21 March, 2021 - 30 May, 2021
05 June, 2021 - 09 June, 2021
High Point, North Carolina, U.S.
09 June, 2021 - 10 June, 2021
30 June, 2021 - 01 July, 2021
05 July, 2021 - 08 July, 2021
In a rather slow changing world, strategic thinking was a very relaxed process during the centuries of leathermaking, but in the last few decades, the subject has needed to become part of routine management team discussions. As the 20th century progressed, the leather industry slowly began to recognise that changes were happening that required long term planning to adapt for the implications of an aging global society, rapid urbanisation and a huge emerging middle class.
Even the best laid plans can be knocked aside by events. Sudden traumatic events such as wars, earthquakes and plagues have always been with us, although it is not so often that they quickly impact the whole globe. In 2020, we had such an event, and its consequences still continue to reverberate around the world. The World Bank think that by the end of this year, 150 million people will have been thrown back into extreme poverty; urbanisation has been slowed, and in some cities been reversed by fear of crowds and public transport.
Suddenly, new long-term trends have come to the fore. Nearly all were already on the radar, but the order of change has been upturned and matters have accelerated. We observe these developments play out as they move through our business network, impacting each individual actor a little differently.
When physical stores closed to slow the spread of the disease, the switch to online was dramatic. For big areas of retail, especially heavily borrowed sectors, it was the final blow and they have closed forever. Retail has been permanently changed, as has the look of High Streets. It may not mean that they are totally dead, but they will be different. Surviving physical retail will refocus on what it can do best sector by sector to integrate with a new omni-channel approach, and how historic shopping areas will look will depend on the traffic that is persuaded to return.
Many office staff, even quite a lot associated with leather making, have now worked from home for nearly a year. Enhanced IT systems, better mobile equipment, more use of collaborative software and video-conferencing mark some long-term changes in the way we will work in the future. We will still use offices, get together in teams, collaborate and create, but a return to cramped office space, hot desks and a physical 9-5 presence five days a week feels increasingly for the history books. Working women have suffered disproportionately during the pandemic, but these longer-term trends might be to their advantage.
For many consumers the problems that have lain behind this pandemic overlap with a too casual approach towards climate change and sustainability, both of which have been moved up the agenda.
Those in the leather industry who have not invested in sustainability and ESG matters will discover that becoming engaged can be costly, requiring third party accreditation, checking through suppliers’ details, specifying chemicals and being transparent about supply chains and waste disposal. All this during a sustained period of reduced trading that for some sectors looks like it may not return to 2019 levels until the last quarter of this year, if not even into 2022. Hence, the industry wide expectation that we will be seeing more industry consolidation as some decide to merge or sell and leave the battle to others.
New trends carry surprises
Each one of the new trends has implications for markets, creating its own unique mix of risks and opportunities. Most are obvious, but some carry surprises. Sustainability has raised biodiversity alongside climate change as two overlapping issues and got governments making bigger promises with every week. Electric vehicle purchases have accelerated much faster than previously expected, and for some reason, this is wrongly becoming a segment where leather has a bigger battle ahead for market share.
As humans, we now realise that much of the damage to biodiversity has been because we have stripped the planet of its resilience. Monocultures in agriculture, urbanised landscapes, tourism destroyed coasts, oceans emptied of fish. Now it appears that business is no different. We need to build in a new resilience and link it with a high level of adaptability and versatility. Over the years, leather has been able to do this, we have been the stubborn ones.
February 10th, 2021
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