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©2017 by WDA Brand Marketing Solutions.

Sustainability: What We Can Learn From Luxury Brands

March 16, 2016

[Recently republished in Sustainability Compendium,  a special edition from the publishers of Fibre2Fashion.]

 

Introduction: Conventional wisdom often concludes that Luxury is in conflict with Sustainability.  The argument usually proceeds as follows:

  • Luxury is indulgence, Indulgence is excess, Excess is anti-sustainability

  • Luxury sustains extremes in the unconscionable use of nature’s resources;

  • Luxury encourages inequality in wealth, fostering unneeded conspicuous consumption of  products and services in the quest for social status.

  • Luxury built upon social stratification, has little concern for workers rights.

 

How & Why Luxury is Pro-Sustainability
 

The above four arguments that Luxury is counter sustainability are based on both a misunderstanding of Luxury and supported by a confusion of luxury brands with other fashion oriented brands such as Zara and H & M for Fast Fashion, Fashion brands such as Tommy Hilfiger and Calvin Klein and Premium brands such as Michael Kors and Tory Burch.

 

First, there is a general misperception that Luxury is about self-indulgence and implying that those who participate in such consumption maybe of questionable character and perhaps more prone to  unethical behavior. The very origin of the word “Luxury” in Latin suggests this by viewing excesses in eating and drinking and other forms of consumption as pointing to one’s deficiency in character and therefore that such a  person  would be judged as self-serving and untrustworthy.

 

This perspective on Luxury was given credence by Thorsten Veblen’s classic work The Theory of the Leisure Class, where he coined the term’ “conspicuous consumption” which has found its way into our lexicon.  Although it served as a gateway to important sociological and psychological insights, Veblen’s theory was sometimes misunderstood to be a general indictment of Luxury and so become a generalized framework used by many to assess Luxury. This, unfortunately, contributed to the vision of Luxury as something negative.

 

However, to counter-balance this negative perception one need only begin by re-visiting Coco Chanel’s edict that “Some think that Luxury is the opposite of Poverty, but it is not, It is the opposite of Vulgarity” and by that she would likely respond if asked “What is vulgarity”? ” It is Excess” ( or the breaching of the boundaries which are required for good taste). “Excess” is the very malady we are facing in our environmental crises for which sustainability is the remedy.

 

Luxury as a culture is inherently well-suited to engage sustainability for the culture is built upon design simplicity, a natural restraint needed for creating elegance. This natural restraint is so much the cultural case, that when luxury houses are committed to and deeply immersed in sustainability initiatives, they have been unlikely to trumpet these accomplishments which is seen as self-promoting, excessive and therefore, unseemly for a Luxury house.  By their reluctance to incorporate their sustainability commitment into their brand narratives and public pronouncements, they contribute to the misperception. So, for example, how many of us know that LVMH has had an environmental charter since 2001 and has been tracking its carbon footprints since 2004! As we’ll see later in our discussion, this is changing.

 

The second misconception is that Luxury misuses nature by the use of exotic skins and expensive fabrics, a charge which is denied by the very culture of Luxury itself.

 

Luxury is the channeling of desires in pursuit of dreams.  It manages to offer this by maintaining the delicate balance between heritage and innovation the past and the future, the timeless and the imaginative.. For luxury brands, this innovation is less technological than it is aesthetic and as such it embraces beauty as a value and rarity as its pronouncement.

 

This association with rarity is a natural restraint upon the exploitation of nature’s resources which might violate and exhaust nature’s bounty.

So it isn’t what is exotic or expensive that drives the choices but what is artistically relevant in expressing the innovative idea.  In addition,  consumer ‘consumption” if we should use that word at all, is more and more about “collection” or symbolic consumption, including purchasing for heirlooms to be passed down from generation to generation rather than to be tossed away like disposal diapers.

 

Therefore there is a profound respect for what was created, what elements are in the  creation and from whence it came. These are continuously communicated to its consumers by Luxury’s brand guardians.  The brand’s values, which includes the process by which the product took form,  has become central to the brand purchase and the Luxury experience.

As Luxury is about a dream of timeless beauty and its rarity, Luxury has an interest in preserving both beauty and rarity and by extension, in preserving nature.  Consequently, ‘conspicuous consumption” is again a vulgarity, to use Mademoiselle Chanel’s word, which is alien to how Luxury markets and abides by its brand promise.

 

That some consumers choose to overcompensate by excessive displays of luxury in quest of social status is not what luxury asks but what egos require.  Social stratification, which  is found in almost every society on earth and the desire to belong to another perhaps higher class, is not something that Luxury has created.  Inequality, which may drive some to make purchases beyond their means, is an issue for Political Economy to resolve and to indict Luxury as a cause is tantamount to saying that food is to blame for obesity.

 

Failure to see this is because luxury is often confused with fashion and fashion is committed to obsolescence. Obsolescence is a euphemism for “waste” as each seasons collection, driven by passing trends,  is doomed in 15 weeks to be condemned  and swept into the dustbin of history. Fashion brands are trend driven; Luxury brand are trend drivers! Therefore, fashion brands and their business models are always to some degree in tension with sustainability.

Finally, as we seek to protect not only our environment but society in general, the existence of social classes does not preclude nor should it suggest an absence of abiding concern to not only protect but to honor those who have a hand in the making of  the final product.  Whether it is Luxury or Mass, someone worked to form the products we enjoy.  Anchored in heritage and focused on innovation, Luxury honors the craftsman and the artisan; it is in its DNA. Craftsman can still be seen at work in the most successful and well known luxury brands.

 

On the other hand, fashion brands committed to mass production and economies of scale, leads them to far away factories where the complexity and distance of the production process plays a role in workers being seen, more by default than by malice,  as extensions of the assembly line.  Therefore, an unintended consequence is that they are less likely to be subject to the humane considerations that sustainability demands.

 
Luxury’s Commitment to Sustainability

 

Among other Luxury Holding companies Kering ( St. Laurent, Gucci, Bottega Veneta and others in its portfolio) has hired a Chief Sustainability Officer Marie-Claire Daveau, who has been quoted as follows;

 

“The luxury industry has a particular responsibility because it sets trend and is open to innovation. Sustainability should be at our core.”

 

For Daveau and Pinault, the Kering Chairman, sustainability is not a marketing play but is a serious business strategy which requires specific business benchmarks.  So, for example, this year Kering is publishing its first ever ”Environmental Profit and Loss Report”…an actual P & L statement from the point of view of the environment.  In it are specific Key Performance categories to be benchmarked including the elimination of the use of  toxic chemicals in treating fabrics, an auditing of suppliers, standards for reducing CO2 emissions and systematic reduction of waste.  The degree of commitment can be seen in the fact that bonuses are linked to sustainability targets and the process and results of evaluation have been made open even to competitors!

 

Many other initiatives have been undertaken including the development of a program by Italy’s trade organization for luxury,  Camera Nazionale della Moda. Working with 10 major luxury brands in an unprecedented cooperation among them (these include Armani, Zegna and Versace for example) they are focused on the reduction of toxic chemicals in fabric treatments and devising from the reduction industry-wide standards.

 

Other luxury brands have made even more specific commitments for example Bottega Veneta and Gucci committing to” zero deforestation” in the creation of handbags and Tiffany and Chopard in jewelry signing on together to only buy “ethically mined gems”, with Chopard going even further with a commitment to using recycled precious metals especially gold to which Chopard has began the process of becoming entirely sustainable.

 

In an unprecedented creative embracing of sustainability, St Laurent is executing what has come to be called “Upcycling” by using fabrics from a season or two ago that been left over and designing some aspect of the collection which still captures the iconic or emblematic silhouettes of the house as a means of staying true to the brand while staying true to sustainability. 

 
Factors Driving Sustainability

 

So what is driving this wide swath of commitments to what Francois-Henri Pinault has termed” A New Norm”.  There is little doubt that the awareness begun by the general acceptance of the reality of Global Warming has had an impact. But besides this, there are certain socio-economic dynamics that are playing even a stronger role.  Here are three major ones:

  • The rise of consumer-centric brand management in part the result of the transparency and democratic accessibility of the world wide web and internet communications.  The shift from a marketing orientation to a customer solutions orientation in clearly in play here. Consumers are demanding responsible corporate policy.

  • The entrance of Millennials, that huge consumer segment which will be the next wave of consumers with a  significant impact upon the marketplace, with a value system that honors giving back and socially conscious brands.  Research has shown that this consumer cohort strongly prefer jobs in companies and  are more committed to being loyal to brands that  do more than pay lip service to the environment and to issues of social fairness.  Stated in a proactive manner, their belief system is that ” brands should be doing more good and not just less bad”

  • But perhaps the biggest shift “…is the rise in demand from investment communities for sustainable business models”  This include as evaluating performance based on how the brands conform to sustainability norms which not only impacts on credit ratings and the like but also directly on stock prices, market capitalization and brand valuations including buy and sell recommendations.

What Needs to be Done?

 

So what needs to be done to maintain and extend the momentum? What can luxury teach us here that can be a model for brands in all product and price categories?

  • Sustainability requires a cultural shift within the organization. This needs to be led by the CEO and should include the creation of a C-level executive position- a CSO- Chief Sustainability Officer- who reports directly to the CEO. Luxury has the good fortune to have the cultural values which provided the foundation for this organizational commitment. Yet all can follow their lead by  honoring the product and process by which it’s made, for this transcends product and pricing categories and can be embraced by all.

  • Industry wide benchmarks and norms needs to be established so there is one version of the sustainability truth.

  • There must be cooperation and transparency as to what is working or not as per the Kering examples we’ve discussed in this article.

Bill D’Arienzo is the founder of the Brand Management Certificate Program at the Fashion Institute of Technology (FIT) in NYC,  Associate Strategy Advisor for the US market for TEH Ambrosetti the # 1 think tank and global brand advisory in Italy.  His book, Strategic Brand Management: Luxury and Mass Markets will be published this summer by Fairchild Publications. Bill lives and works in Princeton NJ and in global markets and can be reached at bill@wdamarketing.com or on his mobile 609-577-5700.

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