2016 Predictions for the Luxury Industry: Sustainability and Innovation
In this report, we identify the most impactful events of 2015 and look forward to the biggest trends of 2016 in the world of luxury and sustainability.
2015 propelled the luxury industry forward when it comes to how they think about sustainability. The biggest shift, (and one of the most important ones to help accelerate changes from the top down), is the rise in demand from investment communities for sustainable business models. For years, investors have focused on a company’s financial performance and determined if purchasing stock was worth it based on if the company was profitable. Now, sustainable investing strategies are growing, as investors are realising that performance is intertwined in future social and environmental impact.
C-suites are starting to realise that in order to keep creating value, and accelerating growth they must invest in and improve how their company impacts society as a whole, and most importantly how they communicate that positive impact.
There is one group in particular that aligns with this concept more than any other. Millennials are almost three times as likely to look to work for a company because of its social and environmental practices(1).
And the demand from affluent millennials doesn’t stop at employment opportunities. 2015 saw millennials using their spending power more and more to vote for companies who positively impact society and the environment – in fact – they are twice as likely to buy from brands with strong management of environmental and social issues(2).
2015 was also the year governments and world leaders took action too. With the launch of the Sustainability Development Goals, COP 21, and the passing of the Modern Slavery Act, creating, maintaining and growing companies with a positive social and environmental impact will soon become a legal obligation.
All these changes have left luxury companies with no option but to improve as the potential for sales and stocks to plummet increases, and the hand of the law hangs over them.
With that in mind, we look forward to 2016 and the trends that will help luxury companies continue on their sustainability journey. New innovations, communication techniques and constant evaluations of how consumers view brands will allow companies to keep marching forward in the fight to stay at the top of their game in a world that demands socially and environmentally responsible brands more than ever before.
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