Mardi, 7 of septembre of 2010
Can you afford not to be concerned !
Learn from GUCCI, JAEGER-LECOULTRE, ROSY BLUE DIAMONDS, WWF, UNCTAD, HEC Lausanne University and many more luxury brands, NGO and Corporate Responsibility experts.
Join the leaders of the Sustainable Luxury community for a one day highly interactive workshop on September 28, 2010 in Lausanne/Switzerland, to learn, share, network and experiment among CR peers, NGO, Academia and experts.
Unique workshop.
Early Bird price until August 25, 2010.
The Luxury Report 2009, surveys conducted among affluent luxury consumers show that the culture is shifting and the lifestyle of luxury indulgence is no longer the American ideal. « Luxury consumers’ desire to do good and give back is a bellwether of more profound changes taking place in the luxury market, » Danziger says. « Luxury has lost its luster. Today luxury is synonymous with excessive indulgence, self-gratification, and an arrogant, wasteful lifestyle. Affluents who have much are giving back, doing good, taking concrete steps to make the world a better place. They claim that »When the current recession is over, the luxury market is going to be very different from the way it was before the current crisis. The next generation of affluent consumers are thinking about the impact of their consumption on future generations and learning that conspicuous consumption is not the way to grow wealth, to achieve happiness or to make their lives more meaningful. »
Can luxury brands afford not to be concerned by inequalities, wealth disparities, social exclusion ? Can luxury brand’s CEO and board afford to stay complacent ? Can they afford not to understand and address the needs of the new affluents ethical consumers ?
For luxury brands, the question is not « to make profit », but rather « how they make profit ». Sustainable luxury management goes behind cause related marketing or strategic philanthropy; of course worthy initiatives, but somehow questionable in the long run as not bringing any competitive edge.
If business means more to you than the bottom line; if you are ready to embrace or enhance the idea of sustainability. It’s time we talk.
Christopher H. Cordey
www.wholebeauty.ch – Prestige. People. Planet. Profit.
A great article from Katia Sambugaro.
1. Consumers and new values
Today, clients of luxury brands and their purchaising motivations are global. Historically, luxury consumers were preoccupied with “status” to show success and prestige; “pleasure” meaning the pleasure of reward; and “high quality” expected of a luxury product. However, new values are now emerging among HNWI clients.
1.1 The need for exclusivity
In order to increase profits, several luxury brands have, in recent years started to target a wider market by making their products less exclusive. For the same purpose, they have increased the accessibility of their wares so that the same product is available in any city, from Milan to Tokyo, and from Paris to Hong Kong. Increasingly, wealthier customers are now looking for unique, rare or custom-made objects. We started to see a change in the luxury market where, in contrast to its increasing opening to the mass, there emerged an elitism attached to traditional values such as craftmanship and custom-made products. Notable, for example, are Guccissima of Gucci and Louis Vuitton tailor-made items. In Italy more new concepts are emerging in the textile industry for men: in addition to prêt-à-porter suits, shops are increasingly offering a wide selection of fabrics to choose from when purchasing a tailor-made suit.
1.2 The need for transparency
Consumers are increasingly interested in knowing the history of the item purchased: how it was made, the techniques employed, the skills needed, and the materials used. A need for transparency, seems, therefore to be emerging. In particular, the country where the object was produced seems to be very important for all consumers, western and Asian, whether Generation X, Y or Baby Boomers. The perception of all consumers is that a luxury item not produced in Europe is of inferior quality. Proof of this is the Asian luxury market, where Asians are reluctant to purchase brands produced in Asia. The result is that trademarks such as Taiwan’s Shiatzy Chen, Blanc de Chine, Vivienne Tam and Shanghai Tang, who opened shops in London, Paris, Milan and New York, are not accorded the same stature and influence as the European brands.
1.3 The need for investment
Lately, luxury consumers have developed a greater awareness of the value of a product and prefer to purchase an object both as an investment or for the real value of the object. A recent study in the United States reveals that consumers expect a luxury product that is of superior quality, excellent craftsmanship and yet also consider that the price is higher than the value of the object. At any level, everyone is more cautious today, including art collectors, who now buy fewer works and are more selective. This trend has already changed the art market, particularly the market in Chinese contemporary art, which used to be the most popular and has now collapsed. In fact, at the end of 2008, several works of contemporary Chinese art, including those of Yue Minjun (famous for the record-breaking prices of his works at auction) were unsold and in February a dozen art galleries closed their doors in Beijing and Shanghai. This suggests that the meaning of what makes a piece of work interesting and valuable has been lost; the work actually becomes good because it is expensive, rather than expensive because it is good. Consumers who are reluctant to buy for themselves can justify a purchase because they view it as an investment. Quoting Robert Chavez, President and CEO of Hermès USA “Hermes’ sales of Birkin and Kelly bags are still on track, as consumers desire items that will last for several seasons. Although the bags cost around $5,000+ USD, consumers see these as valuable investments that will stand the test of time”.
1.4 The need for meaning
Another trend is the increasing awareness among consumers about the impact that the product has on society and the environment. This implies that the reputation of a brand will be increasingly evaluated on its performance as well as by the quality of its products and services. A January 2009 study by Ipsos showed how in this time of crisis some trends that began 3 years ago have now picked up; the consumer no longer accepts products without asking questions about the sustainability of resource consumption, environmental impact, and the origin and intrinsic quality of the product. The tendency to be more sensitive to ethical and environmental themes is increasingly evident in society. In fact, research tells us that consumers today buy more environmentally friendly, ethical and fair trade products, and they intend to do so even more in the future. Signs of growing interest by the luxury industry are also evident. We discovered that as a result of this, the first “Luxury Sustainable Fair” took place in Paris this year. Central to the event were the values of the luxury goods of tomorrow, such as rarity, ethics, know-how, heritage, respect and preservation of the environment. At Baselworld, we were able to attend the “Fair Trade Jewellery” conference and discover “responsible” jewellers. Further, “Under le Louvre”, an event organised by First Class (a salon specialising in accessories), took place in Paris at the end of June where the key points were sustainable development, fair trade, ethics and ecology.
2 Defining brand actions into typologies
A relatively large number of brands are developing a “guilt-free”, altruistic image, which is always effective. In recent months, many luxury brands have followed the “Charity” wave by communicationg their philanthropy as they are convinced that consumers are more likely to buy their products if the purchase is meaningful. This trend was particularly emphasised with regard to the United States, where conspicuous consumption has given way to “Luxury Shame” because shopping is considered vulgar and embarrassing. These communications actions generate the first two typologies: “Eco-chic” and “Social-chic”. Other brands have started to integrate sustainable development and ethics in their supply chain and can be categorised as “Responsible-chic”. Further brands, especially the high-end ones that can be put in the “Absolute-Luxury” (luxury without compromise – real luxury) category, focus on the core values that constitute their brand identity, for example their tradition, quality and know-how, their history. These values, by their behaviour and choices, represent the ethics of the brand itself.
2.1 « Eco-chic»
This category includes all brands who want to demonstrate their commitment to environmental preservation by raising funds for various organisations. Jaeger-LeCoultre, within the framework of the “Tides of Time”, has embarked on a three-year partnership with Unesco and the International Herald Tribune. The brand offers a donation to help the promotion and protection of 24 marine sites. Hamilton has committed to financially support “Conservation International” of which the actor Harrison Ford has been a member of for 17 years. The brand and the actor co-designed the “Khaki Conservation” watch, on the back of which appears the signature of Harrison Ford in addition to the Conservation International logo. They also developed recycled, corrugated cardboard packaging in order not to waste natural resources. IWC is supporting the Plastiki Expedition of David de Rothschild and his organisation Adventure Ecology. This brand will launch an expedition-proof special edition: the Ingenieur Automatic Mission Earth Edition “Adventure Ecology”, that comes with an environmentally friendly watch box. It is also supporting the “Charles Darwin Foundation” for the Galapagos Islands. In addition, TAG Heuer has chosen Leonardo DiCaprio as an ambassador for the brand; royalties will support the “Green Cross International” and the “Natural Resource Defence Council”. In the new campaign, the image of the actor is always associated with these two organisations. Other brands, including Zenith, are also committed to environmental issues, with their bids supporting the “Clean Water Fund”. The most environmentally-aware brand is Louis Vuitton, which has recently launched a mini-site to demonstrate its environmental commitment. It reveals an environmental charter with commitments and collaborations with “The Climate Project”; actions taken (the carbon balance, etc.), daily good practices, and training/information to various stakeholders. In addition, on 15 May 2009 LVMH became a shareholder of EDUN, a brand launched in 2005 by the singer Bono. This brand is specialised in “organic-cotton-fashion” and production takes place in India, Peru, Kenya and Uganda. In the last campaign, which communicates the values of the brand, ambassadors gave most of their fees to “The Climate Project” and the “Green Cross International Foundation”. The luxury group PPR set an example by informing and raising awareness to encourage each individual to take action supporting the film HOME, lanched the 5Th of June. This movie was accessible to everyone, simultaneously in all media, worldwide, nearly free. For the occasion, a series of exclusive pieces were created by some of the major brands of the group to support the environmental cause: Yves Saint Laurent has created a limited edition collection of T-shirts and tote bags in organic cotton emblazoned with slogans including « Save The Planet, Save Yourself »; Alexander McQueen unveiled a scarf designed, profits from which will be donated to GoodPlanet.org (a non-profit association created by Arthus-Bertrand in 2005); Sergio Rossi unveiled its first pair of leather shoes green “Eco pump” and will give part of the proceeds to GoodPlanet.org. Communication initiatives that employ this trend are numerous and sometimes original, including LACOSTE, whose last campaign with the initiative “Save your logo”, has embraced the protection and preservation of crocodiles!
2.2 « Social-chic»
In this category are all brands that have embraced social and ethical causes as a way of rising their profiles. They want to demonstrate their commitment to society by raising funds to improve the lives of individuals, particularly children, to help prevent certain diseases and to prevent social discrimination in general. In its publicity campaign, Baume&Mercier gives up all of its rights to the images of two celebrities and a photographer, for charities such as “Prostate Cancer Foundation for Research on Cancer”, “CARE” and “One Village, One World” in order to support education and the fight against poverty. Montblanc, in partnership with Sotheby’s and 12 celebrities, has made the “Signature for good”; revenues from the sales of portraits of celebrities have been given to Unicef. The brand also supports the “Nelson Mandela Foundation” thanks to the initiative of “Bangles 46664” where bracelets are manufactured by artisans who have been or are currently affected by AIDS. Revenues from the sale of wristbands will be given to the foundation. On its 125th anniversary, Bulgari’s decision to launch the “Rewrite the future” campaign in order to raise 10 million euros for “Save the Children” is particularly noteworthy. A silver ring engraved with the “Save the children” logo is on sale at all Bulgari shops. A percentage of the revenues from the sale of each ring is donated to the organisation in addition to all of the fees from the auction of jewellery and watches that will take place in December 2009. To celebrate 10 years of support for the “Elton John AIDS Foundation”, Chopard co-designed a watch with Elton John and donated a percentage of the sale to the Foundation. In addition, if you buy a watch with diamonds, you can also choose from 3 different foundations to support: “Prince’s Trust”, “José Carreras International Leukaemia Foundation” and “Elton John Aids Foundation”. Furthermore, independents such as David Morris and Shatila donated pieces to the “NSPCC” (an organisation that helps abused children). The fashion industry demonstrates a similar pattern, including Gucci, which has created a limited edition of the Babouska bag and has donated 25% of the sale to Unicef (“Gucci for UNICEF”). Diane Von Furstenberg also produced a bag especially for “Vital Voices” and donated the revenues from sales of the bag to the organisation. Additional brands are following a similar pattern : Cartier’s Love Bracelet donates portions of their proceeds to each ambassador’s charity; Zale Corporation and Russell Simmons have teamed up to create a sapphire and diamond bracelet whose proceeds go to the Diamond Empowerment Fund.
2.3 « Responsible-chic»
In the jewellery business, brands have adopted a responsible approach by controlling the supply chain from the extraction of raw materials, gold and gemstones, to their sale in shops. Since 2003, due to the Kimberly Process, spearheaded by De Beers, each diamond sold has a certificate of origin. The most exclusive brands – from Tiffany to Bulgari, Cartier to Boucheron to Van Cleef and Piaget– are members of the “Responsible Jewellery Council” organisation created in 2005 to promote responsible practices (ethical, social and environmental) across the supply chain. Moreover, from this year, they will be eligible for certification by the same organisation. These brands have been forced to be “responsible” because of scandals like “blood diamonds” adversely affecting their business. But we also found smaller brands like Garavelli, an Italian brand that recently launched a collection of ethical jewellery containing gold mined in an environmentally safe manner in order to protect communities and the environment from exploitation. There are also English brands such as the Oria Jewellery collection which employs “fair trade” practices. At the “Luxury Sustainable Fair” we also discovered JEL, a french brand that showcased a conscious and ethically engaged jewelry collection. But we still have a long way to go. In fact, as several jewellers and Mr Romain Renoux of the WWF pointed out at the “Sustainable Luxury Fair”, there is still not total control over the origin and mining of gold. Certain fashion brands, including MaxMara, who have launched a collection of accessories, under the project “Africa&you” have entered production in collaboration with African communities. Such examples of ethics in fashion will increase in the future. Indeed, there was an international conference on ethical fashion in Milan recently.
2.4 « Absolute-Luxury »
If it is true that consumers are more aware about the environmental impact of consumption, it is also true that most discerning consumers are interested about the manufacturing pedigree of a product and its intrinsic quality. If it is true that this is an emerging trend across society and that it concerns many products, it is even more true and evident for luxury products. Taking into account the needs of luxury consumer, the search for quality and security, some brands have re-focused their communication on their core values: know-how, heritage, quality and craftsmanship. For example Patek Philippe (before Baselworld) launched a reassuring campaign for its consumers, communicating on the core values of the brand DNA: know-how, transparency, continuity and the guarantee of a family company. Hermès, that has always bid on the values of quality and know-how is an excellent example of a successful luxury brand. This brand has shown its contemporary dimension thus remaining consistent with its values. It is one of the rare examples in which innovation and tradition (values that today have lost their meaning, having been utilized by all luxury brands in their communication) are real values. Actually, the brand has developed a website unique for interactivity and creativity. The rich content of the website increases the time spent per visit and enhances the goodwill of the consumer for this brand. All the ingredients are there to make the client dream, bringing him into the brand journey and making him discover the brand values. A hint to Chanel and its excellent strategy. At the same time as the presentation of the film “Coco before Chanel” the brand launched a mini website with the history and a movie for the Chanel n°5 fragrance. Actress Audrey Tautou, Chanel n°5 new testimonial, embodies the eternal brand values. Chanel reassures consumer through tradition and authenticity and it shows itself to be fully capable of matching durability and novelty without disowning its heritage. The purchaising motivation analysis shows us how luxury consumers ask for more excellence than “bling” and more substance than superficiality. The shift from ephemeral to sustainable and eternal is evident. Face with the new consumer, brands have to again find their charm proposing more exclusives and rare than daily and easily accessible products. It is crucial for brands to refocus their products on their heritage and reputation. We can see this effort in the last Louis Vuitton corporate campaign with Sean Connery « There are some journeys that turn into legend », where the accent is put on what represents the company’s core competence. Today, new values participate in creating a brand reputation and that is why many brands are communicating their engagement on social and environmental themes. In this moment it is much more a question of make-up than a real metamorphosis. Actually, the analysis of the actions of some brands shows that there is not a real strategy to integrate sustainability in their business models. Moreover, if the crisis accelerates these trends, it will be fundamental to communicate in an efficient way, building a consistent and convincing story in order to emerge in a market in which every actor is ethically engaged. Today, to strengthen their reputations, brands have to refocus on the authentic value components of their DNA enriching them with the emerging values in a consistent way. Brands that will succeed in evolving toward this direction will be able to define themselves eternal luxury brands.
In this particular moment of uncertainty and lack of vision for the future of luxury, we have the right to ask if after the bottom has been reached a real metamorphosis will take place or whether brand will just come back to business as usual.
With the increasing number of millionaires in emerging markets in the last decade, the luxury industry has seen a significant increase in its turnover and, until last year, witnessed significant growth in all categories of luxury goods, from cars to yachts, accessories, clothing, art, watches and jewellery. While it is important to consider the impact that globalisation has had on its development, it is also necessary to take into account the current global crisis and the emergence of new values that might fundamentelly change the market and force brands to rethink their strategies. In fact, in a time of crisis, it is critical to understand that the changing needs of consumers in developed markets like those of the United States, Europe and Japan have become more demanding and their reasons for purchasing more sophisticated. These trends are global and they also concern other Asian market, who are increasingly in contact with the West through access to international media and the internet. At the same time, it is clear that the luxury brands must change their tone and their message by taking into account these new values. For instance, certain luxury brands have already taken various different courses of action, and co-marketing with NGO organisations is thriving. To gain a better understanding of these new trends, we will consolidate brands in different categories according to their communication actions. This study seeks to throw light on the emerging values and expectations of luxury consumers because we believe that luxury today must base its image on real “Consumer Insights”: ie understanding the behaviour of customers, as opposed to the luxury industry traditionally being focused on itself and on its creations. And yet, what is the impact of the crisis in the development of communication and on the values projected by the brands? Communication is, in fact, the first tool used to motivate and reassure the consumer in a time of crisis, and it is clear that the revival of the luxury business has a long path ahead of it that will ultimately lead to a Darwinian natural selection process in all the sectors that are unable or unwilling to change course.
Katia Sambugaro – July 2009 -
Find the 10 major trends for the LOHAS (Lifestyles of Health and Sustainability) in the USA (Source NMI Research).
Consumers are beginning to make long-term changes to their lifestyle in a trend that represents realistic and tangible steps rather than sporadic and short-lived initiatives. From walking to work or getting another hour of sleep for better health to recycling or turning down the thermostat for the environment — sustainable, moderate, consistent and practical are the daily mantras of the Small Steps, Big Changes movement.
Although it’s a US research, it’s quite interesting and somehow confirm some findings published in the « Sustainable Consumption Facts & Trends » published lately by the World Business Council for Sustainable Development.
(1) Small Steps, Big Changes
(2) From Isolation to Affiliation
After a protracted housing boom which resulted in suburban sprawl, staggering commutes and isolated neighborhoods, consumers are seeking once again to reconnect with one another. From a resurgence in shared community living models, « the new communes », to a renewed interest in volunteerism, community gardens, YMCAs and other community centers, neighbors are looking for new (and old) ways to connect with other people.
(3) Being Here. Now.
From multi-tasking and the never-ending pace of work to the technological « tools » that constantly catapult us to another place and time, there is a growing recognition that we are being robbed of the present moment. To escape this preoccupation with either the past or the future, consumers are embracing metaphysics, such as Eckhart Tolle’s « A New Earth » or « The Power of Now », and are expressing a growing interest in eco-tourism, slow cooking and experiential consumption in an effort to be in the moment.
(4) LOHAS 360
The tipping point of the fusion between personal health and planetary sustainability has arrived. Now more than ever, the distinction between the two paradigms is blurred as consumers include their own personal health as a microcosm and reflection of the health of the planet. Increasingly, consumers’ values are resonating with companies that are able to fuse both a personal and planetary perspective into their brand/company offerings.
(5) Clean Sweep
Consumers are expressing a desire to eliminate anything toxic from their lives and seeking to control things that are within their sphere of influence — their relationships, their lifestyles and their bodies. With increased concern about environmental factors, the phenomenon of detoxification as a way to improve personal health is also growing and manifesting in everything from non-toxic consumer electronics and household cleaning products to spa detox and air filtration systems.
(6) Not So Alternative
From alternative fuels to alternative apparel, choices and options challenging the status quo across industries are being embraced. With the increased usage of alternative healthcare practices, physicians, insurers, employers, and consumers are embracing a more preventative approach to health. And as consumers continue to search for solutions to global warming, business and government will accelerate the navigation of environmental sustainability. Will the status quo ever be the same?
(7) Root Causes
Rather than simply evaluating consequences or treating symptoms, consumers are beginning to ask not only « what » but « why? » From increased interest in a company’s supply chain – where materials come from and how they’re made — to a recognition that lifestyle, environmental factors, and issues related to vascular inflammation are the fundamental components of aging and disease, consumers are taking a closer and more informed look at the underlying causes of health and sustainability.
(8) Beauty Shop
A new definition of « beauty » is emerging, reflecting the growing awareness that beauty comes from the inside – transparent and timeless. This new appreciation for all things authentic is translating across categories including vintage clothing, classic cars and historic renovations. For personal beauty, it is reflected in the new status symbol of naturally looking good at any age, without the aid of invasive procedures or plastic surgery.
(9) Energy 2.0
Energy 2.0 reflects our emerging desire to conserve energy on both a personal and planetary level. Rather than squandering our energy, we realize that our bodies, like the planet, are not an inexhaustible resource. This planetary health is manifesting itself on topics ranging from climate change to land conservation to renewables. On a personal level, consumers are demanding consistent and sustained energy for themselves. They are dissatisfied with the high/low spikes, but interested instead in healthier alternatives to caffeine and sugar.
(10) Heirlooms
In all areas of consumption, consumers are choosing to buy less to buy better. This trend reflects a desire for products with greater meaning, and given the economic downturn, is expected to continue to grow across categories. Now more than ever, products that reflect a rich or unique brand story are perceived to be more valuable – from an evolving desire for heirloom, artisanal and varietal foods to treasures found on eBay, it reflects our desire for history, for legends, and for legacies