The Value of Made in Italy Fashion Production in the Time of Covid-19

Covid-19 has provoked a general slowdown of the fashion industry and a drastic reduction of international trade, creating great difficulties for global manufacturing supply chains. New paradigms of consumption have emerged that require a change in the system, currently dominated by fast fashion and low-cost products. Great attention is now given to elements such as sustainability, the duration of products over time, and geographic proximity to the area of production. This break with the past can represent an opportunity for Made in Italy production, that has always been attentive to the environment, social responsibility, and the quality of workmanship, that guarantees product durability. In an open letter to the magazine WWD Women’s Wear Daily, Giorgio Armani pointed to new values, inviting fashion to rethink the frenetic times of collections and the continuous generation of new items, instead of items that last over time due to their quality and iconic style. However, Made in Italy production appears to be behind with respect to the digital innovation of business models, another element that has received a strong boost due to the pandemic. Moreover, the push to "buy local" that is becoming increasingly widespread, starting in China, could have a negative effect on our exports.

In order to assess the conceptual and mental associations linked to Made in Italy products, before and after the onset of the Covid-19 pandemic, we conducted a survey that reached over 500 people.^[1] The study also made it possible to investigate whether potential associations can help orient the purchasing choices of consumers towards Made in Italy products and services, thus supporting companies in designing their strategies for the future. The focus of the survey was the fashion sector.

The importance of Made in Italy production

The results show that the Made in Italy label is more important in the food sector, with 84 percent of respondents considering it extremely or very important, and in the fashion sector (50 percent). For furnishings (36 percent) and automation (14 percent) the importance of the label decreases considerably. There was no significant difference in the responses between Italians and persons from other countries, or between men and women.

If we focus on the fashion sector, it is interesting to compare the results by generation: among both Italians and persons of other nationalities, the importance of the Made in Italy label decreases when we go from Generation X to Generation Z, hinting at a possible threat for the future.

Where something is made is very important especially when people purchase luxury products (79 percent of those interviewed check where luxury products are made, while only 32 percent do so when they purchase mass market products). The "Made in" label is slightly more important for women than men (85 percent vs. 70 percent). A comparison between generations finds that the importance of where luxury goods are made falls when we go from Generation X to Generation Z, confirming the general results for brand origin.

Italians associate luxury almost exclusively with Made in Italy products: among the 83 percent of respondents who look at the label when they buy luxury goods, 79 percent seek only the Made in Italy label, 19 percent seek products made both in Italy and elsewhere, and another 19 percent seek products only Made in France, or combined with other origins, and only 2 percent seek other specific origins.[2]

With respect to Italians, persons from other countries seem to have broader preferences regarding the countries of origin with which they associate luxury. Among the 72 percent of the international respondents who pay attention to the label when they purchase luxury goods, 37 percent seek only the Made in Italy label, 40 percent move freely between Italy, France, Germany, Japan, Great Britain, and European countries in general, while the rest of the sample seeks Made in France articles only, or those combined with other origins.

In the mass market, the portion of respondents interested in a "Made in" label collapses (for 87 percent of foreign respondents belonging to GEN Z, this aspect is not important at all).

Associations with the concept of Made in Italy after Covid-19

All of the attributes proposed in the questionnaire as possible associations with Made in Italy products (authenticity, entrepreneurial spirit, tradition, design and aesthetics, proximity, care for people, sustainability, unique products, resilience, and technological innovation) received a positive response from both Italian and foreign respondents, although the importance and the range of values changed between the two groups.

Italians identified the concept of Made in Italy principally with the following values:[3]

• design and aesthetics, or sense of beauty;
• authenticity, considering the fact that Made in Italy companies have a long history, links with the local territory, and products that are the result of true know-how;
• uniqueness of the product, in terms of design, quality, and artisanship;
• tradition, understood as the values of family and the local area.

The international participants identified the concept of Made in Italy principally with the first three values cited above.

Italians, on the other hand, see little association between the concept of Made in Italy[4] and the attribute of technological innovation, understood as orientation to digitalization (for example e-commerce, smart working, and the use of social media). The international sample indicated a weak association between Made in Italy and the concepts of:

• technological innovation;
• resilience, understood as the ability of entrepreneurs and managers to overcome crises or periods of difficulty;
• sustainability, in terms of transparency of the production process and attention to the environment;
• entrepreneurial spirit.

For all other values – attention to people and proximity[5] – that were submitted to the sample but that have not been mentioned previously, both Italian and international respondents indicated an intermediate level of association.[6]

A positive data point is that the perception of the Made in Italy values proposed remained practically unchanged after the onset of the pandemic, and on some fronts even improved. For the Italian sample, technological innovation, resilience, entrepreneurial spirit, and tradition are the values that showed the greatest improvement in terms of perception with the spread of the pandemic. For the international sample, technological innovation and resilience showed that greatest improvement in the new post-Covid scenario.[7]

Future prospects

The participants stated that in the future they will be more likely to purchase goods that are sustainable (with reference to the environment and people), durable (with reference to quality and iconic style), and Made in Italy, even if this means an increase in the prices of the products. The Italian respondents were even more interested in future purchases of Made in Italy products and durable and sustainable products, with respect to non-Italian products.

All of the female respondents seemed more inclined than men to purchase durable, sustainable, and Made in Italy products.

Comparing different generations, the respondents gradually showed a lower propensity to purchase Made in Italy, durable, and sustainable products as age decreased. A possible explanation is that the younger generations are discouraged by the likely higher price of sustainable, durable, or Made in Italy products.

The non-Italian respondents showed the same decreasing trend in the propensity to purchase more durable, Made in Italy products when moving from older to younger generations. With respect to Italians, younger foreigners are more interested in sustainable products, that however are not necessarily linked to Made in Italy production.

Made in Italy and sustainability

Made in Italy products tends to be seen as sustainable (average score of 6.6/10 for environmental sustainability and an average score of 6.4/10 for social sustainability), but there is certainly still room to improve. In general, the respondents stated that Italian fashion products are slightly more focused on environmental sustainability (attention to industrial processes that reduce harm to the environment) than on care for people (safeguarding of work and fair compensation).

The comparison between the different nationalities shows that Italians think Made in Italy production gives priority to environmental sustainability rather than social sustainability, while the opposite takes place for international respondents.

Another observation deserving mention is that among all of the generations of international respondents, GEN X showed the highest association between made in Italy products and sustainability from both an environmental and social standpoint; among Italians, on the other hand, this is true for the younger generations (such as GEN Z).

In conclusion, the results show that:

• Made in Italy is still very important for people above all in food and fashion purchases;
• being Made in Italy is more important for older generations and for Italians, and is more important when respondents consider the purchase of luxury products rather than mass market goods;
• the values that people traditionally associate with Made in Italy are design and aesthetics, authenticity, and product uniqueness (and tradition for Italians). To the contrary, they don't see a strong link between Made in Italy and technological innovation (and resilience, sustainability, and entrepreneurial spirit for the international sample);
• perceptions regarding association with the concept of Made in Italy have remained practically unchanged since the spread of the pandemic for the respondents except in some cases in which they improved (first of all, technological innovation and resilience). For Italian respondents, entrepreneurial spirit and tradition have also shown improvements as an effect of the reaction to Covid-19;
• for the respondents, Made in Italy products are sustainable from an environmental, more than social point of view, but there is still room for improvement of all of the aspects and values linked to sustainability.

Methodological appendix

Who did we interview?

555 respondents: 62 percent women; 38 percent men.

71 percent Italian (64 percent women and 36 percent men).

29 percent international (57 percent women and 43 percent men): 65.6 percent European, 22.5 percent Asian, 11.3 percent American, and 0.6 percent from the rest of the world.

Generation B born between 1940 and 1959: 5 percent.[8]

Generation X born between 1960 and 79: 20 percent.

Generation Y born between 1980-94: 22 percent.

Generation Z born between 1995-2010: 53 percent.

Seventy-five percent of the persons interviewed belonged to GEN Y and GEN Z. This should not be considered as a problem because the growth of sales in specific sectors is often driven by these generations. For example, BCG[9] stated that 130 percent of luxury market growth between 2018 and 2025 should come from millennials (considering millennials as those born from 1984 to 2000, thus mixing GEN Y and Z as defined above).