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Over the past 10 years, the volume of unsold goods at luxury brands has doubled. The pandemic boom has been replaced by a slump, and warehouses of industry giants such as LVMH (Louis Vuitton, Dior, Fendi) and Kering (Gucci, Bottega Veneta) are bursting with billions of euros worth of unsold products. This is reported by 1prof.by with reference to Sukces.
The production of “exclusive” goods is not always justified by demand, which leads to overproduction and harms the environment.
Luxury brands position themselves as more environmentally friendly than mass-market brands, referring to limited production and durability of products. However, the reality is not so clear-cut.
Fighting overproduction is a challenge for luxury brands. Lowering prices or co-operating with outlet stores can undermine “exclusivity” and therefore prestige.
LVMH and Kering are already working with Google to use artificial intelligence algorithms to develop more sustainable production and distribution strategies.
Luxury brands will have to rethink their strategies to save face and not harm the planet.