The continuously evolving fluctuations of 2020 in the luxury industry have had repercussions on almost every business, particularly in the West. Following successive pressures and consecutive – almost suffocating for the global economy – lockdowns, the market, facing 2021, tends to reshape and consolidate with a more “sensitive,” more careful approach from the main stakeholders and factors of the industry. Whether it’s a commitment to creating sustainable practices or the need for responsible action and addressing the impacts of COVID-19 on luxury entrepreneurship, the new reality operates indisputably catalytically and constitutes a declaration for the broader future of fashion.
Quality will prove its worth in the long run.
Beyond the sale of products, luxury houses “sell” essentially an identity that is an integral part of affluent consumers. We must clarify, however, that quality is repeatedly questioned.
Let’s not forget the recent upheaval created by Bottega Veneta’s new collection of bracelets/rings in “spiral cable” shape that we had previously encountered as a trend in 2016 and reached its peak in 2018. Due to social media, the collection gained momentum, and soon the $2,000 necklace became a topic of discussion and inspiration, as countless viral memes traveled across every online platform. Adding a humorous note to the story, many did not hesitate to further ridicule the new collection by comparing it to similar creations by the Vatements house, a pioneer of such strategies.
Quality, therefore, can indeed be a distinct, equally perceptible aspect that is increasingly being questioned. However, the major issue of wrong strategies does not start from here. It is beneficial for companies to understand that in the long run, they risk losing a significant – conscious – consumer base, and similar tactics in the near future will not only be a source of endless laughter but mainly of significant irreparable economic damage.
From Asia to Europe
Similarly, from an ethical standpoint, while the label “Made in Europe” or “Made in EU” seems synonymous with very high ethical standards, a series of research reports by the Clean Clothes Campaign have found a huge gap between the legal minimum wage and estimated living wages in European countries where Versace, Dolce & Gabbana, and Armani produce their collections. In other words, these specific brands pay wages that do not allow the worker to live a decent life.
Snapshot from a European textile factory
The most crucial issue in this case is that violations are no longer solely the concern of the Asian industry but tend to be even more prevalent in European countries such as Georgia, Bulgaria, Romania, and Turkey. Therefore, the exploitation of the “label” as an indication of justice and social responsibility is a myth. There is a significant gap between the legal minimum wages in Central, Eastern, and Southeastern Europe and the actual needs of a worker seeking adequate compensation and the fundamental right to dignity. Over 120,000 workers in countries like Serbia, Ukraine, Croatia, and Bulgaria work under deplorable and exhausting labor conditions. Especially amidst a pandemic, factory owners often compel workers to show up at the factory despite the risk of infecting themselves and their families.
We are talking about inhumane, adverse, and ruthless labor conditions with an untenable labor law that in 2021 undermines human dignity by promoting modern slavery in one of the world’s most powerful industries. Undoubtedly, the era of individual mobilization and consumer consciousness has arrived, significantly amplified in recent years at a brisk pace. The immediate adoption of necessary institutional measures is no longer just another “commonplace” burning issue but a necessary precondition for transitioning to the epoch of The New Normal and ethical fashion.
Therefore, we must clarify that the payment for luxury clothing and accessories is not related to higher wages for workers. In Italy, the head of a company was arrested in 2019 on charges of allegedly employing “dozens” of undocumented garment workers for luxury brands, including Armani, Saint Laurent, and Fendi. However, all brands associated with the scandal denied the existence of any contracts with this particular factory, leaving the course of developments unknown.
Carmen Ciobanu works from home in Croatia
Additionally, the New York Times revealed the situation in the luxury sector of Italy when it became known that seamstresses produce clothing from their homes for local factories without a contract or insurance. This reinforces the use of black money and deprives workers of the legal framework that protects them as employees. It is important to note that there is no legal minimum wage in Italy; a good wage is considered to be around 5-7 euros per hour. In extremely rare cases, a highly skilled worker may earn up to 8-10 euros per hour. However, home workers earn significantly less money, regardless of whether they deal with leather, embroidery, or other luxury products.
Intelligent marketing strategies with the wrong background
Moreover, 2020 presented many challenges for the luxury sector in fashion, one of the industries with significantly good performance. Most luxury companies are reassessing their operations and striving to ensure that their products are environmentally and ethically reliable. This replaces unsuitable materials by incorporating this work into the DNA of the brand, providing consumers with the opportunity to shop luxuriously and responsibly. However, many companies tend to focus more on finding sustainable solutions, overlooking the ethical impact that reflects them. Therefore, particular emphasis needs to be placed on the overall action of each respective company, not just on marketing strategies executed solely for appearance.
Some luxury houses, such as Stella McCartney, Gabriela Hearst, Gucci, among others, are making ambitious efforts to carve out a separate path. However, there are also actions from recognized luxury brands that cause contradictions in the consumer market, dividing it. An example is Lacoste’s “Save Our Species” series, which replaces the brand’s classic logo with images of endangered species while continuing to use materials such as leather and deer. This marketing strategy, on the contrary, provoked opposing reactions, as its value was canceled due to selective “sensitivity”.
The company Lacoste, in collaboration with the IUCN (International Union for Conservation of Nature), launched the collection “Save Our Species.”
A corresponding example is the case of the Gucci house, which, while making generous donations in campaigns to combat the pandemic, is simultaneously involved in a “scandal” of labor exploitation, forcing workers to work in unfavorable conditions in the face of COVID-19.
It is necessary to acknowledge every effort towards the evolution of the industry, while noting the necessary objections that we must take into account as strict evaluation criteria. The background of each enterprise is the primary criterion that will determine the course of the necessary marketing strategies to be adopted. Inadequate foundations are not capable of supporting and adapting to a new innovative activity plan that requires a strong background. Every initiative must be based on realistic assessments of feasible models capable of supporting the next strategic theoretical dynamic model.
There are numerous brands aiming to target the conscious consumer audience, constantly promoting gender equality, while the top positions in their hierarchy remain predominantly male-dominated. As paradoxical as it may sound, examples of correct strategies with the wrong background do not end here. With the help of examples, we can better understand the usefulness of a strong business model, ready to support and adopt any new strategic plan. The roots of a business are what will ultimately determine the smooth absorption of any future policy.
Since it became known – mainly due to the outbreak of the economic crisis due to COVID-19 – that brands should now focus more on their broader awareness of socio-political issues, every business has tended to hastily make strategic decisions without the necessary prerequisites.
The need for brands to participate in philanthropic campaigns created an arrogant atmosphere that in some cases exceeded all reason. In their effort to support NHS staff and volunteers, many companies took a commendable initiative by launching separate T-shirts to raise significant funds. The result was impressive. Almost every brand’s products were sold out in a very short period of time. However, the plot thickens. In collaboration with Supreme × Takashi Murakami, a discreet T-shirt called the “Supreme Covid 19 Relief Tee” was created, which was essentially a white T-shirt with the Supreme logo on the chest surrounded by a unique pattern. Although initially priced at a respectable $60, today it is sold in the Resale Network world at unjustifiable prices for what it essentially represents. In our most recent search, we found it priced at €400 on StockX, while on Grailed it reaches $850 in an offer that started at $1200.
Among the businesses that contributed to the philanthropic effort was Gucci. Here arises a reasonable question: How can you offer an extraordinary amount of 2 million euros to combat COVID-19 while simultaneously forcing your workers to labor continuously exposed to the virus, and moreover, without ensuring the necessary precautions? Another noteworthy strategy contradicts itself, creating significant concern among the conscious consumer base of the industry.
This crucial question reminds us that now, with the emergence of The New Normal, every brand must thoroughly examine every future strategy. Only in this way is substantial and long-term development feasible. Over time, similar tactics will cause irreparable damage to the invaluable engagement. Let’s not forget that we are addressing the most powerful consumer audience, Gen Z, and Millennials, characterized by intense, unprecedented, and peculiar distrust never before encountered in previous generations. They search, analyze, study, find, and disarm. Just as happened with the case of Alexi McCammond and her “resignation” from the position of editor-in-chief at Teen Vogue. The new generation has repeatedly shown that it does not forgive easily. We must acknowledge that without technological advancement, there would be no corresponding mass mobilization.
Historically, the primary condition for brands has always been to avoid commitment, integration, and promotion of socio-political ideas in their respective strategies. Today, not only from an ethical standpoint but especially from a marketing methodology perspective, such positioning becomes necessary. However, within the framework of “The New Normal,” a new threatening risk looms, excessive sensitivity, and involvement in public affairs. Each company must now deeply reconsider its business models, avoiding any mistakes or errors that could prove fatal in a new era of assuming responsibilities.
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