Yahoo Finance New McKinsey Survey Highlights Fashion’s Sustainability Conundrum
Consultancy firm McKinsey & Co. on Thursday released the result of a new survey, spotlighting British consumers’ perception of sustainability in the fashion and luxury space, and what conundrums need to be solved to move the industry forward ahead of the 2021 United Nations Climate Change Conference, or COP 26 in short, taking place this Sunday in Glasgow, Scotland.
Anita Balchandani, partner and head of apparel, fashion, and luxury for Europe, the Middle East and Africa at McKinsey, said, “We know that this industry is one of the biggest contributors to pollution and toxicity. We thought it would be just good to take stock of where customers are with respect to sustainability and what that actually means.”
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Some 25 percent of consumers in the U.K. make purchase decisions that are actively driven by sustainability considerations, the survey showed. Meanwhile, nearly 50 percent of the participants felt neutral or agnostic to the whole notion of sustainability, and another quarter said sustainability was never a consideration.
“What was really interesting when we started to unpick the importance of sustainability is that we saw two very different things going on. There are sustainability driving decisions at the point of purchase and sustainability at the end of the items’ life cycle,” Balchandani said.
The survey finds that sustainability considerations become even more important toward the end of a product’s life. Around 40 percent of the surveyed said they are actively looking for circular options, which range from donating to charity, the use of product repair, or resale.
“We believe it will be important for brands of all price points to deliver frictionless options for consumers to close the loop on circularity with their purchases,” Balchandani added.
When it comes to painting a picture of who are these sustainability seekers, the report said they are more likely to be urban Millennial women with above-average income. For the age segment 18 to 25, sustainability is also important, but the sample size in this particular dataset wasn’t brilliant. U.S. data on this age group shows that image and newness trumps sustainability considerations.
But overall, all consumers agree they are willing to pay a premium for durability and long-lasting products.
“Brands that can live up to these values have a place here in the fashion landscape. The lowest premium is at the end for organic and natural materials. We also see that the sustainability seekers are typically more likely to pay a higher premium for things such as whether it is a sustainable brand, whether it is treating workers responsibly,” Balchandani said. “We think there is an opportunity to think about what really matters to customers and how can companies address that particularly with segments that are willing to pay a premium for doing what’s right for the planet and its people.”
Interestingly, the research finds that there is actually no shared understanding among consumers of what sustainability means. A few concepts that typically related to the materials and to the environment scored higher awareness, such as biodiversity, greenhouse gas emissions, recyclability, and local sourcing. In comparison, toxicity, waste, animal welfare, plastic, and water usage ranked lower down in the consumer consideration set.
Age makes a difference on priority as well. The younger demographic, aged between 18 and 24, cares much more about greenhouse gas. For the 45-plus age group, they’re driving the swing toward the natural habitat dimension.
Faced with these sustainability conundrums, the report advises that companies need to be much more laser-sharp about what really matters and how they’re going to address the things that are the most important for their customers.
Balchandani said a brand’s website, alongside the tags on products, serves as the primary window around what drives and shapes consumer consensus around sustainability. “I think that puts quite a lot of onus and importance around how a brand can bring its sustainability merits to life to consumers, particularly through a digital lens,” she added.
She also pointed out that big companies are not doing enough to provide consumers with information about sustainability. The storytelling and actual actions are often “not fully joined up.”
“If you think about the world of clean beauty, for example, consumers broadly get the notion of what might be clean, but actually don’t really understand it at a granular level. I believe that there is much more to be done on communicating it. But what is obviously also important is that the communications are backed up with the merits,” Balchandani said.
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