The following article is a takeover prepared by the students of the class « Sustainable Luxury » (part of the master « New Luxury & Art de Vivre » at Sciences Po, Paris / France) taught by UrbanMeister founder Mirela Orlovic. They share their views on how a future based on sustainability and circular economy after Covid19 will look like.

As we have all witnessed, talk of Covid-19 has dominated our news feeds for the past months. With death tolls rising, countries on lockdown, fear of an economic crash, and normal life grinding to a halt, the planet has had a rare chance to take a break. But what does this mean for the future of sustainability? Will the Covid-19 crisis be a turning point in sustainability or will we continue on as before?

Either way, Covid-19 will certainly change our lives forever. Luxury and fashion are affected by the pandemic as well, and how this sector responds is critical for the future of sustainability. Fashion weeks and events have been canceled and boutiques are closed across the world. This crisis may be the final push for sustainable practices in sourcing, supply chains, and production in response to changed consumer behaviors. No one knows what a post-Coronavirus society will look like, but we do know we will have a choice to change, and this may be our last opportunity to do so.  

As global carbon emissions dropped with travel and production completely halted, we saw the effects of mother nature slightly recovering. The Venice canals have clear water again and smog is lifting from cities around the world. China saw a 25% drop in carbon emissions – more than half the annual emissions of Great Britain – because of halted manufacturing. Consumers are reconsidering what they really need, and telecommuting is the new normal. However, because of fear over health and the economy are paramount at this moment, governments are putting aside green goals in favor of economic recovery. This is why influential companies in fashion and luxury must be leaders in a post-Coronavirus world in order to make the necessary innovations to ensure the planet’s survival. While the industry hits a low point, there is no better time than to radically adopt sustainable practices which would hopefully spark change in other industries as well.  

Coronavirus: Nasa images show China pollution clear amid slowdown. BBC. 29 February, 2020. 
https://www.bbc.com/news/world-asia-51691967 

Unraveling Supply Chains

The first point of influence by Covid-19 was observed at a supply chain level, a crucial facet for luxury and fashion that have large repercussions on sustainability, circular economy, and consumer behavior. At the beginning of the pandemic, 24 provincial governments in China ceased its manufacturing facilities, which accounted for 80% of China’s GDP. This was not only destructive to the Chinese economy, but had lasting consequences for interdependent entities all along the global supply chains. For example, cancelled orders by large companies are putting factory workers in Asia at risk, such as 10,000 workers who were recently laid off in Myanmar and $138 billion worth of cancelled orders in Bangladesh. This has allowed factory owners, as well as consumers, to re-evaluate social and environmental frameworks surrounding garment production such as labor inequalities, wage systems, and in general, the relationship between brands, factories, and its workers. Therefore, brands should not consider this crisis as a threat to their businesses, but as a chance to improve supply chain visibilities, generate clearer communication systems, and better position themselves in face of consumers whose behaviors are constantly changing. For example, Primark and Marks & Spencers have cancelled large portions of their orders to deal with unsold inventories before producing new ones, providing them a chance to re-evaluate their production system and heavy dependencies on China for its production. 

Consumer Behavior is Changing Means

With such an impact on the supply chain, Covid-19 has also shown an immense impact on luxury consumer behaviors. As WWD reports, post-coronavirus luxury industries will face “more conscious and attentive consumers” than ever before. There will be a significant decrease in willingness to travel, resulting in strong consequences on tourism. The risk of reinfection and sanitary measures will skew distribution online from traditional brick-and-mortar strategy, which is what sustainable brands have been doing to reduce their environmental impact of transportation such as Divinus and People Tree. Luxury brands have also joined the shift, such as Patek Philippe that allowed its retail partners to sell online for the first time. Only brands as strong as Chanel can hold out without e-commerce, however will this be something clients come to expect once this is all over? Clients will also have higher expectations for transparency as they leave self-centered consumption patterns and become conscious of surrounding environments and the impact of their purchases. Lastly, clients have been adapting a more local mindset. The anxiety and risk have distorted the “global” mindset that was commonplace before the pandemic. It will thus be crucial for luxury brands to develop digital connections to remain connected with its consumers and fully understand local needs as well as global needs to successfully adapt to the more conscious group of clients after the pandemic. 

Increasing Importance of Made In

Historically, Made In has been important when differentiating different product categories. Clients want Italian leather goods, Swiss Watches, French perfume, and German cars. These are countries with rich histories in their given expertise, however, with the current crisis, this could all change. We have gone from an incredibly connected world to nations retreating into themselves in a matter of a month. In February, we could hop on a plane and fly anywhere in the world. Now, our world is suddenly thrown behind closed borders and grounded flights. Even when Covid-19 is behind us, our world will be greatly changed. Tourism will be undoubtedly reduced as people will feel safer staying  in their home countries. Furthermore, these newly hesitant customers will be more attentive when it comes to sustainability, after witnessing this extreme event that exposes the fragility of the world. So clients will be even more ecologically conscious than ever before, expecting  brands to tighten up their supply chains and produce products locally to offer a more sustainable product with a completely transparent and local supply chain. With current convoluted supply chains, countries are completely reliant upon each other, so when a problem occurs in another country, the brand cannot do anything about it. In seeing the fragility of this relationship, brands may decide to localize supply and production. In this way, “Made In” will become more important than ever. With the global economies suffering, those who can spend money will want to support local economies by buying from their home country. Thus, more so than heritage, Made In will represent something totally different. Post-Covid, it will represent nationalistic pride and a sustainable solution.

Brand Extension: a Current Necessity for Some

Covid-19 is a particularly devastating blow to some in the luxury industry. The big, diversified players such as Chanel, Gucci, and Dior have wide enough product mixes that they will probably  survive in the economic and social aftermath of Coronavirus. This is not to say they will not reinvent themselves to adapt, however it will be an absolute necessity for some. For example, as we have discussed, global tourism is currently and will be taking a massive hit. No one is going anywhere anytime soon. This means that companies like Rimowa and Tumi, luxury and premium luggage companies, will need to reinvent to survive. This is also an opportunity for new, circular practices to emerge. For example, these luggage  companies could offer repairs of current luggage, or a luggage exchange program in which parts of suitcases are recycled to make new ones in the future when global tourism has recommenced. For now, these companies could offer more products that match their overall brand personality without relating to tourism. Perhaps Rimowa could look into making skateboards, as this could use leftover materials and matches with their “California Chic” vibe and plays into the current skateboarding trend. They could also introduce a line of home furnishings that really relate to their brand story, that bring the travel to your home, instead of creating products for the actual travel. More easily, Rimowa could make products for the workplace such as briefcases and shoulder bags. They could experiment with various sustainable fabrics to create these new products. Brand extension will not be easy for some but it is a requirement. 

A New Way of Slow Luxury?

Traditionally, the luxury industry has been composed of four collection launches per year that involved countless catwalks, photo shoots, press interviews, influencer collaborations, as well as client engagements. Although this system contributed to creating a dynamic, fast-paced, and active industry, this arrangement had recently been questioned for several reasons. The recent rise of skepticism is related to the environmental impact of frequent production of ready-to-wear collections, the productivity of employees, and the general inquiry regarding the abuse of the increasingly trend-driven nature of the fashion and luxury industries. For the brands, the COVID-19 crisis should be seen as an opportunity to re-evaluate this current arrangement, by questioning the sincere need of 4 collections per year and alternative ways they could adapt their collection launches. For example, Giorgio Armani recently expressed in an interview that the brand is considering having smaller collections and potentially skipping some collection launches. This should be aligned with the changing consumer behaviours and expectations, as a post COVID-19 clientele would potentially be less willing to spend on luxury goods and have greater demands regarding transparency and sustainability expectations from the brands. 

Influencers & COVID-19

With numerous brands halting their collection launches and operations in general, influencers were among the first fashion and luxury affiliated groups to be impacted. Companies such as Macy’s, T.J Maxx and Ulta Beauty temporarily suspended all sales commissions and marketing practices with influencers, explaining that there was a “realignment of marketing strategy” due to the current crisis. This phenomena not only poses a threat to the survival of influencers that depend on such sponsorships for their source of income, but it also exposes the fragile position of marketing strategies that are often first to be cut in times of crises. However, influencers may consider this as an opportunity to revise their sources of income to spread their sources, shifting to other activities such as launching their own collections. On the other hand, some influencers such as Angel Merino (@mac_daddy) reported to have sold 3 times more during an online collection launch than his daily records. Such success can be understood through the increased online audience engagement due to more customers staying at home, as well as the relevance of beauty and wellness product categories today with consumers paying increased attention to self-care at home. Nevertheless, influencers will need to carefully reexamine their position in the equation within the fashion and luxury industries, and also take this as an opportunity to clarify where their strengths may lie and develop distinct strategies to survive in the post-crisis society as well. 

A Time of Forced Reflection for Everyone

In view of the current situation that represents a shutting down of society, here’s a main question that arises with regards to the fashion and luxury industries: What is the impact of this epidemic on the future of the industries in question, especially in terms of sustainability? Certainly, being locked inside allows for some time of reflection, which can be termed as “putting consumption into quarantine” as well. Brands are therefore forced to slow down their activities, in certain occasions even stop their entire production processes. This unprecedented interruption of an industry that thrives on continuous production has certainly made room for a sense of empathy, connectedness, and responsibility. According to different industry experts expressing their opinions on sustainability impact, the challenges of pollution and climate change will now become furthermore reevaluated and prioritized.

A Time of Transition

The COVID-19 era could be strategically used as a time of transition for one of the most polluting industries on Earth, thus it can be indeed considered as an opportunity to evolve along the environmental standards. Because the Coronavirus has almost entirely halted many of the fashion industry and luxury brands activities, this could be used as a chance to start over with a clean slate. This is an opportunity to not only get closer to family and friends, but also to people and elements who are directly related to us although not consciously – the people who produce our garments in places like Asia, and of course the Earth which we tend to forget.

Ultimately, the cycle of fashion has been broken, because consumption behavior tends to change in times of emergency. Having factories and shops closed, runway shows cancelled, and production stopped might exacerbate the economic crisis that will follow, but this might serve as a way to think outside the box, be creative, and foster change for the better. Companies are starting to slowly rethink their business models and incorporate sustainability in their company culture, as this time calls for a deep reflection on the longevity of our natural resources, the importance of our planet, and the health of employees. 

Country Specific Reactions to the Crisis

In South Korea, there have been relatively less strict government restrictions on confinement thanks to early medical actions to tackle infections. Therefore, movements of people going outside, making purchases, and executing in general their daily lives have been impacted less by the COVID-19 crisis. However, a decrease in willingness to spend on luxury items can be observed easily. As Koreans practice social distancing, this means that consumers are encountering less instances where they need to dress up to go outside, consequently decreasing the need for new luxury items. However, the flow within the luxury industry has definitely been better compared to other markets around the globe, as luxury boutiques remain opened and distribution systems such as delivery services have rarely been impacted by the crisis.  

In France, there have been fairly strict confinement rules in place since March 17th. During confinement, all non-essential business are closed across the country, meaning all luxury boutiques are shut until further notice by government decree. This means that absolutely no business is happening in physical retail stores. This of course is a huge hit to the luxury industry, especially when one thinks about all of the tourists who would have been coming to France in the spring and summer time. E-commerce is still an option, however with the country’s economy in peril and the physical health and well-being of all being the number one priority, people are really not focused on buying luxury which will surely have an impact on the industry in France.

In Albania, the situation during the pandemics crisis is so far being well controlled, with strict government restrictions that prevent the population from leaving their homes for more than 1 hour per day in order to perform their essential activities. All non-essential businesses have been shut down for a month now, and no one is allowed to leave their homes or attend work after 1PM. The luxury industry is not well developed in Albania, thus one cannot say with certainty the impact of this crisis on the luxury industry in Albania, as fast fashion is more prevalent. However, the impact on retail business is very obvious when considering the shut down of all fashion stores and the halt of production in local factories. E-retail therefore is thriving at this time and home-delivery services for beauty products are performing in their highest capacity. This is certainly a new phenomenon in Albania, as the consumption activity is generally performed on brick-and-mortar establishments and physical stores. 

Conclusion: The future of luxury 

In conclusion, COVID-19 will have profound effects on all aspects of our lives, and this includes the luxury and fashion industries. Consumers will either go a little crazy after confinement and go on a spending spree, or they will be extra conscious about spending money during an economic crisis. Either way, hopefully people will be more concerned with their actions, having lived through this period of time in which we have all questioned what we really need to live. From the company side, one can hope that companies will reevaluate during this low point and replace existing, convoluted supply chains with more local, sustainable production. One can hope that companies will make the sustainable switch during this low point in order to make up for governments redirecting all funds towards emergency economic stimulus. We cannot be sure what will happen, however we can hope for the best possible outcome in sustainability from such dark times. This is our chance to reset and finally save the planet, but it is up to all of us to actually make the decision to do so.

To end, we’d like to share with you our own tips and tricks to stay healthy, sustainable, and circular during this pandemic. From subdividing your recyclable items to zero-waste face masks, watch our video to discover numerous ways to take action. Our tips and tricks are put together by students living at home in 3 different countries: Albania, South Korea, and France.

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