Sustainability in Fashion and Luxury Industry
The fashion industry plays a major role in the global economy but comes with several downside social and environmental impacts. Consumers are increasingly aware of the serious and irreversible damages many industries caused to the environment, and are leaning more towards brands that are willing to take steps forward for a more sustainable future. The term “Sustainable Fashion” became therefore commonly used as a panacea.
According to IBM’s Institute for Business Value study in 2020, nearly six to ten consumers surveyed are willing to change their shopping habits in order to reduce their environmental impact and eight to ten respondents affirmed that sustainability is essential. Additionally, more than 70% of those consumers would pay on average 35% more for brands that are environmentally conscious.
Why is sustainability a valuable asset for all companies to integrate, and how can the luxury industry support the sustainable life-cycle of its luxury assets?
Consumers Care About Sustainability
Companies from all industries have always analysed their consumers’ behaviors in order to understand their intention in purchasing their products or services. As the landscape of the luxury industry is constantly changing, it became essential to integrate questions related to sustainability.
Although populations from all ages are showing interest in consuming more “sustainable”, the younger generations seem further concerned and willing to take additional moves following a positive shift in the industry.
As evidence of the increasing awareness of the perceived sustainability of a brand, we have for instance observed more and more social media influencers following the mantra “buy less, buy better”, spending on second-handed items, or better quality items that have a longer lifespan. During the past years, the fast fashion industry has particularly been at the center of critics for its products related and social issues — poor quality of products, waste of materials or unethical labour. Consumers have already started to change their consumption habits which is contributing to a more sustainable life-cycle of products and supporting a new economy in the fashion industry.
Sustainability at the Center of the Luxury Industry
Sustainability was defined by the UN as “meeting the needs of the present without compromising the ability of future generations to meet their own needs”. Environment, Social, and Governance are usually part of a common objective to reach sustainability and those questions are now mandatory to meet customers’ higher expectations and maintain a long-term business performance.
Many luxury brands are sharing the same vision: “a future for the luxury and fashion industry with fewer collections that last for longer” as mentioned by Federico Marchetti, Chairman and CEO of Yoox Net-a-Porter Group. More and more luxury brands are displaying their tailored sustainable philosophy. Cartier reportedly has an annual gold consumption of 10 tons, with more than 90% of it that is recycled. Chanel launched its first sustainability report back in 2018, with the declaration to ban the use of fur and to research innovative alternative materials. With higher quality of materials and authentic craftsmanship, luxury brands are capitalizing on clothing that lasts longer with a wider lifespan of the luxury assets, allowing consumers to effectively trade their assets from generation to generation. The adoption of sustainable practices at the very start from the production of a luxury product is key to fuel a virtuous circle in the luxury industry. Choosing sustainability in the luxury fashion industry is aiming to reduce at any cost the environmental footprint.
Second-hand markets are rising in popularity, with more attractive prices for products that may have been well conserved. With more affordable prices, it attracts a new market and comes as an alternative for consumers to boycott the overconsumption due to continuous new fashion trends. According to Boston Consulting Group, 70% of consumers in 2020 “like the sustainable aspect” of secondhand consumption, compared with the 62% in 2018. The second-hand markets are without any doubt quickly gaining momentum in the luxury market, and it will continue to be a rising trend.
Yet, how can we further elevate sustainability in the luxury industry? LuxFi provides an alternative and innovative solution for its users to actively play a role in Sustainable Fashion.
How Does LuxFi Achieves Sustainability?
As we mentioned, the lifecycle of a luxury item could be tremendous with higher quality of materials and better craftsmanship. LuxFi aims to support sustainability in the luxury industry by providing its users the possibility to easily trade idle luxury assets.
LuxFi is the first real-world asset-backed NFT Marketplace for luxury assets. LuxFi allows the tokenization and circulation of physical luxury assets with guarantee of authenticity and security of transactions in the process. Creating trust between buyers and sellers is essential in an environment plagued with common issues including counterfeiting, illiquidity and fluctuations in prices. In LuxFi’s platforms, luxury products are initially authenticated by profesional verifiers in the network so users are guaranteed to buy and be able to resell to third parties with authentic products. The ownership of each unique NFT can also be transferred safely to new buyers, and the product’s details and trading history is available for viewing even after being resold multiple times. LuxFi’s data intelligence system is collecting data from global offline and online channels in order to assess the right pricing of a luxury product, unlocking this way its real value on the market.
LuxFi is determined to improve not only the user’s experience on the platform, but also its solution in order to maintain a sustainable ecosystem in the luxury industry. Seeing how consumers value and prioritise sustainability when looking for a brand, we will keep reaching at newer heights, ensuring that we stick to our original philosophy — using blockchain and new technology to provide our users with an innovative platform supporting sustainability in the luxury industry.
About LuxFi
LuxFi is the world’s first asset-backed NFT marketplace for luxury assets, where people can buy, sell and invest in luxury assets using cryptocurrencies and traditional payments. We eliminate counterfeiting while minting an NFT on a multi-chain blockchain network, with a focus on luxury assets that hold value well and have a high resale value. Leveraging our big data intelligence system and unique algorithm for automated data collecting and data processing, the value of each NFT on our platform is backed by real-world data.
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