Luxury brands and decision-makers in the fashion and textile manufacturing sectors are facing a significant transformation in their business models. The COVID-19 pandemic has accelerated the need for change, and while the full implementation of new ways of thinking is still in progress, the transformation is well underway. A study conducted by Sistema Moda Italia (SMI), the association of Italy’s textile and apparel producers, has identified five urgent themes that decision-makers should prioritize: collection structure, product development, sourcing, sustainability, and logistical planning.

The study, which involved the participation of CEOs from 300 leading luxury companies in France and Italy, highlighted the major structural changes that are expected to shape the industry. These changes include the accelerated adoption of digital technologies, the emergence of new distribution models, and the evolving relationship with consumers. The transformation is projected to take place in 2021, with the visible results expected in 2022. However, the overall market is not predicted to fully recover until 2023.

One of the key findings of the study is the shifting relationship between suppliers and luxury brands. This relationship is expected to undergo significant changes, leading to greater integration and interaction between consumer brands and their supply chains. This shift will have an impact on the creative and product development process, production planning, and merchandise delivery. Suppliers are expected to play a pivotal role in terms of know-how, service, and sustainability. Their proactive solutions will be crucial, as many brands lack the necessary expertise.

During the presentation of the study findings, Luca Bettale, a senior partner at Long Term Partners and author of the study, emphasized the fragility and costs associated with the industry’s rigid structure, which were highlighted by the COVID-19 pandemic. The crisis demonstrated the need for increased flexibility in the luxury industry’s future business model. The industry’s traditional seasonal approach will diminish, and economic activity will no longer be dictated by traditional seasons and collection rhythms. Collections will be streamlined, with fewer items introduced, and consumer data analysis will play a larger role. Monthly novelty launches will help refresh the product range and drive social media engagement.

Sourcing practices will need to become more flexible and collaborative with suppliers. Leading luxury groups have already recognized this and have acquired suppliers to gain greater control over their supply chains. When direct control is not possible, luxury companies must establish close relationships and dialogues with their sourcing partners.

The transformation of the collection structure also has implications for the creative process and manufacturing. Creativity will no longer be limited to specific seasons but will be an ongoing, year-round activity. Manufacturing will need to respond with smaller production runs that align with seasonal colors and fabrics. Logistics, including sourcing and physical product flow, must be improved to accommodate these changes.

Additionally, sustainability is a critical issue for the luxury industry. Consumers now demand concrete action, and companies must take sustainability seriously rather than treating it as a mere advertising and marketing concern. Collaboration with suppliers is essential to drive meaningful change. Both labels and suppliers must work together, with a strong conceptual foundation, to address and achieve sustainable development goals.

In conclusion, the luxury industry is at a vital turning point, and decision-makers must prioritize collection structure, product development, sourcing, sustainability, and logistical planning to navigate the ongoing transformation successfully. By focusing on these areas, luxury brands can position themselves for future success in a rapidly changing industry.

Useful links:
– [Link 1: “The Luxury Society” – A community for luxury professionals](https://www.luxurysociety.com/){Link 1}
– [Link 2: “Sustainable Fashion: Everything You Need to Know”](https://www.globalfashionagenda.com/news_resources/sustainable-fashion-everything-you-need-to-know/) {Link 2}