of our current digitally-obsessed era, or does this tendency reveal a decline of true craftsmanship?The contrast was striking. On September 25th, Anrealage’s Creative Director Kunihiko Morinaga chose to...
Chloé and UNICEF to Empower Young Women
By NOWFASHION
The French luxury Maison under the creative direction of Natacha Ramsay-Levi and UNICEF just...
By NOWFASHION
The French luxury Maison under the creative direction of Natacha Ramsay-Levi and UNICEF just announced a new 3-year global partnership to advance gender equality through innovative tech solutions developed with and for adolescent girls.The partnership will include support to flagship UNICEF...
The French luxury Maison under the creative direction of Natacha Ramsay-Levi and UNICEF just announced a new 3-year global partnership to advance gender equality through innovative tech solutions developed with and for adolescent girls.The partnership will include support to flagship UNICEF programming models that equip adolescent girls and young women from Bolivia, Jordan, Morocco, Senegal,...
The Show Goes on in São Paulo
By Jorge Grimberg
“Brazilian creatives have gone through a whirlwind following the dramatic political scandals of...
By Jorge Grimberg
By Jorge Grimberg
“Brazilian creatives have gone through a whirlwind following the dramatic political scandals of the past few years and throughout this scenario, SPFW has become a tool to keep the system alive,” said Paulo Borges, the CEO and founder of São Paulo Fashion Week, which will close its 48th edition on...
“Brazilian creatives have gone through a whirlwind following the dramatic political scandals of the past few years and throughout this scenario, SPFW has become a tool to keep the system alive,” said Paulo Borges, the CEO and founder of São Paulo Fashion Week, which will close its 48th edition on Friday. A visionary ahead of his time, Borges started São Paulo Fashion Week 24 years ago. The...
Shanghai: Tech and Tribal Culture
By Jing Zhang
In a swish of Balenciaga jumpers, Gucci tees, and doll-like Chinese KOLs live streaming to their...
By Jing Zhang
In a swish of Balenciaga jumpers, Gucci tees, and doll-like Chinese KOLs live streaming to their fans on their phones, Shanghai Fashion Week Spring/Summer 2020 is coming to a close. It was a week of sunshine, rainstorms, and blustering winds, as buyers, media, and fashionistas traversed between...
In a swish of Balenciaga jumpers, Gucci tees, and doll-like Chinese KOLs live streaming to their fans on their phones, Shanghai Fashion Week Spring/Summer 2020 is coming to a close. It was a week of sunshine, rainstorms, and blustering winds, as buyers, media, and fashionistas traversed between Xintiandi (home to shows on the main official schedule) and the Labelhood runway platform – this time...
How Shanghai Could Change Fashion
By Gianluca Cantaro
When you are in Shanghai, the only thing you need to worry about is always keeping your phone...
By Gianluca Cantaro
By Gianluca Cantaro
When you are in Shanghai, the only thing you need to worry about is always keeping your phone charged and connected – as everything passes through these devices, and without it you are lost. Cash no longer circulates; the QR code pays everything. This, of course, offers more control on...
When you are in Shanghai, the only thing you need to worry about is always keeping your phone charged and connected – as everything passes through these devices, and without it you are lost. Cash no longer circulates; the QR code pays everything. This, of course, offers more control on transactions and, I guess, fewer tax evasion problems (at least for shopping). This is one aspect of the...
Lindbergh Film to Premiere in Milan
By Sofia Celeste
Milan’s Fashion Film Festival will unveil “Peter Lindbergh: Women’s Stories” at Milan’s Anteo...
By Sofia Celeste
Milan’s Fashion Film Festival will unveil “Peter Lindbergh: Women’s Stories” at Milan’s Anteo Cinema on November 10th.“Engaging and intimate, this film depicts the German photographer and features Naomi Campbell, [his wife] Astrid Lindbergh, and Helga Polzin,” organizers said Tuesday.The...
Milan’s Fashion Film Festival will unveil “Peter Lindbergh: Women’s Stories” at Milan’s Anteo Cinema on November 10th.“Engaging and intimate, this film depicts the German photographer and features Naomi Campbell, [his wife] Astrid Lindbergh, and Helga Polzin,” organizers said Tuesday.The Lindbergh documentary was directed by Jean-Michel Vecchiet, who also depicted the life of Jean-Michel...