23 August, 2019 - 25 August, 2019
01 September, 2019 - 03 September, 2019
03 September, 2019 - 05 September, 2019
04 September, 2019 -
16 September, 2019 -
The idea of mapping out positioning in the marketplace using Perceptual Maps started about forty years ago and is a useful tool to help visualise what is occurring.
About ten years ago we worked with the technique to understand and explain the potential damage to the leather industry of two major factors: The aggressive promotion of much improved alternatives for leather, and the increasing separation of under 35-year-old consumers from livestock and understanding of the natural products derived from them.
The Map laid out below is the one we used most often. It is a quite standard Perceptual Map, as most companies reading this will have used at one time or another to assess how they are placed against their competitors, or how their main customers compete with their rivals, using a variety of co-ordinates. Our map for leather indicated that historically, there have been a lot of substitutes at the lower price level, vinyls and “pleather”, but that they were improving fast and coming with well funded promotion. So much so that one or two were good enough to be attacking the high price sector, most notably in automobiles.
We argued that what we termed “regular leather”, which one might roughly equate with pigmented finishes, heavily corrected and heavily printed leathers, would need to be sure that they were identifiable as leather to consumers, and become more innovative to fight off the challenge. At the same time, a strong communications programme would be required to protect the top end and the sector as a whole.
The industry decided to take a different route until recently and has been met by more of a perfect storm. Two more recent events have to be added into the thinking behind the Perceptual Map in 2019. The biggest ongoing issue is the arrival of vegan thinking. While it is not so relevant on a global level, as the world as a whole is not swaying for its recognition of the value of meat and dairy products, the argument has allowed certain animal rights and climate change campaigners to find common cause and obtain access to powerful platforms which they are well funded to promote. We always had an aggressive PETA, but these heightened pressures, which take a huge amount of time and cost to challenge, are new. The counterbalancing voices are few and appear fragmented.
The second element has been the volatility of raw prices in the last few years, for which the industry was not prepared; and the evidence is that it did not react well. The underlying industry belief that because raw supply is not pulled by leather demand, leather is a scarce material whose value can only rise prevailed; perhaps it went to everyone’s head.
It takes one back to 1929 when Swanson told the American leather and footwear industry they should have changed their slogan from “nothing takes the place of leather” to “nothing takes the place of leather at 16 cents a pound or less.” It is easy to feel justified in pushing leather prices up when luxury goods get so much press, but with ever improving alternatives, price and value for money start to play an increasing role in the other 90% of leather sales.
When leather prices went high and looked like they would stay high, our customers looked for alternates, and when they dropped, we have been shocked that they have not come back as they did in the past. Yet, for many of our customers, leather has become too much trouble. If you add price volatility, vegan clamour in many major markets, and new anti chromium laws like Proposal 65 in California and all the complaints, true or false, about methane related to cattle, would you start again with leather? That is before reckoning how much more plastic or textile materials are to handle and cut using the new tools of Industry 4.0.
And attacking trade shows for letting synthetics and other alternates have stands is not the way to save an industry under pressure. It is not the fault of Lineapelle, APLF or any other trade show that buyers now want to see all their buying options in one trip and under one roof; and certainly nothing to do with them that all these Chinese companies have been allowed to get away with calling themselves “XYZ synthetic leather Co. Ltd” over the years. The recent action by the CLIA to tell this sector prior to ACLE that “international legislation stipulates that ‘leather’ refers to leather processed from animal skins” and they should use “synthetic materials” instead of “synthetic leather” looks like the correct way of addressing this. I am certainly clear that in Asia at least there has been great pressure from the fairs over many years to achieve this outcome, but intervention by the industry associations is the right way to deal with this, rather than making highly supportive businesses like Lineapelle and APLF risk their commercial future by getting involved in issues that are really beyond their scope. Follow that latter route, and before long we will have our top tanners asking to exhibit alongside synthetics in their shows, as this competition is here to stay.
At this juncture, it is worthy of considering a couple of other issues: First, our industry promotion of leather is about “responsible” leather, although it is clear that around the world quite a high proportion of tanners are not. China has shown that when all bodies become aligned, matters can be dramatically improved, not least by ensuring that environmental and labour laws are enforced. We will never have a perfect industry totally without cheating on effluent, slave labour and working conditions, but we need to quickly raise it to a much better standard than now (and then keep on trying). So the next job for our institutions is to use their strength to start influencing all countries, associations and tanners to comply with at least a minimum standard of behaviour. A tanner who does not manage people and waste responsibly is not worthy to be a tanner, and we need to say so.
And finally this century is nearly two decades old, and if you look around, the innovation that our customers are seeing has come more from the alternatives than it has from leather. Leather appears to have stayed with the classics, pursuing a total traditional luxury dream. If there is one great thing I remember from my career, it is the relentless production of new and innovative leathers with some tanneries, like Lanctan, having fabulous innovation expertise and others like Salz and Prime investing heavily to have a category killer every two or three years, while the whole world once watched in admiration as every tannery in Santa Croce would consistently upstage everyone, year after year.
We need that spirit back. Leather cannot stand still and expect customers to return.
August 14, 2019
Follow Dr Mike Redwood on twitter: @michaelredwood
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