High Inflation Still Affecting Consumer Spending Behaviour

High Inflation Still Affecting Consumer Spending Behaviour

Mintel's latest research highlights that while sustainability is increasingly on the radar for consumers in the fashion industry, the primary concern in 2024 remains price, with high inflation still affecting spending behaviour.

As a result, many consumers are buying fewer items, with reselling and purchasing second-hand fashion being popular options to save money and contribute to environmental sustainability.

The drive towards sustainable practices is also being influenced by government actions. In the EU, the Corporate Sustainability Reporting Directive mandates companies to report on their environmental and social impact using a standardised methodology. Meanwhile, in China, the government is incentivising innovation in sustainable practices, with initiatives like the Pursuer of Excellence in Sustainability recognising outstanding companies. These measures are part of a broader push by governments to create legislative frameworks that promote sustainable fashion.

Circular fashion is also gaining momentum. As financial pressures ease, there is an expectation that consumers will shift their focus back to sustainability. According to Mintel, social media posts in the UK promoting slow fashion have increased by 29 percent, and retailers are incorporating resale, rental, and repair options alongside traditional retail offerings to tap into the growing demand for circular fashion.

Consumer attitudes towards sustainability remain significant, with over half of UK and German consumers considering it an important factor when buying fashion. In the US, two-thirds of consumers pay attention to eco-friendly claims. However, as Mintel points out, there remains a "value action gap" between consumers’ attitudes and their actual behaviour. For instance, economic constraints often mean that price takes precedence, with nearly half of UK consumers and 67 percent of Germans prioritising affordability over sustainability. Additionally, many consumers find it challenging to determine which brands genuinely engage in sustainable practices, and greenwashing further fuels scepticism.

To close this gap, brands must make it easier for consumers to make sustainable choices and improve the transparency of their sustainability efforts. The rise of fashion marketplaces, such as Vinted, offers consumers the opportunity to combine bargain hunting with eco-friendly shopping, especially as younger consumers remain loyal to fast fashion due to budget constraints. Online resale platforms, brick-and-mortar second-hand shops, and rental services can all support consumers in adopting circular fashion practices.

Fashion brands are also beginning to invest in services that support a circular economy. For example, Uniqlo offers repair services in select US stores, and the German brand hessnatur buys back its own products for resale. These initiatives make it easier for consumers to engage in sustainable shopping practices and contribute to reducing textile waste.

Innovation in materials and technology is crucial for driving sustainability in the fashion industry. Mintel notes that brands are adopting natural, organic, and recyclable fabrics, and exploring new materials such as seaweed fibre, as used by Chinese brand Aimer. Technological advances are also being used to support circular fashion, such as the Autosort for Circular Textiles project, which uses AI to recycle clothes that are not suitable for resale.

Mintel's insights suggest that the fashion industry has numerous opportunities to promote sustainability by embracing circular fashion trends, investing in textile and technology innovation, and improving transparency in their operations. By making sustainable practices more accessible, brands can encourage consumers to make more eco-friendly choices and work towards a more sustainable future for fashion.

For an in-depth analysis of sustainability and consumers, have a look at Mintel’s new Global Outlook on Sustainability: A Consumer Study 2024-25.

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