The Retail Planner

Fashion retailers are finding new ways to negotiate the desire for sustainability by creating a new language/aesthetic around recycling. They are recognising that they are complicit in the problem, and are creating new marketing campaigns that aim to assert otherwise.

There are several key drivers for this shift in industry attitudes, and it’s an inclusive approach for a number of major players. Fast fashion brands are promoting different ways consumers can be encouraged to participate in the recycling process; latest advertising campaigns encourage consumers to take ownership of recycling their own clothes or be mindful of longevity of garments; retail spaces and services are showcasing a transparent approach to closing the loop on fashion manufacturing.

Extending the life of clothes is the obvious first choice says senior research fellow, textiles environment design, Kate Goldsworthy. ‘The trouble is that we think of materials in a ‘human timeframe’, when actually they might take hundreds of years to decompose. Some longer term-thinking is required.’

Lifetime commitment

‘For Life Not Landfill’ is the latest campaign from UK fashion retailer Jigsaw that focuses on the timeless appeal of clothes built for long term wear, by styling its new autumn/winter collection with vintage pieces donated by customers.

‘We don’t want to get lost in the generic chat about sustainability issues, we just want to talk about the real truths behind how we make our clothes for longevity,’ says Peter Ruis, CEO of Jigsaw. ‘We want our customers to keep everything we make for life. We go out of our way to prove that our polo neck jumper will stand the test of time and it should be the last one you need to buy. The easiest sustainability message to talk about is: don’t throw away stuff.’

Closing the loop

H&M has done much to promote its closed loop positioning on fast fashion: the Swedish retail giant live-streamed its sustainability report conference on YouTube at the same time as launching its first Conscious Exclusive collection in April 2015.

This was followed by a pop-up Conscious Lounge at the London flagship store that showcased the manufacturing processes behind H&M’s #ClosedLoop campaign.  ‘Closed loop materials are a big focus for H&M,’ says Catarina Midby, sustainability manager UK.  ‘The main goal of our garment collecting programme is to create new clothes out of old unwanted ones. We also want to inspire change in our industry, improving on every level and finding ways to collaborate with customers, suppliers, brands and organisations for a more sustainable future in fashion.’

H&M’s latest video campaign promotes fresh thinking around irreverent style choices and also aims to close the loop on fashion.

Integrity marketing

Marks & Spencer has launched a sustainability-focused edit of its autumn/winter collections, curated by Livia Firth an industry spokesperson and creative director at Eco-Age.

The collaborative campaign sees Firth modeling and selecting key items that represent examples of how M&S manufactures clothes with integrity – from being made in a specifically accredited factory, to being produced from sustainably sourced fabrics. ‘Its not about being worthy, but being focused on the issues that matter,’ Adam Elman, M&S’s head of Plan A global delivery tells me. ‘We want to concentrate on the manufacturing process, and increasingly our customers are interested in this discussion, they have an expectation to be informed about each step.’

Elman says M&S chose to work with Livia Firth to help its customers understand the M&S point of difference, which is to reduce the impact of manufacturing clothes on the environment. ‘She’s a well known face for sustainability issues and adds a real voice to our overall Plan A communications strategy. These clothes are made to last, that’s the number one message, and they happen to be fashionable too.’

Retail Planner takeouts:

• Fashion retailers need to take an inclusive approach to sustainability messaging to consumers. Join M&S, H&M and Reformation by providing customers with a recycling service.
• Be transparent. Consumers expect retailers to tell the whole story with detailed explanations of the processes behind recycling and closing the manufacturing loop on fashion
• Promote ethical aesthetics. Consumers want to see real life examples and hear from spokespeople they can relate to.
• Make sustainability an easy choice. Truthful campaigns about hanging onto your wardrobe for longer or styling old clothes with a fresh perspective, will drive new attitudes.
• Be philanthropic. H&M has launched a $1m recycling Global Challenge Award ‘to catalyse green, truly groundbreaking ideas that will protect the earth’s natural resources by closing the loop on fashion’ and is open to anyone with an early stage idea. ‘We need to change the way we work now from linear to circular,’ Hanna Hallin, H&M’s social sustainability manager told me at the Conscious Collection range launch. ‘By 2020, we want all our cotton to come from sustainable resources – and that’s just the start for our most commonly used textile.’ She added that H&M’s ClosedLoop campaign is targeting young people, ‘sustainability can be cool – the next generation need us (retailers) to care about how fashion is produced.’

An edited version of this article first appeared on LSN Global.

Here’s an editorial piece I did for Global Blue’s corporate site:

Selfridges Year of the Monkey CNY 2016

2015 was the year when currency exchange rates and economic instability dictated where international travellers chose to spend their money – and shop tax free where possible.

The rise of travel retail and a new tribe of Sixth Continent globe shoppers was trending in the media as luxury brands and retailers realised that this type of customer is making the world a smaller place. Notions of stereotyped nationalities are being challenged thanks to increasingly savvy global digital audiences, who are discovering new cultures overseas.

Just as Global Blue’s Intelligence team has long tracked transactions and foreign exchange rates (FX) in tandem as a way to predict spending trends, Bain & Co leads its Worldwide Luxury report 2015 with the conclusion that the luxury market – which has, this year, topped a trillion dollars in market size – is now driven by FX movements.

With the majority of Russia’s globe shoppers still staying at home after 18 months of continued decline in spending, this year it became clear the luxury market belongs to the Chinese. They are a $200bn global opportunity, according to Fung Business Intelligence Centre’s latest report , which forecasts their total outbound spending will more than double within the next five years to $422bn.

Global spending on Tax Free Shopping (TFS) in the first half of the year (H1) peaked at +50% growth in April year-on-year (YoY), while the second half (H2) saw similar figures of +20% to +45% and was back to the healthy growth levels we saw in 2012 (which ranged from +30% to +50%). The notable exception was October, when TFS spending growth fell to just +8%, probably due to the reaction by Chinese globe shoppers to their unstable economy and currency concerns.

H1 highs

On the whole, it was attractive FX rates that drove increased TFS spending from the Chinese, who were put off shopping in China and Hong Kong by inflated prices and anti-corruption laws, and instead chose Europe for better prices and authentic brand experiences.

Q1 was a high point for the Chinese when in March they drove a ‘Euro-effect’ surge of +122% global spending growth, which was closely followed by continued growth of +89% in June YoY. This was the year the Chinese moved continents to shop – their TFS spending saw an H1 peak of +75% in the Eurozone YoY.

Europe on sale for Americans

The strong dollar vs the weak euro drove Americans to Europe, where they effectively enjoyed a 15% discount – especially for TFS. American globe shoppers were spending more on luxury goods as well as services such as hotels and restaurants throughout 2015. Their currency exchange benefits led to an increase on global TFS sales by Americans of +53% in the first half of the year vs H1 2014, with a peak of +68% YoY growth in Q2.

Americans discovered Asia too

The first half of the year also saw increased TFS spend from Americans visiting Asia, especially Singapore, where their spending was up +84% in March and again +71% in July YoY. American tourists were among an influx of overseas visitors who travelled to Singapore for sporting events such as the Formula One Grand Prix or the Southeast Asian Games over the summer. ‘Singapore is engineering a series of actionable plans year-on-year to build its image as an international sports hub,’ Euromonitor’s research analyst Cassandra Tan told CNBC in a sports tourism report earlier this year.

H2 highs and lows

2015 saw tempered holiday spending – largely influenced by FX rates – by Middle Eastern globe shoppers for Ramadan as well as by the Chinese for their autumn Golden Week.

Ramadan rush

A later Ramadan in the Eurozone was this summer’s big TFS trends story, as the four biggest Middle East nations (UAE, Kuwait, Qatar and Saudi Arabia) shifted their spending from the UK to Europe – again driven by the favourable FX climate.

This year cities such as Paris and Milan were more popular than London for Middle Eastern globe shoppers during Ramadan due to the favourable euro FX. In the eurozone, total spend for Saudi Arabia shoppers was up +83%, compared to +21% in the UK for July YoY; while shoppers from Kuwait preferred eurozone shopping to the tune of +62% instead of just +3% for the same period YoY in the UK.

Chinese choose Asia and Europe for Golden Week spending

The autumn Golden Week holiday is traditionally the biggest of the two Chinese holidays for overseas travel, so it was a slightly subdued spending frenzy focused in Japan and South Korea that pushed Chinese globe shoppers to a +24% YoY increase in total TFS sales for October, vs a +22% gain for the same period last year. After a rollercoaster year of global TFS spending from the Chinese that has seen Q1 and Q2 highs of +122% and +93% YoY respectively, coupled with a currency that is still holding strong despite its devaluation in August, the Chinese are maintaining similar growth levels one year on, yet their spend is still +24% higher YoY.

Americans mirror Chinese for growth

Q3 saw the Americans starting to match the Chinese in growth terms. TFS across the eurozone increased +36% in August YoY, driven by Chinese and American globe shoppers in equal measure. Both nationalities registered +68% YoY increased TFS sales, with Americans spending three times more in the eurozone compared with this time last year.

Globe shoppers from the US are consistently ranking as Global Blue’s fourth biggest-spending nationality, with 5% of global TFS sales. Europe remains their preferred luxury shopping destination, with France, Italy, Ireland and the UK as their top choices – all expecting more US visitors. Just under 12 million Americans travelled to Europe in 2014, according to the US Department of Commerce, a figure that is likely to continue into 2016, according to the European Travel Commission.

Italy rides Milan Expo wave

Italy was expecting plenty of visitors this year because of the Expo in Milan, a five-month-long international showcase focusing on environmental sustainability which took place between May and October. TFS sales in Milan peaked in September with +12% growth YoY. The weak euro further encouraged US visitors, who were expected to increase by at least +10% in 2015, according to Marzia Bortolin, a spokeswoman for the Italian Government Tourism Board. Demand for European travel by Americans is likely to continue into 2016, according to the European Travel Commission.

Russia’s continued decline halts in Q4

Russian globe shoppers moved from being the second biggest spenders to third place in 2015, with the Americans closing in at number four and both nationalities registering around +5% of global TFS market share. Q4 saw Russian spending remaining in negative growth for October, with -44% decline YoY, which is where it was in December 2014. November was slightly better with -30% sales decline, swiftly followed by -12% in December, which could be a sign of improving globe shopper confidence in 2016.

China’s growth slowed in H2

After stock market worries and currency devaluation, it is not surprising that Chinese spending patterns slowed towards the end of the year. Q3 saw Chinese growth steadily dropping from +74% in July to +51% in September YoY. Q4 saw even further decline. Spending was down to +23% in October YoY, with a rebound in November to +40% YoY. This was a sign that, as the Chinese become used to a slower-paced economic climate, they value overseas shopping more than that at home, and will save up to make these trips.

Asia is a growing hotspot for TFS spending

Despite the summer’s spending dip because of a two-month long MERS outbreak, when TFS sales were down -45% YoY, South Korea has quickly rebounded and is now even more popular among Chinese for shopping trips dedicated to beauty, fashion and luxury purchases. The Korean National Tourism Organisation has confirmed that tourism retail is driving the country’s return to favour, especially among the Chinese, according to the People’s Daily newspaper, which reported that visitor numbers increased by +12% over Christmas and the New Year compared with the same period in 2014. According to Global Blue data, the Chinese are flocking to Seoul, the capital city, which saw a +19% jump in TFS spending by Chinese in November followed by slightly lower growth of +10% in December.

Luxury’s rising sun

Japan has emerged as a key bright spot amid slowing demand for luxury goods in Asia. Chinese globe shoppers in particular are visiting in increasing numbers due to the weakened yen, high levels of personalised customer service, and unique products. Japan’s return to favour was highlighted during Golden Week in October, when the Chinese rediscovered Japan instead of heading to Hong Kong and Macau for shopping trips. According to Global Blue data for October, in Japan the Chinese proportion of spend was 64%, while Chinese tourists spent the equivalent of $830m there, according to a report in China Daily.

Q4’s negative impacts, yet +30% growth vs 2013

Despite the lowest quarter performance of the year, TFS historic data shows cumulative growth over the last two years. Since September, Global Blue has a stronger base, with increased merchant partners, especially in Asia, and as a result we are seeing +30% growth rates compared to historic 2013 figures. Despite the China slowdown impacting Chinese globe shopper spending overseas, coupled with the immediate (but limited) decline in sales for France following the Paris attacks, we are still seeing strong YoY growth for the top 10 TFS globe shopping hot spots / nationalities.

All GB data is expressed in euros.