Sustainability is becoming a key consideration for luxury department-store buyers who are deciding which brands to stock, a new study commissioned by the governing body of the Italian fashion industry says.
Conducted by consultancy firm McKinsey & Company on behalf of Camera Nazionale della Moda Italiana, which unveiled the results at its third International Roundtable on Sustainability in Milan last Tuesday, the study polled 80 department-store buyers across 25 countries, including Barneys New York and Saks Fifth Avenue in the United States, Printemps in France, Takashimaya in Japan and Hyundai in South Korea. Collectively, the retailers surveyed are responsible for 50 billion euros ($56 billion) in annual purchases worldwide.
As a whole, buyers told McKinsey they expect to nearly double their total spending on sustainable products from 23 percent to 40 percent over the next five years. More than a quarter said they have withdrawn a brand from their assortments because of sustainability concerns such as environmental and labor issues or animal welfare.
Roughly 68 percent of respondents said they connect the idea of sustainability with “hard core” issues such as fabric provenance, manufacturing process, traceability and working conditions, versus “soft elements” like publicity, brand reputation and philanthropy.
Regarding consumers, buyers estimate that 70 percent of their clientele would shill out more for an item whose production doesn’t hurt the environment or exploit workers. “Consumers are willing to pay a premium if they perceive production fully respects workers’ welfare and has a clear ‘made in’ connotation,” one major European department-store buyer revealed.
McKinsey predicts that the number of brands investing in sustainable development will jump from 20 percent of the market today to 85 percent in 10 years. Likewise, it expects the proportion of department-store buyers who consider sustainability a purchase driver to soar from 25 percent today to 95 percent in a decade.
Antonio Achille, senior partner and global head of luxury at McKinsey, expressed “positive shock” over the results. “People understand that the consumer is reacting seriously” to sustainability, he said. “I think it’s a combination of brands finally recognizing that the consumer is important [now more than ever] and also that sustainability can help them differentiate from each other.”