Is E-commerce Ready for Sustainable Luxury?
Consumer demand for sustainable luxury is on the rise, and a number of online retailers are tapping into this growing market’s potential. Millennials seem particularly open to sustainable solutions, and this is significant considering as the industry continues to expand across digital.
The 2017 report by environmental marketing firm Shelton Group states that 90 percent of Millennials will trust a brand with sustainable practice, while 95 percent of them will recommend the brand to friends and family. Despite this, sustainable luxury is still underestimated, with many established brands and retailers yet to truly embrace it.
One e-tailer that does is Elborne Living, which stocks luxury brands from Mara Hoffman to up-and-comers like Cienne, promoting responsible clothing for the conscious consumer. “Sustainable and luxury are two fashion sectors with growing demand,” explains Ashley Suttle, founder and creative director of Elborne Living. Noticing a gap in the market, Suttle launched the platform in 2015, after realising there were emerging sustainable designers producing incredible fashion, but no strong digital platform bringing them together.
“In today’s world, it’s no longer enough to just make nice clothes; women want to know how they were made, by whom, and at what cost,” says Suttle. Since establishing the site, she’s seen a marked shift towards brands becoming more sustainable.
“It is a growing market, so premature leaders will be able to own this space”
“As people learn more about the negative impacts of conventional fashion, it’s really hard to un-see those truths,” she continues. “Companies that do not recognise their responsibility to be ethical and sustainable are not perceived as fashionable anymore.”
Some of their most successful labels have been with them since launch, including New York-based brands Suzanne Rae and Bheno, and Kowtow, based in New Zealand. “Every season we pick up more labels as there are a growing number of modern and sustainable options,” she says. “We look at the integrity of the fabric, fibre content and manufacturing practices as well as brand transparency and ethos.”
So whilst sustainability seems to be a buzzword, how practical is an online platform focused purely on ethical luxury design and production? Katie Smith, analyst and insights director at retail analytics firm, Edited, warns that there are challenges in persuading luxury customers to purchase online. “Luxury price points mean it is easier for people to bond with brands in-store versus online,” she says.
She is somewhat optimistic, suggesting businesses who tap this evolving consumer trend to promote revenue growth might reap rewards. “It is a growing market, so premature leaders will be able to own this space.”
“Online retail is an invaluable platform for many ethical brands, which often have much smaller production runs than larger fashion brands”
With online retail — enabled by technology and consumer demand for convenience — crucial to fashion businesses, e-commerce is growing four times faster than brick and mortar. Market research firm, Statista, projects global e-commerce sales will reach $4.88 trillion by 2021, an increase of 112 percent in 2017. Thus, it follows that demand for sustainable luxury e-commerce channels should also grow.
“Online retail is an invaluable platform for many ethical brands, which tend to have much smaller production runs than larger fashion brands,” says Sebastian Jones, senior analyst at consumer trend forecaster, Foresight Factory.
With the aid of curated retailers like Elborne Living or the Acey, a UK-based conscious platform with competitive contemporary price points, consumers can now discover smaller ethical brands more easily online. It also means that brands can tap the resources of a larger online platform.
“Small sustainable brands are likely to struggle with things like cheap or quick delivery if they operate through their own e-commerce site,” says Jones. “A larger platform allows them to access these services — which are increasingly expected by consumers — without having to organise the logistics themselves,” he adds.
Additionally, Jones suggests that consumers expect ethical products to be expensive. “Luxury consumers are happy and willing to spend on expensive items, so high cost due to sustainability is unlikely to be off-putting,” he believes. “Consumers are willing to make high-priced purchases without visiting a brick and mortar store. I don't see why this wouldn't translate to the luxury sustainable sector.”
There is trickle down to the consumer too: they can access these brands more conveniently, with a higher level of round-the-clock customer service, including chat windows and convenient delivery and returns.
“It's difficult for retailers to offer the service demanded by luxury consumers, without compromising on sustainability ”
But do luxury practices translate for sustainable companies? According to Jones, “fancy protective packaging is wasteful; quick, convenient delivery is hardly environmentally friendly. It is therefore difficult for retailers to offer the convenience and service demanded by luxury consumers, without compromising the sustainability of their business.”
Although there aren't enough sustainable luxury products on the market to gauge demand, Smith believes that increased awareness of global environmental issues means there is potential for the market to grow. “Sustainability won’t become a norm offline or online, but in order for it to work, the brand or retailer needs to push sustainability first, versus waiting for consumer demand.”
Sustainability can serve as a real source of differentiation, especially in an oversaturated online market which is increasingly considered a powerful sales channel. For Elborne Living this strategy is clearly working, seeing double and triple digit growth since its inception. “We’ve kept the same core team since day one — we are a close-knit crew with a singular vision and mission: to offer sustainable options to the fashion-minded shopper.”