Can today’s luxury industry create meaningful “eco-luxury” and “ethical-luxury” brands?
At the recent International Herald Tribune Conference on Luxury there was renewed attention directed to the creation of “eco-luxury” and “ethical-luxury” brands. These terms might seem like a stretch (or even oxymorons) to some, but luxury brands, which currently base their appeal on exclusivity, status and celebrity, can’t afford to ignore well-informed, well-off customers who demand higher standards of environmental and ethical responsibility. These customers are fast becoming vital markets.
Glitz and glamor isn’t enough
For today’s luxury brands, it will take some real work to fit “luxury” onto the same value platform as “ecology” and “ethical.” That’s because ecology and ethics are radically different avenues of value creation than glitz and glamor. Thus, the industry needs a revised brand approach to take this next step. The good news is that iconic luxury brands themselves hold the key to a successful transition.
The risk: luxury brands disrupted from below
What’s clear to me is that the luxury industry must take this transition seriously. If it can’t forge a deeper connection with the values that underpin environmental and social responsibility, luxury brands face a real threat of being disrupted from below—by a new form of luxury that uses ethics and ecology to make “traditional” luxury brands irrelevant.
The luxury industry has been totally transformed once, from small, family-owned workshops into a global marketing machine. There’s no law that says it can’t be transformed again.
Luxury brands don’t have the luxury of time
One thing is certain: luxury brands are on the clock. They don’t have the luxury of time to slowly and opaquely evolve their commitments to ethics and ecology. They are now being held accountable for their actions, just like the Gap’s, Nike’s and Levis’ of the world have been for decades. The world is waiting to see how passionate and creative luxury brands can be when the human condition and the environment are at stake.
A luxury scorecard
Shortly before the IHT conference a unit of the World Wildlife Fund published an in-depth social responsibility scorecard on the top ten publicly traded luxury firms, ranking them on 50 criteria in four categories: environment, human rights, corporate governance and stakeholder relations. The results were not pretty. The highest corporate grade was a C+ (received by three firms), while two firms received F’s. The full survey is worth reading. For a summary, see the Financial Times account.
The bottom line is that luxury firms, paragons of product quality and taste, must now become paragons of social responsibility. From brands of world-class excellence, one would expect no less.
Not a masquerade
Granted, it will take definite brand innovation for brands traditionally associated with self-indulgent elites to become brands of ecology and ethics. For luxury brands to gain credibility in these areas, their commitments (and actions) must be the real deal, not a masquerade. This would rule out commitments richer in words than deeds. If luxury brands appear to be faking their new commitments, they may be viewed as counterfeit, potentially falling to the same level as the shameless replicas that haunt their own business.
Let’s now see what the IHT conference produced.
“We need to replace hollow with deep”
From the IHT report:
The luxury industry, a booming business for the last 20 years, is positioned well for continuing spectacular growth – Bernard Arnault, chairman of LVMH, predicted a doubling in the next five years to €300 billion – but needs to heed the growing ethical concerns, particularly of younger consumers in Western markets, industry leaders said Wednesday.
Arnault and the next speaker, the designer Tom Ford, also gave strong emphasis to what is being called “ethical luxury” – the products that define their owners or wearers as people with human and ecological consciences.
Arnault said the trend was increasingly noticeable among the younger customers in the more saturated markets of the West, who, he said, seek discretion, while consumers in emerging economies still favor the pursuit of the ostentatious.
I especially liked this quote from Tom Ford:
Ford summed it up starkly: “Luxury is not going out of style. It needs to change its style.” He added, “We need to replace hollow with deep.”
A model for “going deep”
A brand that intends to demonstrate deeper commitments to social and environmental issues will be expected to adopt specific program measures to define and achieve its goals. These would answer the question: As a brand, how can we lead in the effort to advance ecological and social responsibility?
At a minimum, typical measures would include:
- A statement of principles, or a charter,
- Goals and objectives
- Codes of conduct for the brand and its suppliers
- Executive responsibility
- A means to work with customers, partners and suppliers to achieve the new aims.
These can’t be produced overnight, of course, but they’re needed to make ecological and ethical commitments a core component of the brand—so the brand can make a (legitimate) stand.
For now, a shallow start
The quotations cited above indicate that the luxury industry—as represented by those quoted—may initially intend to “go deep” by a succession of fairly shallow steps. The emphasis seems to be more on appearance than substance.
For example, it appears that “ecology” and “ethics” are being framed as style attributes to the brands themselves, rather than practices deserving real commitments for the companies behind the brands. It’s as if the products would be tweaked to represent ecology and ethics—using design, naming, creative promotions and associated campaigns—while the industry itself carries on with business as usual.
Is defining a “conscience” enough?
Thus, in this approach a luxury brand might feature “products that define their owners or wearers as people with human and ecological consciences.” On reading this quote, however, one rightfully asks: Is that what the industry commitment to ecology and ethics is all about? Is that what people want: products that make them look like they really care about ecology and ethics? The approach implies that the intended buyers are superficial, caring more for appearance than substance.
Two strategic weaknesses
At this initial stage, there are two strategic weaknesses in the luxury industry’s apparent approach. Both stem from making the brand a sales tool, rather than a means to create customers:
- Instead of joining with customers to help resolve outstanding ethical and ecological issues, the industry seems to be positioning itself to make buying luxury products a substitute for responsible social action. This raises doubts about the depth of its actual commitment, and its reliability as a brand partner.
- This apparent approach restricts luxury brands to a messaging model driven by media campaigns, as opposed to a value-based model in which the brand becomes a shared mission between company and customer, across many levels of interaction. The latter approach creates more platform opportunities for brand expansion.
Or, put another way, if the purpose of your brand is sales, your brand will sell you short. Sales-driven brands are not strategic; they lack the active customer components to discover new markets.
The key: invoke iconic brand integrity
Luckily, a strategic approach is well within the grasp of the luxury industry. The key is to invoke the brand integrity of its artisan founders, the integrity that made the brands the icons they are today.
Brands exemplify. The implicit pledge of every luxury brand is this: The closer you look, the better we look—by far. The luxury brand is the standard, and the steward, of the highest forms of living.
Yes, the luxury industry’s iconic brands can provide the direction and guidance it needs to successfully compete on social and environmental issues. Luxury brands were born in the passionate craftsmanship of master artisans. They epitomized the best that human hands and ingenuity could produce, without compromise. Those values defined the heritage of the brand, and its (uncompromising) brand integrity.
(Brand integrity: how a brand’s actions fulfill its identity, and its mission.)
The task at hand, then, is to scale the quality vision of the iconic luxury workshop to the wider world where luxury brands operate today.
Brand leadership—without compromise
Today the luxury landscape is global, but if luxury brands invoke the heritage of their provenance, they can extend their passion for excellence and quality to issues that affect their wider landscape, such as ecology and social responsibility. That’s precisely where a luxury brand would lead, and not make compromises.
Luxury brands reign as preeminent world citizens. From that stature one expects world-class craftsmanship, and citizenship.
Disrupting luxury brands from below
Luxury brands that lose touch with their iconic brand integrity place themselves at a strategic disadvantage. They may open the doors for competitors with more relevant brand platforms—platforms that may redefine the very concept of luxury itself. This new luxury could replace self-indulgence and store-bought status with a culture of “connected luxury” that aligns a carefully-crafted essence of the individual with an equally fine-tuned essence of his or her environment, both physical and social.
In this new realm, luxury is not for sale. It is a cultured result of issues, actions and things that are cultivated, nurtured, prototyped, tested, shared and worked on endlessly, face to face and in the digital atelier, aiming for completeness in quality of life.
Luxury networks
In this new luxury model there is no intent to compete directly with luxury conglomerates and their outlets in every major city and airport. Luxury is redefined as quality of life, not quality of marketing. This would be a global brand network, with customers at the hub, optimized to individual interests and tastes. This is not a network of “shoppers” but a network of brand collaborators.
Because they’re cultures, these new luxury brands are socially-driven, rather than marketing-driven. Of course, they start at the very bottom, like raw materials in the workshops of artisans. That is their key to innovation, and their strength.
