Textination Newsline

Rogator / exeo investigate for the second time the purchasing behavior during the Corona crisis in Germany, Austria, Switzerland and Sweden ("OpinionTRAIN") and presented the results:

• Declining frequency of visits to discounters and more visits to hypermarkets
• Significant shift in consumer behavior: More spending on groceries
• Dynamic pricing is rejected by consumers
• Online retail: The crisis winner (especially among younger consumers)

Supermarkets and hypermarkets have benefited from the Corona crisis in multiple ways. Firstly, the spending on groceries by German households has risen significantly (more home office, less traveling, more time spent with family and on cooking). Secondly, in 2020, the sales market share of discounters fell by around 1 percentage point to 42.1%, while full-range retailers gained 1.5 percentage points (to 34.8% market share).

“With the continuously growing competition and the existing distribution struggles, it is not surprising if the news on the grocery trade increasingly contain the tenor price war again in the new year. The increase in VAT at the beginning of the year has speeded up the price competition”, says Johannes Hercher, CEO of Rogator AG and co-author of the OpinionTRAIN study

An overview of the results:

Declining frequency of visits to discounters and more visits to hypermarkets
While shopping in all four countries surveyed most frequently took place in supermarkets in the past 2 months (Visits in the past 2 months: Germany 81%, Austria 86%, Switzerland 79%, and Sweden 79%), Germany has the highest percentage of respondents (71%), compared to other countries, who purchased groceries at discounters. Against all expectations, the leading discounters such as Aldi and Lidl have performed relatively worse than the full-range retailers during the Corona crisis. Compared to the first data collection (Apr./May2020), the share of consumers with purchases in discounters in Germany decreased from 74% to currently 71%, the share of shoppers in supermarkets remained unchanged (81%), and the consumer rate for hypermarkets (e.g. Real, Kaufland) increased significantly (from 34% to 44%). While especially older consumers are staying more loyal to the discounter, the consumer rate in the <30 age group is particularly low at 53%. Instead, online grocery shopping shows a high relevance among younger consumers. Almost one in three respondents said, that they had ordered groceries online in the past 2 months.

Significant shift in consumer behavior: More spending on groceries
The crisis situation is leading to massive changes in purchasing behavior. In almost all types of grocery shops, the frequency of visits has decreased, except for online shopping and organic food stores. The reaction patterns of the consumers are becoming increasingly entrenched. As already observed in Apr./May 2020, consumers are going less frequently to grocery stores, but are purchasing more items per visit. In many cases, the discounters do not meet the consumers' need for complete purchases. This is bitter in many respects. In Germany, for example, around a quarter of respondents say, that their spending on food increased during the Corona crisis (5 % are assuming a decrease), while this is the exact opposite (8% increase and 21% decrease in expenses) for clothing (textile, without sports). These figures reflect a massive shift in consumption. This is an indicator that Corona has also changed the statistical market basket. For 2020, the inflation rate for groceries is reported at 2.4%. In this case, most of the change in spending habits can be explained by a quantity effect.

Dynamic pricing is rejected by consumers
Since price flexibility is being discussed in retail as the new "silver bullet to increase margins," the OpinionTRAIN study took a closer look at consumers' views on dynamic pricing ("when demand goes up, the price goes up; when demand goes down, the price goes down"). Results: The consumers' enthusiasm for dynamic pricing in retailing is rather limited. This is not a German phenomenon. In all four countries, the rejection of dynamic pricing is greater than the approval. For retail companies, the "total rejection" segment presents a major threat in particular. This group includes about one-third of consumers and rejects flexible pricing in all 20 product categories presented. Many consumers clearly long for continuity, especially in times of significant changes in terms of retail prices. Although consumers who have already had experience of dynamic pricing (prices can change every hour) in online retailing are more relaxed about the issue, the implementation of dynamic pricing nevertheless involves a significant risk of damage to the customer relationship and a lasting loss of trust.

Online retail: The crisis winner (especially among younger consumers)
The reinforcement of online sales observed in recent years is receiving a new boost due to Corona. The shift in purchasing in favor of online retailing is evident in all four countries, with the strongest showing in Sweden. Here, 40% of consumers say that they ordered more online during the Corona crisis (8% less). Similar results, slightly more moderate, are also seen in Germany (29% more, 9% less ordered online). The demand shift in favor of online purchasing is particularly strong among younger consumers under the age of 30, while it is relatively weak among the age group of 60+.

“It is becoming increasingly apparent, that Corona will also have a medium-term impact on demand behavior. For instance, consumer preferences also seem to diverge more along age segments: On the one hand, the younger consumers are directing towards omnichannel shopping, where even fluctuating prices are not a major problem. And on the other hand, the older consumers prefer in-store shopping and have a strong desire for stable and reliable prices”, summarizes Prof. Dr. Andreas Krämer, CEO of exeo Strategic Consulting AG and professor at the University of Applied Sciences in Iserlohn as co-author of the OpinionTRAIN study.

When it comes to the future of motorized mobility, everyone talks about the power drive: How much e-car, how much combustion engine can the environment tolerate and how much do people need? At the same time, new powertrains place ineased demands not only on the engine, but also on its housing and the car body: Carbon fibers are often used for such demanding applications. Like the powertrain of the future, the materials on the vehicle should also be environmentally friendly. That is why recycling of carbon fibers is required. Institutes of the Zuse Community have developed solutions for this.

Carbon fibers consist almost completely of pure carbon. It is extracted from the plastic polyacrylonitrile at 1,300 degrees Celsius, using a lot of energy. The advantages of carbon fibers: They have almost no dead weight, are enormously break-resistant and sturdy. These properties are needed, for example, in the battery box of electric vehicles in structural components of a car body.

The Saxon Textile Research Institute (STFI), for instance, is currently working with industrial partners on combining the static-mechanical strengths of carbon fibers with vibration damping properties to improve the housings of electric motors in cars. The project, which is funded by the German Federal Ministry for Economic Affairs and Energy, is aimed at developing hybrid nonwovens that contain other fibers, in addition to carbon fiber, as a reinforcement. "We want to combine the advantages of different fiber materials and thereby develop a product that is optimally tailored to the requirements", explains Marcel Hofmann, head of department of Textile Lightweight Construction at STFI.

The Chemnitz researchers would therefore complement previous nonwoven solutions. They look back on 15 years of working with recycled carbon fibers. The global annual demand for the high-value fibers has almost quadrupled in the past decade, according to the AVK Industry Association to around 142,000 t most recently. "Increasing demand has brought recycling more and more into focus", says Hofmann. According to him, carbon fiber waste is available for about one-tenth to one-fifth of the price of primary fibers, but they still need to be processed. The key issue for the research success of recycled fibers is competitive applications. STFI has found these not only in cars, but also in the sports and leisure sector as well as in medical technology, for example in components for computer tomography. "While metals or glass fibers cast shadows as potential competing products, carbon does not interfere with the image display and can fully exploit its advantages", explains Hofmann.
 
Using Paper Know-How
If recycled carbon fibers can pass through the product cycle again, this significantly improves their carbon footprint. At the same time it applies: The shorter the carbon fibers, the less attractive they are for further recycling. With this in mind, the Cetex Research Institute and the Papiertechnische Stiftung (PTS), both members of the Zuse Community, developed a new process as part of a research project that gives recycled carbon fibers, which previously seemed unsuitable, a second product life. "While classic textile processes use dry processing for the already very brittle recycled carbon fibers in fiber lengths of at least 80 mm, we dealt with a process from the paper industry that processes the materials wet. At the end of the process, in very simplified terms, we obtained a laminar mat made of recycled carbon fibers and chemical fibers", says Cetex project engineer Johannes Tietze, explaining the process by which even 40 mm short carbon fibers can be recycled into appealing intermediates.

The resulting product created in a hot pressing process serves as the base material for heavy-duty structural components. In addition, the mechanical properties of the semi-finished products were improved by combining them with continuous fiber-reinforced tapes. The researchers expect the recycled product to compete with glass-fiber-reinforced plastics, for example in applications in rail and vehicle construction. The results are now being incorporated into further research and development in
the cooperation network of Ressourcetex, a funded association with 18 partners from industry and science.

Successful Implementation in the Automotive Industry
Industrial solutions for the recycling of carbon fiber production waste are being developed at the Thuringian Institute of Textile and Plastics Research (TITK). Several of these developments were industrially implemented with partners at the company SGL Composites in Wackersdorf, Germany. The processing of the so-called dry waste, mainly from production, is carried out in a separate procedure. "Here, we add the opened fibers to various processes for nonwoven production", says the responsible head of the department at TITK, Dr. Renate Lützkendorf . In addition to developments for applications e.g. in the BMW i3 in the roof or rear seat shell, special nonwovens and processes for the production of Sheet Molding Compounds (SMC) were established at TITK. These are thermoset materials consisting of reaction resins and reinforcing fibers, which are used to press fiber-plastic composites. This was used, for example, in a component for the C-pillar of the BMW 7 Series. "In its projects, TITK is primarily focusing on the development of more efficient processes and combined procedures to give carbon fiber recycling materials better opportunities in lightweight construction applications, also in terms of costs", says Lützkendorf. The focus is currently on the use of CF recycled fibers in thermoplastic processes for sheet and profile extrusion. "The goal is to combine short- and continuous-fiber reinforcement in a single, high-performance process step."

1) Since February 1st, 2021, Dr.-Ing. Thomas Reussmann succeeds Dr.-Ing. Renate Lützkendorf, who retired 31 January.

Ethical consumption seems to have arrived at the center of society. 70 percent of respondents in the current trend study state that ethical criteria have become a fixed component of their purchasing decisions. 82 percent are in favor of a longer product life and greater material efficiency. And 63 percent are now even willing to bear the additional costs for climate-neutral products. The Otto Group's fifth Trend Study 2020 on ethical consumption formulates provocative theses that encourage rethinking and a new fresh view on the post-Corona world. 

The trend towards ethical consumption has been observed for many years. Meanwhile, the focus of consumers has changed significantly. They no longer just want to do something good for themselves, they increasingly want to make a difference for others with their consumption. This has noticeable consequences for companies now, because those whose business activities demonstrably harm the environment and nature are finding it increasingly difficult to compete. Companies that do not share the values of their customers, which they believe in and hold on to, quickly lose the trust of their customers. And those who evade their responsibility for the common welfare, are sometimes even boycotted.

"The demands for sustainable changes in our economic system to politics and companies, and the willingness to take responsibility have reached the center of society," says the head of the study, Prof. Peter Wippermann of Trendbuero.

Key results of the current 2020 trend study include:

Ethical consumption becomes mainstream
For 70 percent of Germans, ethical criteria have become an essential part of their purchasing decisions. 20 percent of the respondents even say that they buy more consciously according to ethical criteria since the Corona crisis. Corona has led many people to rethink; purchasing decisions better thought-out, check whether they are necessary they seem to be taking on a different significance in the lives of individuals.
 
The throwaway society is becoming a discontinued model
82 percent of those surveyed are prepared to join the path from a throwaway society to a circular economy, and they are in favor of longer product lives and greater material efficiency. In addition, 63 percent would bear the additional costs for climate-neutral products. Here, too, is a change in the attitude of consumers, who appear to be increasingly willing to pay for the emissions they cause.
     
Sharing and second-hand are trending among consumers
The study shows that 73 percent of respondents think it is good to buy or sell used things such as worn fashion or old furniture. 54 percent of respondents even plan to borrow more in the future. While in 2013 52 percent of respondents were willing to share, swap, borrow or buy used things, by 2020 this figure had already risen to 64 percent.

Consumers increasingly recognize the limits of unbridled growth
70 percent of those surveyed foresee serious difficulties for people and the environment if we continue to consume without restraint. 77 percent of Germans are in favor of industrialized countries taking on more responsibility in the fight against climate change and providing more support for poorer countries. 60 percent can now imagine paying the true costs of environmental pollution and climate change when making purchases. These results suggest that the importance of ethical consumption has not only been established in the people’s minds, but there is also an increasing willingness to dig deeper into their pockets for it.

Politics should set the framework for more ethical consumption
There is also a turnaround in the question of who should ensure more ethical consumption. 41 percent of Germans consider politics to be the driving force behind ethical consumption, 23 percent the economy and 22 percent each individual. In 2011 and 2013, only 27 percent of respondents thought that politicians should be held more accountable for this.

It is also interesting to note that the issue of consumer responsibility continues to grow: 70 percent of all respondents say that ethical criteria are now an essential part of their purchasing considerations. In 2013, the figure was only by 63 percent. Baby boomers (born up to 1964) in particular are pushing the purchase of ethical products. While in 2013 it was 65 percent who bought ethical products more often, by 2020 79 percent were already purchasing according to ethical criteria more frequently. Also interesting: 68 percent of those surveyed would boycott a supplier that behaves unfairly toward its employees and creates poor working conditions.

Alexander Birken, Chairman of the Executive Board of the Otto Group: "The question of whether our way of living and doing business needs to be adjusted is being asked more and more loudly. At least, this is confirmed by the results of this fifth trend study. We in the Otto Group want to make a difference, because it has been our belief for generations that, in the end, the economy must serve the people, not the other way around. However, to achieve this, we all have to change. Away from the throwaway society, toward sustainable and recyclable products, and a resource-friendly production method in which human rights are regarded higher and in which respect and mindfulness toward nature take on a new significance."

For the study, the results of a survey of 1,149 Germans between the ages of 14 and 74 from October 2020 were combined with perspectives based on trend research.
Download (only available in German)

Things can only get better

At the turn of the year, the German Economic Institute (IW) traditionally asked German associations about their economic expectations for the coming year. Most industries are reporting incisive difficulties and are hoping for an improvement in 2021. However, many companies will cut jobs - especially where there were have been already problems before the pandemic started.

At the end of the year, the German economy looked back on one of the most difficult years in recent history. The Covid-19 pandemic already hit many companies in spring 2020, and the current winter and the second wave have put struggling sectors under further strain. It is still not possible to predict when the situation will noticeably improve. This is also reflected in the traditional IW association survey: 34 of 43 associations interrogated reported a worse economic situation than the year ago. Those reporting an improved or unchanged position were often already in a difficult economic situation in the previous year. These include, the automotive and chemical industries respectively.

Four out of five companies in Germany at the turn of 2020/2021 judge the mood even worse than a year before. This crisis-prone initial position partly explains in general optimistic business expectations for 2021. According to the IW’s association survey, higher economic activity is expected in 26 of 43 sectors. By contrast, 13 associations expect a decrease in production in 2021. While there is a moderate recovery in investments overall, employment is expected to decline further in 23 sectors.

Looking ahead to 2021, the IW Association Survey is dominated by confidence. This is not surprising understanding this confidence as an improvement on the crisis year 2020. The expected increases can be explained having the massive drop in view as well as a poor starting point in 2020. For a number of companies and entire industries, this hopeful outlook for 2021 does not necessarily mean a return to pre-crisis production levels. The IW business survey with more than 2,200 companies conducted in November 2020 consistently shows, that around half of the companies surveyed still expect shortfalls in production by 2022 compared to the pre-crisis level (IW Research Group Macroeconomic Analysis and Business Cycle, 2020).

Textile industry and banks particularly pessimistic
After all, most associations are confident with a view to 2021, expecting their situation to improve - although the pre-crisis level is not yet in sight for many sectors. 26 associations are planning increased production for the coming year. 13 associations - including shipbuilding and marine technology, textile and fashion associations, and the food industry - predict lower production. Banks and construction companies also have subdued expectations for 2021, although the pandemic has had relatively little impact on these industries up to now.

Less jobs in the automotive industry
The outlook for the employment market is less optimistic: Only five of 43 associations surveyed expect their member companies to employ more people in the coming year. This includes the construction industry and handicraft businesses, which already suffered from a shortage of skilled workers before the crisis. 23 associations expect a reduction in employment, especially for industrial site. Particularly pessimistic are associations with member companies facing structural adjustment burdens in addition to the corona pandemic – like in the area of finance:

In the previous years, fewer and fewer customers used branches of banks. The automotive industry is also planning with fewer employees: In addition to the weak global economy, are strict exhaust emission limits and quotas for electric mobility put companies under pressure. Exports, which are extremely important for the industry, decreased by a similar amount.

The few industry associations whose members - on average across all enterprises and subsectors - are in the same or better position than at the previous turn of the year, are often sectors that were already in a difficult economic situation at the turn of 2019/2020. The automotive industry, segments of the metal and electrical industry as well as the chemical industry point to this. The Covid-19 crisis already records a negative history for parts of the industry. 2019 the downturn in business was partly the result of a cyclical normalization after a phase of high capacity utilization. Above all, protectionism and geopolitical uncertainties weighed on global investment activity, and hit the German industry, which is heavily involved in the international capital goods business. Technological challenges - due to digitization and climate change for example - also created adjustment burdens.

Interview with Claudia Bitzer, Owner Bitzer PR, Albstadt

The past year was not only a big economic challenge for many companies, but also in terms of communication - whether in advertising or in PR topics - new ground had to be broken. Contact restrictions up to a strict lockdown, the cancellation of many trade fairs, congresses or other event formats made it necessary to rethink.

Textination discussed it with Claudia Bitzer, owner of the PR agency of the same name in Albstadt, Baden-Württemberg. Her customers include medium-sized companies from the textile and clothing industry as well as machinery manufacturers, public clients and the media.

With your PR agency based in Albstadt, you have also been busy in the textile industry for a good 5 years. If you had to introduce yourself in 100 words to someone who doesn't know you: Why did you decide to become your own boss after working for an agency, and what distinguishes your work?
Actually, self-employment gave me a call: An acquaintance suggested that I take over the communication for his employer, a textile machine manufacturer in the Alb, as a freelancer. When I was on the phone, I had our ten-day-old son in my arms. I was also a PR consultant at Ketchum in Stuttgart. Because I was curious, I got to grips with the matter over the next few months. With success: The textile machines have turned out to be surprisingly tangible products, after all, they make the clothes that we wear on our bodies every day. From this my access to the textile industry developed, which I would call my home base today.

Because I serve various companies along the textile chain, I have an overall view of the industry and can offer overarching stories with different perspectives. I also have a weakness for complex, "dusty" topics, regardless of the industry. I can delve in them with devotion in order to present them vividly. That's why I would call myself a content specialist.

In addition to German, English, Spanish and French, you speak Swabian fluently. Why is it important to have regional roots when you work for export-oriented companies in the textile industry in Baden-Württemberg?
You got that about fluent Swabian from my website, right? (Laughs) But yes, it is very helpful if you can feel whether "gschwind" – Swabian for “pretty fast” - tolerates a delay or has to be dealt with immediately.

I think the Swabian is really important in terms of the mentality behind it. I grew up in the Alb, my father ran a medium-sized company of his own. I understand many things without a customer having to explain them to me.

For example, modesty in relation to one's own person. Especially in long-established family businesses, the owners play an important role. They bear a great responsibility, both in the company and at their location. Nevertheless, the focus is always on the entrepreneurial performance, the product that, manufactured somewhere in the Swabian province, can keep up with the German, European or global competition. That doesn't happen by itself, but requires courage, entrepreneurial spirit and a great deal of openness to new things, and that fascinates me. I also often notice that by the passion, that these leading family businesses bring with them, I am carried away.

Breaking new ground means being willing to make decisions, overcoming fears - and thus also having the courage to fail. Not every project can succeed. In retrospect, which entrepreneurial decision are you particularly glad to have made?
Apart from being self-employed? The first corona lockdown with home schooling and closed daycare centers was a big challenge. On the one hand, I was relieved that it became quieter on the customer side between the end of March and the beginning of June, otherwise it would not have been feasible either professionally or in terms of family. On the other hand, this silence scared me and I often asked myself whether self-employment was the right way to go.

In early summer, when the situation on all sides had stabilized somewhat, I tackled the problem head on: I looked for co-working spaces and took extensive further training in online marketing. Being honest, of course, these were business decisions. Fortunately, they are already paying off, even if I may sit alone in the office for now.

Is there any work you are particularly proud of? Which story moved you beyond normal and which thematic challenges do you love?
One project that I fondly remember is the communication referring to a repdigit anniversary one of my clients was celebrating. For this, I first put 111 years of the company’s history down on paper in weeks, no, months of archive work. Because I had delved so deeply into the subject, I came up with many ideas for the messages of the anniversary celebration. Fortunately, the client was quickly convinced. At some point we had a signet, a slogan and a really good story for the anniversary. Incidentally, we still benefit from the numerous proof points we worked out for the occasion in our product and corporate communications today.

In addition, the project has naturally deepened the relationship with this client. I also work closely with the advertising agency that accompanied the anniversary communication. I consider such long-term partnerships as a great asset.

Have the messages you want or need to communicate for your clients changed in Corona times? And what was the focus of your work in 2020?
Unsurprisingly, the focus of work in 2020 was on online communication. For almost all of my customers we will start planning and implementing new measures in this area in the coming year.

As for the messages, little has altered. This is certainly due to the fact that the meta-topics have remained the same. Take sustainability, definitely a long-running favorite in the textile industry, and the sub-topic regionality. In contrast to previous crises, the Corona pandemic has not sidelined these approaches, but intensified them because it has shown us how dependent we are on production abroad. The same applies to the issues of transparency and quality.

Precisely because the themes have stayed the same, the crucial part for me is to find a unique story within these permanent themes so as not to disappear into the big river. That requires empathy, creativity - and a good portion of diligence.

Moving away from the simple advertising message to storytelling - what recommendation would you give medium-sized companies in general regarding their communication for the coming year? Are there any special features that the textile industry in particular should consider?
I think that will go in the direction of "We are still there, and even stronger than before". After all, the crisis demanded a lot from everyone. But it is always a productive phase, because when it comes to a head, it forces us to develop further that otherwise would not have been initiated or at least would have been initiated later. Therefore, it can represent a turning point, definitely for the better.

Take digitization, which is the most obvious approach: the crisis has given rise to a boost in this area; the online shop was or is to be expanded, the service is to become more digital.

Apart from that, there are certain individual changes in every company that the crisis has brought about. You can have the courage to name and tell them, because these are stories that interest everyone.

Goodbye Facebook - good morning TikTok. Which social media platforms do you recommend to your clients and under what conditions should medium-sized companies get involved?
TikTok has so far been more of a topic that I discuss with my daughter, who is almost 12 years old. But seriously: I recently read in a study published by Hootsuite that at the beginning of 2020, less than ten percent of Germans were using TikTok. On Facebook, the user share is still over 60 percent. For that reason alone, we shouldn't simply dismiss Facebook.

When I discuss the topic of social media with my clients, it is important for me not to think from the channels. Sure, it's tempting, but other questions should be asked at the beginning: What is the long-term goal of the social media activities? What resources are available - and what budgets? By now it is well known that social media is an extensive field of activity in its own right, which ties up corresponding resources. In medium-sized businesses, where I rarely have access to a multi-headed marketing team, a solid strategy is the be-all and end-all. It must be very, very clear which target groups are to be addressed. Then I can talk about channels and choose the most important ones. This almost certainly includes LinkedIn and Xing, as well as Instagram and Facebook, the latter especially in an international environment. By the way, the evaluation is just as important, it tends to fall behind. The relationship between measured values and corporate goals is anything but trivial.

Trade fairs, events, press conferences and meetings - these have almost completely fallen by the wayside in 2020. How important do you consider face-to-face communication to be in the long term, and which channels and measures do you recommend to your customers to compensate for these losses?
Face-to-face contact remains important! Of course, we all realised last year that not every event has to be a face-to-face event. A video conference saves time and money and, with the right discipline, can be just as effective as a face-to-face meeting. Many service cases can also be solved by video telephony, no one has to travel around. I am therefore convinced that we will not return to the meeting in person culture we had before Corona, even if this will be possible again at some point.

That's why I advise my clients to take advantage of the digital opportunities that are opening up everywhere. At the moment, everyone is still a beginner, you can only learn. Take virtual trade fairs: This is a fundamentally different approach than the classic presence fair. There is no need for a large trade fair team that is ready from 6 a.m. to 8 p.m. There are no press appointments either. It is much more important to contact the visitors directly, i.e., to collect leads, to group the visitors and to stay in touch with them after the event by providing them with tailor-made content. Speaking of content: at the latest with such online events, it becomes clear how diverse content must be prepared. To pick up customers in the virtual space, you need graphics, videos, animations and much more.

Nevertheless, it will not work without direct, physical contact. I remain convinced that people buy from people. Video conferences work particularly well when the participants already know each other from real life. And the textile industry in particular thrives on haptics. I can never feel a yarn or a fabric digitally. Nor can I feel the production speed of a machine. With every revolution there is a slight breeze. You can't get that digitally.

 

The interview was conducted by Ines Chucholowius, CEO Textination GmbH

Since 2019, the Messe Frankfurt Texpertise Network has been working with the Conscious Fashion Campaign and the United Nations Office for Partnerships to bring the Sustainable Development Goals to all 58 textile events in the network worldwide. Numerous measures have already been implemented. Others are imminent.

Shortly before the start of the COVID-19 crisis, the UN Secretary-General Antonio Gutérrez hailed the start of the Decade of Action. As of 2020, the international community now has just ten years to achieve the 17 Sustainable Development Goals (SDGs) to which the UN Member States committed themselves in the 2030 Agenda. As part of the collaboration with the Conscious Fashion Campaign and the United Nations Office for Partnerships, the Messe Frankfurt Texpertise Network will put the SDGs on the agenda of additional events in December, thus further supporting their implementation in the fashion and textile industry.

Virtual event “Discover the SDGs – To Power the Decade of Action”
From 1-30 December 2020, the Texpertise Network is taking part in the virtual learning experience “Discover the SDGs”, which was initiated by the Conscious Fashion Campaign in collaboration with the United Nations Office for Partnerships. The aim of the event is to strengthen the knowledge and commitment within the fashion industry that is needed to further support the Decade of Action to deliver the Sustainable Development Goals. One component of the event is a virtual and interactive exhibition on the 17 goals, as well as on-demand discussions with industry leaders, United Nations representatives and advocates of the United Nations, including Detlef Braun, Member of the Executive Board, and Thimo Schwenzfeier, Director Marketing Communications Textiles and Textile Technologies at Messe Frankfurt, as well as from Kering, Lenzing, Allbirds, Arch and Hook, Artistic Milliners, Orta, ITL, Vogue Business, CFDA, Collina Strada and the Swarovski Foundation.

“This is a critical time to accelerate partnerships to address the world's biggest challenges – from eliminating poverty, hunger and inequalities to reversing climate change and unsustainable consumption and production practices,” said Annemarie Hou, acting Executive Director of the United Nations Office for Partnerships. “The fashion industry is an important ally for the United Nations in this Decade of Action to deliver the SDGs by 2030.”

Conscious Fashion Campaign becomes a presenting partner of Frankfurt Fashion Week
Joining forces to improve the fashion industry: Frankfurt Fashion Week is positioning itself as the host of the future of fashion and actively driving forward the transformation towards a future-oriented, more sustainable fashion and textile industry. All decision-makers looking to instigate this change will be coming together in Frankfurt am Main from 5-9 July 2021. The initiators of Frankfurt Fashion Week – Messe Frankfurt and the Premium Group – have achieved a real coup: Conscious Fashion Campaign, working in collaboration with the United Nations Office for Partnerships, will be the presenting partner. Messe Frankfurt will build on its collaboration with the United Nations Office for Partnerships. The Sustainable Development Goals (SDGs) will be a prerequisite for exhibitors by 2023. And the Frankfurt Fashion SDG Summit by CFC is set to become the leading international conference for sustainability in the fashion world.

Expansion of internal sustainability communication
17 goals, 58 textile events worldwide, around 600,000 visitors and 23,000 exhibitors in 2019: with its global events, the Messe Frankfurt Texpertise Network offers unique reach for supporting the SDGs, even during the corona pandemic. The participating subsidiary companies, sales partners and Messe Frankfurt partners abroad who organise the relevant events play an important role in this. To actively expand knowledge about and further commitment to the Sustainable Development Goals, the Texpertise Network is organising several online seminars, including for staff members in Argentina, Ethiopia, China, Hong Kong, India, Japan, Russia, South Africa and the USA and thus expanding its internal sustainability communication.

SDG actions up to now
Ever since the expanded collaboration between the Messe Frankfurt Texpertise Network, the Conscious Fashion Campaign and the United Nations Office for Partnerships was announced at the UN headquarters in New York in December 2019, the international Messe Frankfurt textile events have implemented numerous measures to support the SDGs.

At the Messe Frankfurt textile events in Germany alone, a number of things came to fruition: the most recent physical and digital editions of Heimtextil, the leading trade fair for home and contract textiles and Neonyt, global hub for fashion, sustainability and innovation, offered panel discussions, press conferences and video messages, including with the Conscious Fashion Campaign and United Nations Office for Partnerships. An SDG Lounge in the Green Village at Heimtextil and selfie walls with the SDGs inspired exhibitors, visitors and influencers alike to engage with the 17 goals and share them on their social network channels. Podcasts were produced that can still be listened to on the Neonyt and Heimtextil channels and Neonyt also hosted e.g. the influencer challenge “Let's wear the goals!”.

A great deal has also already been achieved internationally: in March 2019, Neonyt organised a showcase with selected Neonyt brands to mark the foundation of the “UN Alliance for Sustainable Fashion” in Nairobi. Techtextil India launched Techtextil NEXT at its 2019 edition, India’s first hackathon for technical textiles and sustainability. Among those who attended were Shrikar Dhole, founder and CEO of the SDG Foundation and Niharika Gautam, who campaigns for the achievement of the SDGs in the fashion industry and co-leads the fashion section of the All Ladies League Delhi. The Heimtextil Russia 2020 Digital Edition was able to attract a prominent figure to give a message of greeting, namely Vladimir Kuznetsov, head of the UN Information Centre (UNIC) in Moscow. The digital edition of Texworld USA (now Texworld New York City) and Apparel Sourcing USA in summer 2020 offered a talk by the Conscious Fashion Campaign and supported the production of a podcast with Claire Kells from the UN Global Compact.

With its SDG actions to date, Messe Frankfurt Texpertise Network is estimated to have reached around 146,000 visitors, 170,000 followers on social media channels and 65,000 subscribers to newsletters about participating events at home and abroad. Added to this is also the approx. 2.5 million followers of the influencers involved in the actions.

The recently launched 6.1 million Euro project INNO4COV-19, funded by the European Commission (grant agreement no. 101016203), will support the marketing of new products to combat COVID-19 over the next two years, throughout Europe. The Fraunhofer Institute for Organic Electronics, Electron Beam and Plasma Technology FEP is contributing its know-how in sterilization using accelerated electrons and on near-to-eye visualization.

The €6.1 million project INNO4COV-19 is committed to supporting the commercialization of new products across Europe for combatting COVID-19 over the next two years. Looking for the fast development of products – from medical technologies to surveillance solutions - the project will boost innovation to tackle the new coronavirus, reinforcing Europe's technological leadership, and invigorating an industrial sector capable of protecting citizens' safety and well-being.

Officially starting on October 1, the virtual kick-off took place on October 6 – 7, counting with the support of two European Commission officers.

The 11-partner consortium led by INL – International Iberian Nanotechnology Laboratory, is looking for efficient and fast solutions that can help in the fight against COVID-19 jointly with the other actively involved industrial and RTO partners.

The mission of INNO4COV-19 is to create a “lab-to-fab” platform and a collaboration resource where companies and reference laboratories will find the tools for developing and implementing innovative technologies – from idea assessment to market exploitation. This work will be carried out as part the European Union Coronavirus initiative and in strong collaboration with all the funded projects where to accelerate the time to market for any promising product.

INNO4COV-19 is set to assist up to 30 test cases and applications from several areas spanning from Medical technologies, Environmental Surveillance systems, Sensors, Protection of Healthcare workers and Artificial Intelligence and Data mining. To achieve this, INNO4COV-19 is awarding half of the budget to support 30 enterprises selected through a set number of open calls during the first year of the project.

The first call will be launched in November 2020 across several platforms. Awardees will receive up to €100,000 each and benefit from the INNO4COV-19 consortium's technical, regulatory, and business expertise.

Roll-to-Roll Equipment and Electron Beam Technology for Large Area Sterilization of textile materials
During pandemic events like COVID-19, MERS, SARS or Ebola a substantial shortage of sterile materials for medical uses was observed due to peak demands. Fraunhofer FEP will contribute their roll-to-roll equipment and electron beam technology for the purpose of large area sterilization of textile materials to the INNO4COV-19 project.

Usually the textile material is produced in non-sterile conditions and therefore must be sterilized before being delivered to the consumers (e. g. hospitals); Sterilization at product level (sterilizing the final manufactured masks) is limited in throughput, due to a high number of individual small pieces, that must be sterilized.

Project manager Dr. Steffen Günther of Fraunhofer FEP explains the role and aims of the institute in more detail: “INNO4COV-19 will establish and verify a process chain for high throughput (4500 m²/h) electron beam sterilization of fabric material in roll-form in a single TRL 7 pilot machine to allow efficient manufacturing of sterile face masks and other fabric based sterile products without the need to sterilize the final product.”

OLED Microdisplays for Detecting Infected People
Another topic of Fraunhofer FEP within INNO4COV-19 deals with the earliest possible detection of infected people. A widely used strategy to early identify individuals with disease symptoms is body temperature screening using thermal cameras.

One possibility to allow continuous body temperature monitoring, is the integration of a thermal camera into a smart wearable device. Therefore, Fraunhofer FEP is using their OLED microdisplay technology. This allows small (< 3 × 2 cm²), ultrathin (< 5 mm including control circuitry) and ultra-low power (< 5 mW) devices to show visual information. In combination with an infrared sensor a thermal imager will be realized to both measure body temperature and directly displays the result via near-to-eye visualization. The system can be embedded within smart glasses, hats, caps or personal face shields.

About INNO4COV-19 project:
Website: www.inno4cov19.eu
Please contact: info@inno4cov19.eu

 

The ongoing, difficult situation surrounding COVID-19 and the latest decisions made by the German government are once again making it impossible to plan Neonyt – and as a result, the physical event, from 19-21 January 2021, will no longer be taking place. A small consolation: the digital community format “Neonyt On Air” will be entering into its second round instead.

After the COVID-19 situation eased in many places towards the end of summer and contact rules and travel restrictions were eased or lifted completely, the entire sector, and therefore also the trade fair and event industry, were looking ahead to a new start: “It wasn’t exactly “business as usual”, but we were hoping that there wouldn’t be a second lockdown,” says Olaf Schmidt, Vice President of Textiles & Textile Technologies at Messe Frankfurt. “But this is precisely the scenario we are faced with now and of course had to make a decision to protect the health and safety our exhibitors, visitors and also our employees.” Due to rapidly increasing infection rates and the latest decisions made by the German government, the organisers have been left with no choice but to cancel the winter edition of Neonyt.

But the sustainability community doesn’t have to forgo Neonyt completely. “The need of our exhibitors and visitors to interact and cooperate in person has only increased during the past few months,” says Thimo Schwenzfeier, Show Director of Neonyt. “A need that, after a forced one-year break, we would have loved to fulfil with a face-to-face event, but now we are having to do that virtually and in a reduced form.” Like last summer, January will see the return of the digital “Neonyt on Air” format – in numerous talks, panel discussions and masterclasses the community will be discussing the latest developments and innovations from the sustainable fashion and textile industry in the week from 18-22 January 2021. Further information about the line-up will follow on the Neonyt website and in the newsletter in the coming weeks.

The exhibitors’ order business has also been taken into consideration in the modified plans: thanks to Neonyt’s cooperation with B2B marketplace The Brand Show Circular, brands will have the opportunity to position themselves in an international order setting, maintain existing business contacts and acquire new customers – despite contact and travel restrictions. The digital services of the B2B platform range from classic marketing and order activities down to virtual showrooms with multimedia content. Interested exhibitors have already been informed in Page 2 Neonyt The global hub for fashion, sustainability and innovation Neonyt On Air, 18-22 January 2021 detail about the terms and conditions of participation.

• New research shows business leaders at top fashion, retail and textile businesses are putting sustaina-bility drive first, despite COVID-19 pandemic
• The power of data in the effort to ‘go green’ is well recognized, but patchy performance suggests more access to better quality data needed to help turbocharge change
• Despite Covid-19, fashion leaders are confident that fast, affordable and sustainable fashion is realistic, with crisis seen as opportunity to recharge sustainability efforts 

New research reveals the extent of the global fashion industry's commitment to sustainability, despite the COVID-19 pandemic, with sustainability ranked as the second most important strategic objective for businesses in the sector .

The new research, from the U.S. Cotton Trust Protocol and the Economist Intelligence Unit (EIU), is like Puma, H&M and Adidas. Explored in a new report, ‘Is Sustainability in Fashion?’ the research comes at a time when the industry finds itself at a crossroads: whether to continue to invest in sustainability, or row back in light of the pandemic.

Sustainability is business critical, say fashion, retail and textile leaders  
In defiance of the pandemic, the new data shows that for many of the world's biggest brands, sustaina-bility is now business critical. The majority of fashion, retail and textile leaders surveyed (60%), named implementing sustainability measures as a top two strategic objective for their business, second only to improving customers’ experience (ranked first by 64%). This contrasts starkly with the fewer than one in six (14%) that listed 'rewarding shareholders' as a top objective.

Leaders report they’re introducing sustainability measures throughout the supply chain, from sourcing sustainably produced raw materials (65%), introducing a circular economy approach to their business and cutting greenhouse gasses (51% apiece) and investing in new technologies like 3D printing and blockchain (41%).  Overall, the majority (73%) were optimistic that sustainable, fast and affordable fash-ion is achievable.

Data matters
A key finding of the research is that data matters for sustainability. When asked what measures they were implementing today to be more sustainable, collecting data from across the business and in the supply chain to measure performance was listed at the very top of business leaders’ list of priorities by 53%, second only to developing and implementing an environmental sustainability strategy with meas-urable targets, favoured by almost six in ten (58%).

And data is not important for the immediate term only –  three in ten (29%) said the availability of relia-ble data holds the key to greater sustainability over the next decade, while almost three-quarters of industry leaders (73%) stated their support for global benchmarks and thresholds as an effective means of measuring sustainability performance and driving progress in the industry.

But data collection is patchy
However, although brands clearly recognize the importance of data, the research’s findings on data collection indicates that top fashion brands, retailers and textile businesses may find sourcing good quality data a challenge.

While business leaders report relatively high rates of data collection on supplier sustainability practices based on a survey of 150 leading executives from top fashion, retail and textile business across Europe and the US and interviews with leading brands (65%) and worker rights and workplace health and safety in the supply chain (62%), a significant proportion (45%) of businesses do not track greenhouse gas emissions across production, manufacturing and distribution of the products they sell, while 41% don’t track the amount of water and energy being used to produce the raw materials they source.

Looking to the future, over a quarter (26%) of respondents saw a lack of available, easily-accessible data as hampering collaboration on sustainability across the industry. As some respondents in interview pointed out, while collecting data could be hard it is important.  

Commenting on the findings, Gary Adams, President of the U.S. Cotton Trust Protocol, said: "It is clear that brands are faced with a challenge on driving forward their sustainability efforts. At the U.S. Cotton Trust Protocol we know that accurate, reliable data supports businesses in this work - providing not only the evidence to show hard work and progress, but the insight to drive further improvements. We pro-vide one of the most robust data collection mechanisms available for an essential material – cotton – for unparalleled transparency.”  

Partnership offers path to further progress
An additional key finding is that fashion, retail and textile business clearly cannot drive change in isola-tion: collaboration is needed. According to one respondent, from Reformation, this is already happen-ing. “We’re energized to see collaboration and cooperation across the industry and believe that will only increase over time.”

However, when it comes to external support to help guide that progress, business leaders do not nec-essarily perceive further regulation as the answer.  The UN Sustainable Development Goals (SDGs) and government regulation were each given equal weight in driving sustainability change, both cited by a quarter of respondents (24% apiece). Regulatory requirements were also ranked by only a third (33%) of the business leaders surveyed as being within the top three factors that will drive sustainability pro-gress over the next decade.  

Jonathan Birdwell, Regional Head of Public Policy and Thought Leadership, The Economist Intelligence Unit: “It’s clear from the survey results and our interviews with business leaders that the industry is committed to driving progress on its sustainability performance. We were particularly struck by the fact that sustainability is largely considered as pre-competitive – behind the scenes brands are sharing re-sources and lessons learned.”

The impact of Covid-19  
This determination on sustainability flies in the face of COVID-19 uncertainty, although when asked their view on the pandemic, just over half (54%) of respondents said they thought it would make sustainabil-ity less of a priority within the industry.

The U.S. Cotton Trust Protocol is a new initiative that sets a new standard in sustainably grown cotton. By working closely with growers, the U.S. Trust Protocol provides clear, consistent data on six key sus-tainability metrics, including GHG emissions, water use, soil carbon, soil loss, independently audited through Control Union Certification. For the first time, brands can access annualized farm level data and trace their cotton from field to 'laydown'.

Research based on quantitative survey of 150 executives in the fashion, retail and textile industry based in Europe and the United States undertaken by the Economist Intelligence Unit between 9th July and 28th July 2020. The survey was complemented by qualitative insight from interviews with ten professionals in the fashion and sustainability space.

• After the corona shock, European SMEs are showing very high levels of debt, a considerable deterioration in profitability in some cases, and insufficient capitalization
• The Covid-19 pandemic is particularly affecting small and medium-sized enterprises (SMEs) in France and Italy
• Compared to its European counterparts, German SMEs have come through the crisis relatively well so far
• Already before the crisis 20% "zombies" among Italian SMEs, in France 11%, Germany 10%  

In France and Italy in particular, the Covid-19 pandemic is taking a toll on small and medium-sized enterprises (SMEs): they are currently lacking financial resources totaling an estimated EUR 100 billion - despite the extensive economic stimulus packages and after the exclusion of so-called "zombie" companies. In Germany too, SMEs lacking around EUR three billion of financial resources for a sufficient recapitalization. In view of the lack of EUR 70 billion in Italy and around EUR 29 billion in France, however, the local SMEs are in a much better position. This is the conclusion of a recent analysis by the world's leading credit insurer Euler Hermes.

"European SMEs have a very high level of debt, significantly deteriorated profitability and insufficient capitalization," Ron van het Hof, CEO of Euler Hermes in Germany, Austria and Switzerland says. "In the medium term, this is a very bad combination for the solvency of these companies. In Italy and France in particular, Covid-19 is making the situation increasingly acute, even if the numerous economic stimulus packages have at least avoided a short-term liquidity crisis. German SMEs have once again proven to be relatively robust and have so far come through the crisis relatively well compared to their European counterparts."

In this country too, debt has increased as a result of numerous liquidity measures. In France in particular, however, it is almost twice as high in relation to gross domestic product (81% of GDP) as in Germany (43% of GDP). In Italy, the debt of 65% of GDP is above average also in a European comparison (average: 63%).

In terms of profitability, French SMEs are at the bottom of the European league
"French small and medium-sized companies are now at the bottom of the European league in terms of profitability, even behind Italy," Ana Boata, Head of Macroeconomics at Euler Hermes says. "The profitability of French SMEs has fallen dramatically by 7 percentage points (pp) since the beginning of the year compared to -0.6 pp in Germany. In Italy, we estimate that profitability has also fallen by up to 3pp^[1]. With 33%, the equity ratio in Italy is the lowest and thus well below the 40% that is generally considered as being adequate. Accordingly, Italy is the country where the greatest need for additional funding for recapitalization exists."

In France, the equity ratio of SMEs is 37%, while in Germany, at 39%, only slightly below the recommended capital adequacy level. In their analysis, the economists have already deducted such companies that were already practically unviable before the Covid 19 pandemic.

"A majority of medium-sized companies are proving to be very robust even in the current crisis, especially in Germany, Van het Hof says. "This fact, however, must not hide the fact that there are numerous zombie companies in their shadow in Europe - even before the Covid-19 pandemic. In Italy, for example, even before the crisis, around one-fifth of the SMEs were no longer economically viable, while in France (11%) and Germany (10%) only about half as many were known. However, this number is likely to have increased dramatically with the current crisis, as have the financing requirements of SMEs. The situation will be particularly tight for companies and sectors that had little buffer before the crisis."

In Germany, the equity ratio before the pandemic was particularly low in the transportation industry: in shipping it was around 32%, in aviation 29%. With Covid-19 the existing financing gap has widened again. In France and Italy, companies in the hotel and restaurant industry as well as in mechanical engineering and trade had particularly bad starting positions and therefore have the greatest need for capital now.

The complete study can be found here: https://ots.de/lYcKea 

^[1] Figures are currently available for Germany and France until H1 2020, in Italy only for Q1 2020. The decline in profitability of up to 3pp in Italy is an expert estimate.

Euler Hermes is the world leader in credit insurance and a recognized specialist in bonding and guarantees, debt collection and protection against fraud or political risks. Every day, Euler Hermes monitors and analyzes the insolvency of more than 80 million small, medium and multinational companies through its proprietary monitoring system. Overall, the expert analyses cover markets that account for 92% of the global gross domestic product (GDP).

Please read the attached document for notes regarding forward-looking statements.