What SDGs are expected of the luxury industry?

This series reveals the tectonic shift in the luxury industry—a "Great Reset"—based on research (a joint study by Dentsu Inc., The Goal Inc., and Condé Nast Japan) examining the impact of the COVID-19 pandemic on luxury brand business.

[What is the Great Reset?]
A concept advocating the redefinition of capitalism and a comprehensive rethinking of the current global economic system. It was also the theme of the 2021 World Economic Forum.

This installment features Mr. Takaharu Hiraishi, Vice President of Condé Nast Japan (publisher of VOGUE JAPAN), as our guest. We spoke with Mr. Yutaka Matsuda and Mr. Akira Amano of Dentsu Inc. about the future of communication in light of the SDGs movement and the Great Reset.

For survey overviews, refer to Series Part 1 and Part 2
Part 1: The New Customer Journey Born from the Digital Shift During the Pandemic
Part 2: What Is Now Expected of Luxury Brands

What Reality Do Younger Generations Seek from Brands?

Amano: First, could you briefly explain the background behind conducting this joint survey?

Hiraishi: We planned this joint survey around June 2020. At that time, many stores were closed, and luxury brands, including department stores, suffered significant business damage. As media professionals, we were also facing an uncertain future every day.

On the other hand, the pandemic accelerated the rapid adoption of technology, leading to significant shifts in consumers' lifestyles and values. As the way people choose media, consume information, and experience shopping changes, we conducted this survey to gain deeper insights into consumers' interest in luxury brands and their purchasing behavior. We hoped to find a brighter outlook for the future and share it with our partners.

Amano: Based on the survey results, could you share the points that particularly caught your interest, Mr. Hiraishi?

Hiraishi: I focused on two keywords: "Reality" and "Reliability." As consumers are now bombarded daily with vast amounts of information in virtual environments, they increasingly prioritize "what they can trust." I feel these two keywords are crucial points for enhancing engagement between brands and customers, or between media and audiences.

Matsuda: I agree. Beyond the quantitative survey results, qualitative interviews revealed opinions like, "When I find an item I like on an official e-commerce site, I check real photos taken by regular people on flea market apps to confirm it matches my image." This really drove home how strongly Reality is being sought.

The Value of Authentic Media Demonstrated by Reliability

Amano: The growing demand for Reliability is another key point to note. While social media usage and its influence have surged during the pandemic, scenes where the importance of media literacy is being questioned anew—regarding the authenticity of information and its spread—are also increasing. Furthermore, much of the information shared on social media often traces back to publisher content. How can we define the value of authentic (trustworthy) media like VOGUE?

Hiraishi: Since its founding in 1892, VOGUE has consistently pursued "Creativity, Quality, Reliability," delivering content that captivates audiences worldwide.

The source of this lies in the editors' planning capabilities, journalism, and creativity. We take pride in the fact that the culmination of these efforts is recognized not only in the magazine but across various platforms like our website, social media, video, and events, enabling us to secure our position as an authentic media outlet.

The stronger consumers' desire for reliability becomes, the greater the value and expectations for authentic media will grow. That is precisely why we feel compelled to continuously pursue quality, ensuring we never betray that trust.

Amano: As you mentioned, VOGUE is expanding across various platforms. How do you perceive the value of the magazine medium itself?

Hiraishi: Our recent survey findings show that magazines are highly valued as a source of information on fashion and other topics among Millennials (ages 25-39) and the General generation (ages 35 and above). Conversely, for Generation Z (ages 24 and below), digital sources like social media, websites, and video platforms dominate the top rankings.

This made me want to dig deeper. Who exactly are these readers who deliberately engage with print magazines in this digital-dominant era? While Gen Z readers aren't numerous, they certainly exist, and we receive even more appreciation from Millennials. Our survey also revealed that approximately 40% of Vogue magazine purchasers over the past year were actually Gen Z and Millennials.

What value do young people find in physically holding a magazine and turning each page? This insight could be valuable for luxury brands also facing the challenge of engaging younger generations, so we plan to continue our research.

France's Leading Role in the Great Reset

Amano: With SDGs becoming an international agenda, various initiatives are spreading across industries. How is this trend impacting the fashion industry?

Hiraishi: While it's an unavoidable challenge for all industries, the fashion industry is one of the sectors most compelled to address sustainability and environmental issues.

Globally, the fashion industry is often cited as the second-largest polluting industry, making it imperative for the sector to spearhead reform. VOGUE JAPAN has also signed the "Proposal for Promoting Sustainable Fashion," calling for improvements in the environmental impact of Japan's fashion industry, and submitted it to Environment Minister Shinjiro Koizumi, among other initiatives.

Matsuda: While SDGs were sometimes viewed as just another branding tool not too long ago, I feel they've now become essential. It's almost as if brands that don't engage with SDGs can't truly call themselves luxury brands anymore.

Hiraishi: More consumers are considering whether a brand prioritizes sustainability when making purchases.

Matsuda: This tendency is particularly strong among younger generations. Furthermore, as luxury brands increasingly become conglomerates and cannot ignore the stock market, I believe the fact that investors in Europe and the US are closely watching SDG initiatives is also having an impact.

Amano: While the theme of this series is the Great Reset, why has the luxury industry begun reevaluating its traditional approach?

Hiraishi: My impression is that it started with the 2018 issue of a certain brand disposing of unsold inventory. Then came the "Fashion Industry Climate Action Charter" (※1) based on the Paris Agreement, followed by the announcement of the "Fashion Pact" (※2) at the 2019 G7 Summit in France. France took the initiative, and the momentum to drastically rethink the industry's existing practices accelerated rapidly.

※1＝Fashion Industry Charter for Climate Action
A treaty supporting one of the Paris Agreement's long-term goals: "pursuing efforts to limit the global temperature increase to well below 2°C above pre-industrial levels." It aims to achieve a 30% reduction in total greenhouse gas (GHG) emissions by 2030 and reach net-zero by 2050. Condé Nast was the first media company to sign.
 

※2＝Fashion Pact
At the G7 Summit held in Biarritz, France, in August 2019, 32 companies from the fashion and textile industry, primarily based in Europe, pledged to work towards common, concrete goals in three areas: climate change, biodiversity, and ocean protection.

Amano: Among these, could you share any brand or maison initiatives that stood out to you?

Hiraishi: Kering Group's Gucci entered into a partnership agreement with "The RealReal," a pre-owned luxury goods marketplace. The group also announced an investment in the pre-owned luxury marketplace "Vestiaire Collective." Additionally, Ralph Lauren launched a clothing subscription and rental service.

Luxury brands entering the resale market and rental business represents a new and unprecedented movement that is drawing significant attention.

Other initiatives include LVMH Japan launching a project supporting women's re-employment and Prada unveiling its recycled nylon "Re-Nylon" collection. Each brand is tackling social issues under different SDGs themes.

Amano: Precisely because counterfeit luxury goods are so prevalent, brand-led resale initiatives offer significant benefits to users, right?

Hiraishi: That's right. Official pre-owned items guarantee authenticity, and users can trust they've been meticulously maintained.

Toward a world where engaging with SDGs is the norm, regardless of immediate impact

Amano: As the luxury brand industry undergoes a Great Reset, what initiatives is Condé Nast focusing on?

Hiraishi: As an authentic media outlet, VOGUE's mission is to accurately convey the diverse initiatives of each brand to the world and reach a wide audience.

Specifically, to serve as a platform for in-depth coverage on SDGs, we launched " VOGUE CHANGE " in 2020.

※3＝VOGUE CHANGE
A project introducing information on sustainability, diversity, and inclusion from both domestic and international sources, aiming to drive CHANGE toward a better future society alongside our readers and audience.

I believe corporate-led communication about SDGs is a challenging theme. For example, a representative from a certain brand stated, "Of course we engage with SDGs, but actively communicating that doesn't align with our brand philosophy, so we don't do it."

The issue isn't whether to speak up or not; what matters is ensuring customers and audiences accurately understand the fact that every brand is undertaking remarkable initiatives. That's where the role and responsibility of authentic media lie.

Amano: It's fascinating that some brands deliberately choose not to communicate their SDGs efforts. On the other hand, I think many companies still don't know how to approach the SDGs. Could you share again how the SDGs impact a brand's marketing activities?

Hiraishi: Regardless of whether there's a tangible impact, it's becoming a world where engagement is simply expected. While the specific themes a brand focuses on will vary based on its philosophy and products, marketing activities grounded in SDG themes are undoubtedly indispensable.

Matsuda: In the past, SDGs were sometimes mocked as something for "trendy, socially conscious types," but society has changed. When you ask younger generations about the importance of SDGs, they sometimes respond with disbelief, saying, "Isn't that just common sense?"

Hiraishi: It's crucial to communicate effectively with the younger generation now, as they are our future customers. As an authentic media outlet, we also want to continue actively supporting various brands in their information dissemination.

Amano: Thank you so much for today!