The impact of climate change on customer demand in the Luxury Fashion industry.

Climate change has become a complex and urgent challenge that has significantly interested companies across different industries in recent years. It is especially relevant to the fashion industry, which is one of the most polluting industries that contributes substantially to global carbon emissions. This subject has been widely discussed in the literature, but it can be interesting to evaluate a different point of view: how climate change can impact businesses, and which are its related risks in the Luxury Fashion industry. The majority of companies in this sector are committed to incorporating the evaluation and disclosure of climate-related risks into their business strategies. Therefore, the main risks for the luxury fashion industry are addressed in this analysis. Most luxury fashion brands are facing the challenge of becoming more sustainable and offering sustainable products. To survive in the market and meet stakeholder demands, luxury fashion customers expect that. However, one of the risks analysed is the shift in customer choices toward more sustainable products. It has been revealed not to be a major issue for this industry because, in luxury fashion purchases, some factors, such as quality, product satisfaction, prestige and self-image are prioritized over ethical considerations. Then the analysis will focus on the evaluation of how customer preferences are dependent on climate change, for brands specialized in outerwear products. The aim is to assess whether temperature increases influence a market segment focusing on winter items. The author has developed an analysis method that requires an initial clusterization of jackets based on their thermal insulation. Followed by a historical sales analysis and a consequent definition of the relationship between past customers’ demand and temperature increases. Then demand forecasting is realized, taking into account possible temperature increase trends until 2050. The result is that extreme temperatures could cause a higher demand for lighter jackets instead of traditional winter outerwear. Therefore, climate change can lead to potential risks for companies in this market segment that are unable to take adaptive solutions. But it can result in an opportunity for those who see it as a chance to modify their business and invest more in lighter outerwear.