Earlier this year, Chopard announced that it will now only use ethically-sourced gold for their products, becoming the first brands to make such a commitment, although striving to be more ethical is nothing new in the fashion and luxury industries. Consumers are increasingly paying attention to where a product comes from, preferring to buy second-hand over new. Since 2013, the global market for second-hand watches has been continuously growing by around 5% each year driving the vintage trend.
Consumer behaviour has changed drastically in the past decade, in particular after the global economic crisis of 2008. Indeed, 2009 study by Booz & Company analysed the impact of the recession on young people and confirmed the birth of a “new consumer”, a rational and frugal spender. The effects of the financial crisis have reached the luxury sector wherein people more than ever refuse to buy at higher price points unless they clearly perceive a qualitative advantage. A 2017 Boston Consulting Group study showed that 100% of the study’s interviewees perceived a price-to-value discrepancy. It showed that among them 8 in 10 are disappointed by the fact that a higher price does not necessarily mean better quality, resulting in a 45% sales loss for luxury brands.
In response, consumers are actively seeking out more real-life connections and experiences, searching for authenticity, true value, and looking to buy from brands that adhere to social and environmental responsibilities. As such, an ethical commitment has become crucial, and luxury can no longer do without a sustainable strategy and ethical commitment. Products need to have a story, but the story needs to be deeply-seated in the product and the company. It’s no longer only about “storytelling”, it’s crucial to be “story-proving”.
Brands and retailers are slowly taking their responsibility, encouraged by a generation of young consumers who are more conscious of their social and environmental impact than previous generations. A Cone Comms Millennial CSR study reveals that 9 in 10 Millennials are “prepared to make personal sacrifices to make an impact on issues they care about, whether that’s paying more for a product, sharing products rather than buying, or taking a pay cut to work for a responsible company.” This trend is not only present in Europe. A 2017 Mintel China study showed that 58% of Chinese consumers, mostly millennials, are willing to pay more for ethical brands. Consumer concerns over the ethical sourcing of gemstones or precious metals, and modes of production have pushed luxury jewellery brands to redefine their strategies and strive for business excellence.
An ethical watchmaking brand is one that sources, trades, processes, assembles, promotes and sells in a fair and positive way. The new Richemont brand, Baume, launched in May 2018, promises vegan-friendly and eco-conscious products, favouring natural materials, recycling and upcycling. In fact, the brand has joined forces with Waste Free Oceans, an NGO that collects plastic debris from oceans, rivers and beaches in order to recycle them into products. And in keeping with their environmental policy, the brand keeps packaging to a minimum, using boxes and pouches that can be repurposed. Adding to that a great online presence and affordable pieces, and Baume ticks all the boxes for the ethical consumer and their main target, millennials, as revealed by an analysis of mentions for Baume watches across all social media platforms in the past year:
Second hand, second life
While brands like Baume or Chopard are producing new products in an ethical way, another big trend among ethical consumers is to buy second-hand. It’s another way to enjoy a luxury product by giving it a second-life rather than buying, and thus producing, a new one. As the FHH’s 2018 Trend Report explains, the second-hand watch market was almost nonexistent in the 1990s but is now estimated to be worth US$5 billion in revenue, increasing in value by 5% year-on-year. Sales of pre-owned watches are expected to equal, if not exceed, the market for new watches within the next five years.
Another big trend among ethical consumers is to buy second-hand, thus giving a new life to the product.
This boom in the second-hand market is recent, having taken an entirely new dimension in the last few years, with the Internet and specialised Facebook resale groups and second-hand websites, such as Chrono24, The RealReal and Watchfinder, which was recently acquired by the Richemont group, proving that the luxury industry is taking notice of this trend. Scale effects have made it possible to offer an excellent service network, from certification to delivery and servicing. Yet, buying pre-owned watches online is not that simple, so make sure you avoid the pitfalls thanks to our newcomer’s guide to buying second-hand online.
One of this year’s big event that has led the way in rewriting narratives, from storytelling to story-proving, was Homo Faber, the Venice exhibition organized by the Michelangelo Foundation. The first instalment, “Crafting a more human future”, celebrated the skilled work of craftsmen across many luxury sectors. Johann Rupert, co-founder of the Michelangelo Foundation said: “It is about making sure Europe remains a workshop for the world. We have seen the rise of hate, and this is just before we are going to be hit by artificial intelligence and robots. A whole stratum of employment is going to be wiped out. So, what has Europe got that is unique? Europe has got culture, taste, style, authenticity and generations of small businesses.” Could this pave the way toward a more sustainable luxury industry?