A profound analysis on Generation Less – 2019 Prediction Report (Part I)

Positive Luxury established in conjunction with the Bicester Village Shopping Collection®, Bentley and Euromonitor International a report on Generation Less 2019 – 2019 Prediction Report, which we present to you today as Newsletter item. We are proud to present the Report of Positive Luxury.

We at TextileFuture feel sure, that you will be confronted with some unexpected surprises and case histories of different branches of industries.

 We will publish the feature in two parts. This first part entails the foreword, the introduction, some prominent statements. It will further comment Fake News vs. Real News and that luxury and their consumers are changing in belief. Part II will offer more conclusions, remarks on the new Chinese Consumer and a number of Case studies, plus the final conclusions to be drawn of both parts.

Positive Luxury connects luxury consumers that care, with brands that share their values through the interactive Butterfly Mark. The Butterfly Mark offers transparency of a brand’s commitments to sustainability at the point-of-sale. Our pioneering approach uses technology to gather data insights about consumer behaviour toward sustainability.

Positive Luxury was founded in 2011 by Karen Hanton, MBE, founder of toptable.com, and Diana Verde Nieto, pioneering sustainability expert, honoured by the World Economic Forum as a Young Global Leader. Diana also sits on the Sustainable Development Goals Advisory Council.

Foreword

Less than a decade ago, executives rarely spoke of “purpose.” When they did spare a moment to consider why the point of their existence, their conclusion was typically simple: to maximise shareholder value. Today, however, purpose-driven business is the new normal for successful firms. More and more CEOs are taking a stand to say that their company is about more than profit – it’s about striving to fulfil a long-term purpose that benefits employees, customers, society and the planet – as well as shareholders.

Why are leading-edge companies casting aside the Milton Friedman-esque vision of business that puts short-term profit front and centre? Employees of all ages and backgrounds – not just millennials – want their work to be meaningful. Customers are seeking brands that inspire them. The planet is shuddering   as oceans rise and forests disappear. Society is demanding that companies be responsive to, and responsible for, more than just shareholders. The game is changing, and the old rules are changing with it.

What does this mean for business leaders? Most importantly, it means driving your firm’s purpose into the heart of everything that you do. Purpose is not some separate initiative on the side, such as philanthropy, CSR, PR, or HR. Your employees, your customers, your communities, and our planet expect businesses to behave in a different way, whether you have put something on your masthead or not. The zeitgeist has shifted. As companies are starting to wake up to embrace this reality, they are realising their customers have been wide awake and hard at work for hours.

Some firms are starting to get with the program. For EY Beacon Institute’s recent How can purpose reveal a path through disruption? study, we spoke with nearly 1500 senior executives and business leaders from around the world. A volatile and uncertain economic and geopolitical landscape has prompted a fundamental rethink within many companies about the how and why of their business.  Just 40 % of them define their purpose in a more expansive, human-centred, and socially-engaged way. But, the direction of travel is clear: two-thirds of firms are profoundly rethinking their purpose, and more than half of those are moving towards a definition that goes beyond just shareholder returns.

Our research shows that these purpose- driven companies are better at attracting and retaining talent, building customer loyalty, spurring innovation, navigating disruption and yes, making a profit – all key for surviving and thriving in today’s volatile world. Employees and consumers will make their voices heard whether or not they’re asked. But they are looking for progress towards purpose, not perfection. They will respect executives who are authentic and candid about the distance their organisations have yet to go to truly live their purpose.

Valerie G. Keller, Global Lead and EY Clobal Markets Executive Director, EY Beacon Institute 

Valerie Keller is a seasoned  executive  and advisor with a deep commitment to purpose-driven  transformation.   She   has a breadth of experience leading  growth  via strategic transformations with wide range of global organisations and has knowledge in strategic planning, enterprise transformation, leadership, organisational development and cultural transformation. Prior to joiningEY, Valerie facilitated corporate advisory services, working with a select group of top-tier multinational corporations undertaking strategic  transformations. She has guided large-scale transformation projects across government agencies, businesses and NGOs and facilitated public- private partnerships. 

In an era of rapid globalization and dramatic disruption, the expectations of business have changed. That means executives are on a purpose journey – whether they like it or not. Rather than denying or dismissing it, smart executives will channel that invigorating energy and engagement into everything their organisations do. By transforming employees and consumers into a driving force for purpose, executives can boost profits, help their people find fulfilment in their work and redefine business as a force for good in the 21st century.

Now that companies are armed with the impetus and the business case to transform around purpose, the ‘why’ is no longer up for debate. The only question is ‘how.’ That is where this report comes in. Positive Luxury’s 2019 Predictions Report – “Generation Less” – tackles how to drive purpose throughout the organisation, empowering and engaging employees and consumers at every level.

For too long, we have been obsessed with ‘more,’ whether more stuff, more profit, or more growth. Bigger is better, right? That is the game, we have been playing. Today humanity is charting a better path forward, a path in which we seek money and meaning, profit and purpose. That is a huge opportunity. But, business leaders who don’t see these fundamental norms shifting beneath their feet are likely to lose their balance and fall behind. There’s a movement underway, and ‘Generation Less’ is in the vanguard.

Some firms are starting to get with the program. For EY Beacon Institute’s recent How can purpose reveal a path through disruption? study, we spoke with nearly 1,500 senior executives and business leaders from around the world. A volatile and uncertain economic and geopolitical landscape has prompted a fundamental rethink within many companies about the how and why of their  business.  Just 40 percent of them define their purpose in a more expansive, human-centered, and socially-engaged way. But the direction of travel is clear: two-thirds of firms are profoundly rethinking their purpose, and more than half of those are moving towards a definition that goes beyond just shareholder returns.

Our research shows that these purpose- driven companies are better at attracting and retaining talent, building customer loyalty, spurring innovation, navigating disruption and yes, making a profit – all key for surviving and thriving in today’s volatile world. Employees and consumers will make their voices heard whether or not they’re asked. But they are looking for progress towards purpose, not perfection. They will respect executives who are authentic and candid about the distance their organisations have yet to go to truly live their purpose.

Introduction

The world is quickly changing with massive implications for business strategy and value creation. New energy systems, emerging technologies, digital transformation, rapidly  changing demographics, and rising global geopolitical uncertainty are shifting the context of how business operates today and in the future.

The two most disruptive conditions for business, particularly within the luxury sector, are climate change, and the attraction and retention of both talent and consumers.

The global challenge of climate change has led companies to invest in innovation, whether on materials or new business models, in order to increase their climate risk resiliency. Brands who confront this challenge are provided with the opportunity to change the narrative and drive disruption from the inside out. A business can evolve from “being a company to being part of a movement by unifying internal and external stakeholders to unlock their goodwill” states Niall Dunne, CEO Polymateria, a start-up developing a new standard on biodegradable plastics.1

To confront the challenges with attracting and retaining talent, brands need to appeal to a new ageless demographic that is united by a values- driven mindset. We call it “Generation Less.”

The Generation Less mindset represents how our world has changed and the set of values that all ages have adopted as a result. Generation Less values  experiences, convenience, personalisation, work-life balance and are environmentally and socially conscious.

Generation Less express themselves as “good” by making discerning and ethical choices. They are buying less but buying better. Equally, people are choosing to work for companies that can unequivocally prove their positive impact on our world.

In 2019, the notion of Quality over Quantity – Less is more – will be reigning ideology

Mark Ferguson, a founding partner of sustainable investment management firm Generation Investment Management, along with former US Vice President Al Gore and David Blood, takes this sentiment one step further. He advises businesses to “replace marketing budget with innovative ‘sustainability’ budgets that can prove the authenticity of the company values and can be communicated instead of investing on traditional advertising.2

2017 was dominated by the idea of truth, 2018 was defined by influence through emotion. In 2019, the notion of quality over quantity – less is more – will be the reigning ideology.

As such, brands need to ask themselves what they stand for, and, what is their purpose beyond profit, because that is what their customers are asking. Consumers want more meaning in their lives and they will invest in brands that help them achieve their aspiration.

Since Positive Luxury was founded in 2011, the company has championed business as a force for good. Positive Luxury’s 2019 Predictions Report – Generation Less – dissects key industry trends, and offers insights into how companies are innovating with great success in order to navigate the turbulent, but unavoidable waters of change.

A look back to 2018

Fake News Continues

An unprecedented study by MIT scientists looking at the way in which news spreads across the internet, reveals that falsehood outperforms truth.3 About 126,000 stories were spread by approximately 3 million people on Twitter and ‘fake news’ was found to reach more people and spread more rapidly than accurate news stories.4

With consideration of the thousands of content platforms being shared and the 4.2 million Internet users globally, how do we know who to listen to?5 Is it fake news or just confusing news? The oversaturation makes it impossible to discern what is ‘right.’

An inevitable consequence of this is a growing distrust in institutions. Consumers are sceptical of companies and their motives, yet at the same time consumers are seeking ways to reinforce their belief system and their connectivity to a community. People are looking for businesses to trust, offering companies the opportunity to stand out and become thought leaders as we will discuss further.

The World has Changed: This is the Real News

While fake news maintains its allure, real news is actually making changes.

The Intergovernmental Panel on Climate Change (IPCC) published a startling new report in October 2018 which brought a sense of urgency to the global climate conversation. The report assessed the impacts of global warming of 1.5 degrees Celsius in the context of strengthening the international  response to the threat of climate change.6 Its landmark findings assert that to limit warming to 1.5 degrees Celsius would require “rapid, far- reaching and unprecedented changes in all aspects of society.”7 As the authors of the report make clear, these necessary changes must happen within the next twelve years to limit the devastating effects of global warming.

Global economic losses from natural disasters and man-made catastrophes reached an all time high this past year, causing insurance companies ,who carry financial burdens from climate change, to become an unlikely ally. The world’s second-largest reinsurer Swiss Re announced that it will stop insuring companies with more than 30 % exposure to coal across all lines of business.8

An unlikely voice in the climate conversation is China. As the world’s largest importer of waste, China took a meaningful stand in 2018 and banned 24 types of waste including plastics and textiles entering their shores. This was a wake-up call for the rest of the world, mainly US, Europe, and Japan, to address their waste management efforts.

On this side of the shores, while Brexit negotiations continue and the future of the UK and Europe’s relationship is still unknown, there is one outcome that is certain: “The Brussels effect,” a term coined by Anu Bradford, professor of law at Columbia Law School.9

‘The Brussels effect’ impacts not only UK companies, but the global luxury sector.  The regulations set by the European Union permeate into economic lives beyond Europe, ultimately setting globalised standards across food, beauty, fashion etc. “EU regulations have a tangible impact on the everyday lives of citizens around the world. Few Americans are aware that EU regulations determine the makeup they apply in the morning, the cereal they eat for breakfast, the software they use on their computer, and the privacy settings they adjust on their Facebook page, ”10 Bradford explains. Regardless of the Brexit deal outcomes, the UK and any other countries that want to continue engaging with the European market will need to meet the highest quality standards of production as imposed by the EU.

Bradford also acknowledges the growing focus on the Chinese market, and, how China is responding by ramping up their rules to emulate those of the EU. As e-commerce continues to grow as a strategic business strategy for brands, companies who want to sell their products internationally must be deemed fit for sale by the highest global standards which, today, is set by the EU.

In Europe and the US, concerns about privacy  and the ownership of personal data took centre stage in 2018, as seen in Facebook’s Cambridge Analytica scandal, the Marriott International hack affecting 500 million of their guests, and fitness app Polar exposing information on U.S. military and security personnel. With the implementation of the EU’s General Data Protection Regulation (GDPR), businesses around the world witnessed the financial and sociocultural effects of legislative action on data security.

New privacy regulations were set out to ensure that companies were using, processing and managing personal information responsibly and ethically, particularly in the digital space. While the legislation promised hefty fines if data laws were breached, the positive outlook was that businesses could leverage GDPR to build consumer trust and loyalty. In an era of public scepticism for establishments, regulations for transparency in business ultimately favour the public and push businesses to go above and beyond due diligence.

“2018 came to a gloomy conclusion with two reports that definitively, once and for all, called time on today’s dominant model of production and consumption. The first was the report from the intergovernmental panel on climate change, warning world leaders that we have no more than 15 years to avoid the risk of runaway climate change. The second, the living planet report, highlighted the still devastating impacts of economic development on the natural world, with 60 % of our precious wildlife lost in the last 40 years. Ever since the earth summit in 1992, companies have been exploring ways of ‘doing less harm’,and that has at least slowed the pace of destruction. Twenty-five years on, however, it’s now clear that this kind of corporate commitment is completely inadequate, and young people are becoming more and more outspoken in their demand that all brands, particularly in the luxury market, raise their game just as fast as possible. 11

Jonathon Porritt, Environmentalist, Author and Founder, Forum for the Future

Luxury is still leading the way

For the first time in 108 years, Chanel released a Report to Society that revealed details of their operation, from financial results to how they are addressing sustainability issues. The French house had been traditionally hush-hush about its business practices – however, their Report to Society illustrates the increasing expectations for transparency in business, even for heritage luxury giants.

Often luxury brands are extremely private about their business operations in an effort to protect intellectual property and add a sense of mystique around the brand.12 With stakeholders demanding more accountability, fashion houses are fighting the circulation of false or misleading information and setting standards of trust by taking the matter of transparency into their own hands.

In December 2018 Chanel made two landmark decisions. The first of which was banning the use of exotic skins in the interest of more responsible and ethical sourcing.

The second was becoming an investor in Finnish biodegradable plastic  developer, Sulapac. “Chanel is definitely one of the forerunners in the luxury segment as they want to invest on latest sustainable material and technology innovations, our mission to save  this world from the plastic waste just became a big step closer.” Suvi Haimi Co-Founder and CEO Sulapac.13

Louis Vuitton is another leader in the luxury industry that is openly communicating about their aims to reduce their environmental footprint. As the newest member of the Positive Luxury family, they have created a waste reduction and recycling programme for materials including leather, canvas, textiles, and gold plated metallics. Moreover, the luxury house is investing heavily in technology to assist with the reduction of energy consumption throughout their operations. They have achieved this by choosing the most efficient air cooling and heating systems and by the installation of solar panels and LED lighting across all built areas. Since COP21, they have also initiated a global programme to switch the lights off in the majority of stores from midnight to 7 am.

As Louis Vuitton and Chanel led the way, 2018 saw the movement towards ‘less’ take hold. The British Fashion Council announced that London Fashion Week September 2018 was to be entirely fur-free. Gucci, Calvin Klein, Michael Kors, and Diane Von Furstenberg were a few of the brands that decided to ban fur from their collections in 2018. Sandra Campos, CEO Diane Von Furstenberg, stated the brand is “committed to supporting the shift to a more ethical and sustainable fashion industry by providing the consumer with innovative and sophisticated alternatives.”14

This rapid shift towards less is not exclusive to the luxury lifestyle. BBC One aired Stacey Dooley Investigates:  Fashion’s Dirty Secret,  a documentary concerning the social and environmental impacts of fast fashion. The documentary exposed alarming findings that instigated mainstream discussions about an industry that is “costing people their livelihoods, costing millions of people their health — in fact, it’s costing The Earth.”15

The Chair of the Environmental Audit Committee from UK Parliament wrote letters to the UK’s ten leading fashion retailers, including Marks & Spencer and the Arcadia Group, asking them to submit evidence of the steps they are taking to reduce the environmental and social impact of their operations. This is a call to the fashion industry to act more responsibly in the way they design, produce and discard clothes as it is today the second most polluting industry in the world.

Belief-Driven Purchasing: The New Luxury?

Belief-driven buying is now the status quo. While NGOs are traditionally expected to be the institutions righting  societal wrongs, calling out bad practices, and building a sense of community – this position of ‘moral authority’ is ripe for businesses to embrace. People are considering a brand’s principles as much as its products, and brands have no option but to take a stand.16

In today’s climate, businesses are more trusted by the public than the government. Moreover, there is a growing expectation for businesses to drive societal change. 64 % of consumers believe that CEOs should be the figures pioneering change, rather than waiting for the government to take legislative action.17

The consumer wields their power of purchase to dictate the conversation. People want to be recognised for the social, economic and environmental issues they align themselves with and use their support for brands to outwardly display their personal values. In an age of activism where younger generations are increasingly engaged in politics, consumers understand that they can use their wallet to vote, leading to “birth of Brand Democracy.”

Nearly two-thirds of consumers now choose, switch to or boycott a brand based on its stand on societal or environmental issues, up from 51 % in 2017.18

Generation Less associate themselves with brands that say something about who they are and where they fit in, regardless of their age. In order for a brand to resonate with people on that level, they need to move away from how to ‘win’ customers to how to ‘woo’ them, meeting them in the context of being a service to their own needs”19

The notes, acknowledgments and photo reference will be following in Part II

www.positiveluxury.com

Newsletter of last week:

Powerful pricing: The next frontier in apparel and fashion advanced analytics https://textile-future.com/?p=19301

Here is the Review of last week’s NEWS. For your convenience just click on the feature for fast access

Antioxidants

BASF opens first phase of the new antioxidants manufacturing plant in Shanghai, China https://textile-future.com/?p=19417

Airbags

Porcher Sport elevate safety with new ultra-light avalanche airbag fabric https://textile-future.com/?p=19387

Aviation

GE Subsidiary AP&C purchased new Land, GE Aviation Helping Airbus 3D Print Parts for RACER Aircraft https://textile-future.com/?p=19335 

Awards

BASF recognized as global leader in corporate climate action and water security https://textile-future.com/?p=19420

Companies

Nike’s big bet on connected shoes https://textile-future.com/?p=19119

House of Fraser sales crash 60 % in lead-up to Christmas https://textile-future.com/?p=19345

Coats sells North America Crafts business https://textile-future.com/archives/19352

Autoneum’s 2018 financial year –  Revenue growth significantly above market https://textile-future.com/?p=19400

Comfortable Clothing

Roots and Air Canada partner to mark International Sweatpants Day on board Air Canada’s longest International Flight https://textile-future.com/?p=19378

Cotton

Bremen Cotton Exchange at the Promotex in Düsseldorf, Germany https://textile-future.com/?p=19434

Denim

J. Crew to turn old jeans into building materialshttps://textile-future.com/?p=19019

Events

Texprocess honours new textile-processing ideas https://textile-future.com/?p=19194

Techtextil Innovation Award 2019: now open for entries https://textile-future.com/?p=19196 

ISPO 2019: Sympatex to hold a plogging event in the centre of Munich as official sponsor of the ISPO Sports Week https://textile-future.com/?p=19198  

Stoll presents fully-automated production process at ISPO https://textile-future.com/?p=19239

Vendors left uncomfortable by slow sales of Comfortable Clothing https://textile-future.com/?p=19373  

Snow Angel presents Eastman Naia™-based collection at Outdoor Retailer https://textile-future.com/?p=19452

Unifi introduces new sustainable offerings at 2019 Outdoor Retailer Snow Show https://textile-future.com/?p=19469

Smartwool launches into New Year with World Cup Champion Mikaela Shiffrin https://textile-future.com/?p=19473

Flylow Gear unveils Stormproof/Breathable™ OmniBloq™ technology at 2019 Outdoor Retailer + Snow Show https://textile-future.com/?p=19476  

Fashion

Gardeur’s Collection Report MICHÈLE Winter 2019/20 https://textile-future.com/?p=19012

Arvind Fashions looks to double revenue in 5 years https://textile-future.com/?p=19116

Express partners with Olivia Culpo on Exclusive Collection https://textile-future.com/?p=19126

Rihanna said readying Luxury House with LVMH https://textile-future.com/?p=19342

Joules posts double-digit rise in half-year profits & sales https://textile-future.com/?p=19426

India

India – Textile and Clothing Industry with potential of modernisation https://textile-future.com/?p=19441 

Innovation

Combining chopped Carbon Fibre with ABS has Surprising Effect on 3D Printed Parts https://textile-future.com/?p=18535

Concrete proposals for tomorrow’s composites from HOFZET® and Vandewiele https://textile-future.com/?p=19408

Partnership

Covestro and Haier plan digitalization joint laboratory https://textile-future.com/?p=19383

BASF partners with Pantone® Color Institute to create a shade collection inspired by PANTONE 16-1546 Living Coral, Color of the Year 2019 https://textile-future.com/?p=19431

JEC Group and EuCIA join forces to promote the composites industry https://textile-future.com/?p=19448

Oerlikon Manmade Fibers segment becomes ADAMOS network partner https://textile-future.com/?p=19456

Personalities

Mickey Drexler is severing his last ties with J.Crew at one of the most difficult times in its history https://textile-future.com/?p=19356

Kappahls new President and CEO will take up duties in April 2019 https://textile-future.com/?p=19356

Airopack Technology Group – additional change in the Board of Directors https://textile-future.com/?p=19356

Under Armour names Tchernavia Rocker as Chief People and Culture Officer  https://textile-future.com/?p=19356

PET       

The unpredictability of PET raised its head again in 2018 https://textile-future.com/?p=19212

Printing

March 3DPrint.com Crash Courses: Sign up now with the Early Bird Rate https://textile-future.com/?p=19365

Ricoh’s inkjet innovation reaches new heights at Hunkeler Innovationdays 2019 https://textile-future.com/?p=19314

Robots

India´s robot sales surged by 30 % https://textile-future.com/?p=19326

Spacewear

Under Armour to design ‘spacewear’ for Virgin Galactic’s future astronauts https://textile-future.com/?p=19464

Strategy

Chico’s FAS, Inc. announces actions to further advance Omnichannel Strategy and increase operating effectiveness https://textile-future.com/?p=19022

Success Story

Heat-recovery and exhaust air pollution control at Getzner AG in Bludenz, Austria https://textile-future.com/?p=19404

Sustainability

Unifi introduces new sustainable offerings at 2019 Outdoor Retailer Snow Show https://textile-future.com/?p=19469

Webinar

Live Webinar on Excel Pivot Tables (January 28, 2019) https://textile-future.com/?p=19323