The Coresight Research team attended the inaugural ReMode two-day conference in Los Angeles, November 13 and 14. ReMode is focused on disruption and sustainability in the fashion industry, helping the industry navigate the new realities across the value chain via its four foundational pillars: ReThink, ReMake, ReInvest and ReMarket. More than 150 speakers, 80 innovative solution providers and more than 1,000 attendees came together to help build the future of the fashion industry.

Luxury’s Evolving Role in Sustainability

A number of luxury executives and consultants participated in ReMode to discuss the evolving role of the luxury industry in sustainability. It is natural the luxury sector leads and inspires the fashion industry in sustainability: Consumers pay more for and expect more from luxury products, and it is where sustainability should thrive, according to Eva Kruse, President and CEO of Global Fashion Agenda.

Sustainability has been integral to Kering’s business strategy for the past decade. Kering has 13 luxury houses of fashion, leather goods, jewelry and watches, including Gucci, Saint Laurent, Bottega Veneta and Balenciaga. Laurent Claquin, Head of Kering America, said “Kering regards sustainability as an opportunity, and a source of inspiration and innovation.” Kering is changing the way it designs luxury products by including nonfinancial criteria to create sustainable value for customers and society via its environmental profit and loss (EP&L) methodology.  And in the spirit of collaboration, Kering has open sourced its EP&L methodology to catalyze others. “Sustainable business practices allow us to be here together for the future,” Claquin commented.

Morten Lehmann, Global Fashion Agenda; Laurent Claquin, Kering Americas; Julie Gilhart, Parsons School of Design; Eva Kruse, Global Fashion Agenda; Simon Lock, Ordre
Source: Coresight Research

Simon Lock, Cofounder and CEO at Ordre, listed a number of ways the luxury fashion sector has and can become more mindful of its impact on the globe: using virtual online showrooms which reduces travel and lowers the carbon footprint of the industry; in colleges, new generations of designers are being taught to design in a more sustainable way; and blockchain has the potential to form a transparent record and database of a product’s journey, from raw materials to retail, allowing for a more qualified and informed purchase decision.

Julie Gilhart, a member of the Parsons School of Design Board of Governors, said, “Luxury has an obligation to lead the way with sustainability. We are setting trends in fashion, rooted in artisanry and quality, we should set this trend as well.” Claquin concurred, “(Sustainability) is a necessity and, for luxury, a duty, a double duty,” citing Gucci’s Equilibrium, Claquin said Kering has a culture of purpose balancing aesthetics and ethics, and that the brand and its people are committed agents of social and environmental change.

Recommerce Circularity

The RealReal has a solution to fashion’s built in obsolescence: Consign it for the next fashionista. One of the largest luxury consignment startups, The RealReal, is a retail choice that helps the planet by reducing the waste and environmental impact of the fashion industry. It is built on authenticating luxury products and eliminating the risk of counterfeit goods. Rati Levesque, Chief Merchant at The RealReal, said the company has sold over 8 million items since its 2011 launch.

The RealReal has multiple virtues, in addition to fostering a more sustainable industry, the company acts as an acquisition channel for many luxury brands providing entry to first-time value focused millennial buyers. Buyers and sellers are getting maximum value out of luxury goods. Even the luxury brands have taken notice and are beginning to work with The RealReal. Levesque mentioned a partnership with designer Stella McCartney to make a shared impact and advance their shared values; consignors at The RealReal earn a Stella McCartney gift card when they consign a Stella McCartney product. Together, they are extending the lifecycle of luxury items. Levesque said The RealReal will extend this type of partnership to additional luxury brands.

Levesque also spoke to the value of growing data at The RealReal, with insights into current macro and micro trends, by brand, region and age group. The company publishes an annual State of Luxury Resale Report replete with this best-selling brands and emerging designers in luxury resale. Gucci was in first place in terms of sales growth in the first half of 2018, in the August 2018 report, achieving 62% growth in women’s.

Customer Centricity

Greg Petro, Founder & CEO of First Insight spoke to using technology to build a customer-centric organization. Two areas in which retail executives are underestimating the impact of consumer behavior is smart speakers and product pricing. According to First Insight’s consumer and retail executive surveys, only 2% of retail executives acknowledge the impact of smart speakers, despite a 75% increase in the number of consumers who own smart speakers since December 2017, and that 59% of consumers with smart speakers are using them to research prices.

Regarding pricing, First Insight data reveal that 40% of consumers rank price as the most important factor in their purchase decisions, but only 20% of retail CEOs felt pricing was ranked as important.

Voice of the Customer analytics (VoC) was cited by 59% of executives as the most transformative technology for their business and 46% of retail leaders plan to invest in VoC in the next 12 months. That compares with 49% of executives that named predictive analytics as most transformative and 63% planning to invest in predictive analytics in the coming 12 months.

The Coresight Research team attended the first China International Import Expo held in Shanghai, November 5–10. The event attracted a total of 172 countries, regions and international organizations, more than 3,600 companies and more than 400,000 domestic and foreign buyers. In the keynote address, President Jinping Xi said China will import US$30 trillion worth of goods and US$10 trillion worth of services over the next 15 years.

The event was the platform to launch more than 5,000 new products, technologies and services. Deals totaling US$57.83 billion were struck at the event. At the Hongqiao Economic and Trade Forum, global business leaders discussed the latest global trade issues, while the National Pavilions in the Expo were full of scientific, technological and cultural demonstrations.

Companies including General Electric, DuPont, Mitsubishi Electric, Microsoft, Canon, Hitachi, Siemens, Dell and other Fortune 500 companies set up exhibition pavilions.

The Hongqiao Economic and Trade Forum at the Expo featured business leaders such as Bill Gates of Microsoft and Jack Ma of Alibaba as speakers.  International political and business leaders  came together to discuss major issues of global economics and trade. Below, we feature images from the event.

National Pavilions from Different Countries Showcase Their Culture and Industrial Advantages

A total of 81 national pavilions from 82 countries and three international organizations met to cover trade in goods, services, industrial clusters, investment, tourism and distinctive products.

Source: Coresight Research

International Corporations Showcase Their Latest Products

Companies exhibiting in the pavilions included more than 200 companies from Fortune 500 companies and leading firms in different industries.
Below, we feature photographs from the event.

Source: Coresight Research

The Coresight Research team attended Cosmoprof Asia 2018 in Hong Kong. Cosmoprof is the leading B2B beauty trade show in Asia and also offers a three-day education program in which industry experts share insights and information on key beauty industry trends.
Our team attended sessions led by industry experts and met brand owners to learn more about the newest trends and products. Here are our top takeaways from the first day.

The Global Beauty and Personal Care Market Is Seeing Solid Growth

Yiting Liu, Beauty and Fashion Analyst at research firm Euromonitor International, outlined that the global beauty and personal care industry has been growing at 5% compound annual growth rate since 2012, and estimated total retail sales will be $491billion for 2018. The category’s global retail sales value is forecast to grow to $616 billion by 2022. Asia Pacific has played a prominent role driving growth for the global beauty and personal care industry. Liu outlined that companies with natural product offerings enjoy higher CAGRs since 2012 than those without natural product lines.

Growing Awareness of “Green” Beauty and “Ethical Consumerism”

Consumers no longer focus only on price and quality, but also on the wider impact products bring to society and the environment. Liu defines“ethical consumerism” as product consumption that does no harm to the environment or society. Ethical consumerism is driving the evolution of “green beauty,” which has three aspects:

• “Green”and ethical positioning, for example, “free of animal testing” products or “100% recyclable” packaging.
• Getting products certified by a recognized industry body, for example, Halal certified.

Use of naturally or botanically derived ingredients, such as aloe and olive leaves.

Source: Coresight Research

Liu added that there is a growing trend of using three types of ingredients in beauty and personal care products:

• Locally sourced ingredients such as mangosteen from Thailand.
• Super food ingredients such as broccoli and blueberries, which add nutritional value of the products.
• Fermented ingredients such as fermented black sugar and yogurt.

Industry Players are Adopting Sustainability Measures to Up Their Game

Amarjit Sahota, Founder and President of Ecovia Intelligence, defined sustainability as companies meeting present demands without comprising the ability of future generations meeting their own. Using this definition, Sahota added that companies in general are adopting several types of sustainability measures:

• Adoption of natural ingredients as replacement to synthetic ingredients.
• Sustainable and ethical sourcing of natural and organic ingredients, for example from renewable sources.
• “Green” packaging such as plastic-free packaging.
• Waste management to reduce costs and increase efficiency, where some companies are adopting zero-waste initiatives.
• Social investment, for instance volunteering and charitable donations to third world countries.

Panelists from different companies shared their best practices in the sustainability space:

• Paolo Braguzzi, CEO of haircare company Davines, said Davines addresses sustainability by reducing plastics and packaging, getting its energy from 100% renewable sources, and measuring its own impact on the environment.
• Christina Ho, Marketing Manager of chemical company Croda, shared that Croda uses renewable ingredients in manufacturing sites. Ho added that Croda ensures no child labor is used, and that ingredients for skincare products are sourced from ethical suppliers. In addition, Croda employs third party assessment and requests each employee donate 1% of their time on social work.

Steven Ko, CEO and Founder of Hair O’Right International Corporation, said companies should see sustainability as a competitive edge rather than a corporate social responsibility (CSR) initiative. Furthermore, Hair O’Right uses recyclable products and have United Nations Sustainable Development Goals written clearly in the company’s CSR reports.

Source: Coresight Research

Source: Coresight Research