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This article reviews recentreports of ESG (Environment, Social and Governance Issues) in some of theclothing industries of Europe.
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2.1 Deeper Luxury
A recent report by WWF UK (World Wild Life Fund) says that "Consumers"with increasing concerns with environmental and social issues are the greatestcultural shift of the 21st century. The report, "Deeper Luxury"points the way to how the clothing industry must conduct itself in order tosurvive.
The findings of WWF-UK's analysis of the environmental andsocial performance of the luxury goods sector is presented in the ground-breakingreport Deeper Luxury: quality and stylewhen the world matters. The analysis is that despite strongcommercial drivers for greater sustainability, luxury brands have been slow torecognise their responsibilities and opportunities.
In DeeperLuxury, Jem Bendell and Anthony Kleanthous present a clear visionand rationale for a more sustainable luxury industry. A compelling businesscase is presented for a new type of luxury whose deeper values are fullyembodied in the sourcing, manufacture, marketing and distribution of products and services. Authentic luxury brands are those that provide the greatest positivecontributions to all affected by their creation. They identify their consumersas having the means and motivation to respect both people and the planet,thereby contributing to a "
WWF-UK calls upon the luxury industry to bring to life a newdefinition of luxury, with deeper values expressed through social andenvironmental excellence. Their performance and progress on environmental,social and governance issues should be comprehensively measured and reported.
2.2 Green is Gold
Social responsibility is becoming an increasingly necessaryissue for business leaders to survive competition. So says a report by GoldmanSachs; "Green is Gold". This report shoes that companies which areconsidered to be leaders in implementing environmental, social and governance(ESG) policies to create sustained competitive advantage have outperformed thegeneral stock market by 25% since August 2005. 72% of those companiesoutperformed their competitors over the same period.
Ethical and production with reduced environmental impact inthe fashion sector is growing rapidly as a strong segment of this "EthicalConsumerism Market".
It has evolved from what was once a "Seasonal Trend"into a fundamental shift in thinking across all stakeholders in the fashionindustry.
It is changing consumer attitudes which are driving thisshift. As a result the market for ethically produced fashion is showing rapidgrowth. Spending on ethical clothing in the UK grew by 26% between 2004 and2005, from 23 million to 29 million and demand for more of the same hasincreased in 2006 and 2007.
2.3 A Gap for Ethics in the UK Clothing Market
Over half (23 million) of Britain's consumers think that ethical production of the clothes that they buy is very important. This results from 2007 research by the global market information company, TNS Worldpanel Fashion.
An overwhelming 76% of consumers feel that an end to child labour and garment sweat shops is a very important driver of ethical production. The second most important driver was "fairer prices for producers" (60%), closely followed by environmental damage (50%).
Elaine Giles, research executive at TNS Worldpanel Fashion states that:
"7.1 million Consumers say that ethical issues are important to them, but feel that availability of such items is poor. Retailers must not underestimate the importance of ethical credentials. Ethical Fashion is high on the consumer agenda".
2008 Ethical Fashion from Amana (UK)
Minna ethical fashion at the esthetical show, London fashion week (2008)
First photos: ethical fashion autumn/winter 08
Printed wrap dress from Sika. Will retail at around 89.
People Tree's black and purple Fairtrade collection designed by Bora Aksu
2.4 Consumer Sex and Age are Important
Ethical clothing is a hot topic in the industry at the moment, with launches from Marks and Spencer, Top Shop, ASOS and Oasis breaking new ground. Worldpanel Fashion has questioned 7,000 panel members on this topic to find the consumer view on this topic. We can help answer the following questions:
- How big is the market potential?
- What do consumers think ethical clothing is?
- How are clothing retailers perceived in an ethical context?
- How does ethical clothing fit with demand for lower prices?
- Do consumers think cheap = ethical?
Written by TNS
- 45% of consumers sceptical about ethical practices
- 28.4 million consumers cite ethics as an important factor in their fashion choices
August 17 2007, London, UK Nearly half (45%) of Britain's consumers do not believe the claims made by high street fashion stores about their ethical credentials, according to the latest findings from TNS Worldpanel Fashion.
Despite this scepticism towards retailers, TNS saw a significant rise in the number of shoppers appreciating the importance of ethical production in its annual ethical clothes report- some 28.4 million consumers felt ethics were an important factor in their choice of clothing and footwear, equivalent to 59% of the population.
Young consumers tend to be less cynical about retailer's ethical claims, with only 34% doubting the legitimacy of ethical practices. However, under 25's are also the least likely to buy ethical fashion; whilst a significant 54% claim it's important to them in theory, 6 in 10 admit they buy the clothes they want without caring how they are produced. Consumers aged over 55 are the most likely to consider ethical issues before purchasing, as well as being the most sceptical about claimed ethics, some 34% of older consumers will look at the country of origin before buying clothes.
Ethical issues are more critical to women than men: 63% of women say it's an important consideration compared to 54% of men. In addition, women are more likely to be attracted to stores that promote ethical clothing and 32% of women say there are clothing brands or retailers they would never buy for ethical reasons.
2.5 Europeans Wear Zara, Asians Prefer Prada
July 18, 2007- New markets offer a great deal of business potential. The basis for this is knowledge of the market concerned and its peculiarities. Under the heading "New Growth, New Markets", the 6th GfK Research Summit concentrated on the subject of market research in Brazil, Russia, India and China and the business opportunities offered by these countries. The conference, which took place on July 5 and 6, was attended by just under 300 marketing experts from all over the world.
More than 20 speakers, including several experts from GfK and a series of representatives from the major brand names of the industry and Dr. Dae Ryun Chang of Yonsei University in Korea, explored this year's subject, "New Growth, New Markets" from a variety of different aspects.
"Europeans wear Zara, Asians prefer Prada" is Dr. Chang's striking summary of the disparate brand preferences on both continents. In his lecture on brand management in Asia, the scientist illuminated the country-specific peculiarities and clearly showed that the region cannot be equated with China or Japan. Asia has now discarded its exotic image and developed into an ultra-modern continent, where top brands are mega-important and to a large extent determine the way in which people project themselves. For example, Korea is the fourth most important global market for luxury brand, Herms. Only the latest and the best are good enough for a new generation of brand consumers permanently on the lookout for the next product trend.
Consumers all over the world understand
Every year, GfK Custom Research carries out a number of surveys in Asia, Latin America, and Central and Eastern Europe. Several GfK experts specializing in the BRIC countries (Brazil, Russia, India and China) presented a series of remarkable market research studies carried out for major brand names in Barcelona. For example, Colgate-Palmolive India commissioned a survey on the lifestyles of the rural Indian population and which products Indians living outside the major conurbations are attracted to. Creative research methods, such as ethnographic market research, give insight into the daily lives of these individuals, their habits and consumer needs. Around 30% of Indians live in rural areas, where the lifestyles and circumstances are vastly different from those living in major towns and cities. Although the rural population attaches great importance to health, completely different products are used for body care than in towns and cities: for example, ash or tree roots are used instead of toothpaste, and "washing" seems to be synonymous with "scrubbing". Only those aware of these peculiarities can be successful in the market.
Beyond this, BMW, Coca Cola HBC, L'Oral and Motorola in conjunction with the GfK specialists gave conference delegates some insights into brand strategies for the BRIC markets. However, visitors attending the GfK Research Summit also learnt of some more specific details on Brazil, Russia, India and China and they were indeed rewarded by a more penetrating overview of the particular features which make all the difference between business success and failure in these countries, largely based on the Roper Reports for the regions.
2.6 Roper Reports
The Roper Reports are global consumer trend surveys carried out by GfK, which analyze and interpret virtually every aspect of living from both the qualitative and quantitative aspects. The eponymous Roper Reports were established by their founder Elmo Roper (1900-1971), an American pioneer in market research. There are four types of Roper Reports:
- Roper Reports US: 20,000 interviews per year carried out on a national basis
- Roper Reports Worldwide: a survey of approximately 31,000 consumers in over 30 countries, which also reflects the national and cultural differences and key markets in the various contexts
- Roper Youth Reports: a survey of eight to twelve and 13-17 year-old target groups
- Roper Green Gauge: a survey on consumer attitudes to the environment and environmental protection which answers the question of the degree to which these views impact on consumer purchasing decisions.
2.7 Italian Chic
Giorgio Armani, Gucci and Versace are the top three most coveted fashion brands, according to a global brand survey from ACNielsen.
20 February 2006: Milan, Italy
Italian fashion powerhouses, Giorgio Armani and Gucci are the worlds most coveted designer brands according to a global online survey of 21,000 consumers in 42 countries conducted by ACNielsen.
"Giorgio Armani and Gucci topped ACNielsen's Global 'Most Coveted Fashion Brands' ranking by scoring consistently high responses from online consumers in every part of the world - a remarkable testament to the power and universal appeal of these two luxury fashion brands," said Frank Martell, President and CEO, ACNielsen Europe
One in three consumers from the online world said they would purchase Giorgio Armani or Gucci if money was no object. The global online survey was conducted on the Internet in November 2005, asking 21,000 consumers in 42 markets across Europe, Asia Pacific, UAE, North and Latin America about their current and aspirational fashion brand purchasing.
While 12 percent of global Internet consumers today purchase Giorgio Armani and/or Gucci, 30 percent said they would buy these brands in the future if money was no object. "Giorgio Armani and Gucci clearly understand that strong brands make for profitable businesses. They are not merely selling fashion- they are selling an image- something consumers are willing to pay a premium for."
Giorgio Armani knew the importance of building and maintaining a strong brand when he started his business 35 years ago. Years later, Tom Ford, the designer associated with the resurrection of Gucci in the nineties, also recognized that creating a strong desirable brand would be paramount to Guccis success. "Both these brands embody attributes their consumers desire to be associated with."
"Regardless of where they live, when consumers in Italy, China or UAE purchase a Gucci bag or a Giorgio Armani suit they are prepared to pay a premium because they are buying the image the brand represents. In Armani's case, consumers know they are getting quality, sophistication and style - timeless values with global appeal. For Gucci, it's the combination of heritage, together with its sexy, modern appeal. They're different brand values from Armani, but with sustainable global appeal".
"Giorgio Armani and Gucci have achieved global reach and success because they consistently ensure the 'values' their designs represent will transcend cultures and age groups to appeal to consumers in every part of the world. Not an easy feat in the fickle fashion industry where trends and fads are the order of the day," added Martell.
Giorgio Armani and the revived Gucci label never stray too far from their core style and values. "Consumers who pay for something distinctly Armani and Gucci know that theyre investing in fashion that can be worn over several seasons or several years without dating."Consumers are investing in these brands' timelessness."
Giorgio Armani and Gucci- the "World's Most Coveted" Fashion Brands
Emerging markets tomorrow's fashion Meccas
The future survival of leading fashion houses depends on brand longevity and it is no surprise that designer fashion houses have been investing in their future by building commercial and brand presences in the emerging markets of Asia, UAE and Russia.
"Building, and more importantly, sustaining a strong and distinct brand image from the outset remains the most important challenge to any designer brand entering a new market," said Martell.
Global results from the ACNielsen survey reveal that Christian Dior -which has also successfully rebranded with a youthful image and is a favourite among the international young 'IT' crowd -has high commercial potential in UAE, Russia and Latin America.
Versace too, has very strong growth potential in the new emerging markets of China, Russia and India- as well as the USA, possibly because of its 'I have arrived' appeal combined with its 'glamorous life' celebrity image, particularly appealing to the upcoming nouveau riche. However, among more conservative consumers of the affluent Gulf States of UAE, the coveted brands which appeal to future consumers are Giorgio Armani and Chanel.
"Currently, UAE consumers are buying Dior, Armani and Yves Saint Laurent. Of these, only Giorgio Armani ranks highly for future aspirational purchase. If Dior and Yves Saint Laurent want to grow market share and attract a future generation of consumers in the UAE, they may want to invest more now in building their brands," observed Martell.
Future big spenders in India would like to fill their wardrobes with Gucci, G. Armani, LV and Dior, while in China, the most coveted aspirational brands are Chanel and Versace, followed by LV and G. Armani.
"Eleven percent of Indian's online consumers say they buy Armani now, but 38 percent would buy Armani if they could afford it. And while nine percent of online Indians currently buy Versace, 34 percent aspire to buying Versace in the future.
Armani Ethical Fashion (2008)
Versace Ethical Clothing (2008)
Fashion consumers remain loyal to home-grown designers
Not surprisingly, consumers in the world's fashion capitals (USA, Italy, France) remain loyal first and foremost to their own country designers. North American consumers remain loyal to top US designer Ralph Lauren, who topped the US online consumer's choice for current and most coveted fashion brand of the future. However, European labels most coveted for future purchase were Gucci and Giorgio Armani.
Historic French design houses, Yves Saint Laurent (despite now being owned by an Italian fashion conglomerate), Chanel, Dior and Hermes have the strongest following in France now -as well as for future purchase. Meanwhile, fashion conscious Italians clearly rank Giorgio Armani, Prada, Emporio Armani and Versace among their most coveted fashion brands now - as well as in the future.
The ACNielsen Online Consumer Confidence Survey, the largest twice-yearly global survey of its kind, is aimed to gauge consumers' current confidence levels, spending habits/intentions and current major concerns. The most recent wave of the survey took place last month (November 2005) and polled over 23,500 consumers -regular Internet users -in 42 markets in Europe, North and Latin America, Asia-Pacific region, Africa (Republic of South Africa) and the Middle East (UAE).
About ACNielsen
ACNielsen, a VNU business, is the world's leading marketing information provider. Offering services in more than 100 countries, the unit provides measurement and analysis of marketplace dynamics and consumer attitudes and behaviour. Clients rely on ACNielsen's market research, proprietary products, analytical tools and professional service to understand competitive performance, to uncover new opportunities and to raise the profitability of their marketing and sales campaigns.
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