Unmask Opportunities in Luxury Fashion

In its report titled 'Luxury Outlook 2022', BCG (Boston Consulting Group) conducted more than 40 interviews with members of Comité Colbert (an association to promote the concept of luxury), luxury fashion house directors and industry experts. The result: Identification of five key challenges and opportunities that the luxury fashion industry can expect in the future. By analysing each of these elements in depth, BCG strives to determine how the luxury industry can become a bold pioneer of change in the years to come.

The 'Luxury Outlook 2022' report by BCG predicts that post the pandemic, luxury fashion houses will see a return to pre-COVID levels and a growth of 6 per cent between 2022 and 2026. However, for luxury brands, this will come with an attached responsibility. Consumers view luxury as being defined by quality, craftsmanship and creativity. They also believe that they bear certain social and environmental responsibility. Hence, the luxury industry is seeing a shift across activities. For example, six out of ten consumers say that they incorporate sustainable development into their purchasing decision, almost half are interested in the concept of a virtual store, and 80 per cent believe that luxury fashion houses should commit to product life-cycle management beyond production and sales,' the report reveals.

Through more than 40 interviews with members of Comité Colbert, luxury fashion house directors and industry experts, BCG was able to identify five opportunities and challenges for the luxury industry, and further analysed each issue in the hope to demonstrate how the industry could bring a change. Its 'Luxury Outlook 2022' report lists these as:

• Resources and production

• Life cycle

• Customer relationship

• Responsibility

• Globalisation

Resources and production

BCG says that in the face of the climate emergency, there is existing pressure on physical resources. The imbalance between the need for raw materials and their availability has grown despite efforts to increase demand planning and optimise production, it states, adding that this can be tackled by collaboration among industry players where they can initiate and develop robust standards to deal with environmental challenges at every level. There's also a need to improve traceability in supply chain and a need to accelerate innovation.