Simply the best is no longer simple
MARKETING Luxury brands exist mainly to confer on their owners a feeling and an image of success. As the definition of success changes, so do our expectations of luxury, writes Anthony Kleanthous
Increasingly, successful people want to show that they understand and care about the environment and other people. Luxury products are expected not only to work beautifully and look fabulous, but also to be environmentally and socially responsible.
Luxury may be defined as the best of any given product or service category. Whatever you might look for in a car, a watch, a bar of chocolate or a holiday, the luxury versions give you more. They are the best-designed, best-made, highest quality and most expensive options available. They deliver the highest possible amount of customer satisfaction.
What satisfies luxury consumers their perceptions of good quality and good design varies greatly across the world, and has been evolving over time. The global luxury industry has sometimes struggled to keep up, but has recently been challenged and rejuvenated by a new trend for authenticity and sustainability.
The luxury industry has been globalising at a furious rate. Small, independent, niche western brands have been snapped up by multinational corporations, such as LVMH (Moët Hennessy – Louis Vuitton) and PPR, and turned into huge global brands in their own right.
Last year, global sales of luxury products reached £140 billion. Sales are growing fastest in economies with rapidly expanding middle classes, particularly China, which is about to become the world’s largest luxury market. Already-wealthy Asian countries have long had a love affair with luxury.
With this growth have come growing pains. Counterfeiters have learned to make astonishingly convincing fakes, remarkably cheaply, and to sell them all over the world. There have been scandals over poor labour standards, blood diamonds, dangerous and dirty gold-mining practices, the trade in endangered species, corruption, inappropriate advertising messages, and anorexic models.
Luxury brands have been accused of fuelling fast fashion, driving conspicuous consumption and tightening tensions between rich and poor. In Beijing, the authorities have gone as far as to ban the use of billboards to advertise luxury products and services, because such advertising is, according to Beijing’s mayor, “not conducive to harmony”. India’s prime minister has called on the rich to “eschew conspicuous consumption” and slapped a 114 per cent rate of tax on luxury goods.
In mature western markets, baby boomers and young consumers have driven a growth in “casual luxury”, preferring designer T-shirts to Savile Row suits. We have fallen out of love with conspicuous consumption and in love with luxurious experiences, such as spa treatments and luxury holidays.
Wastefulness is frowned upon, so Range Rovers are out and hybrids are in. The roofs of the nation’s rich bristle with photovoltaic panels and wind turbines. In a world of overwhelming clutter and rush, space and time have become luxuries in their own right; we aspire to elegance, simplicity and spiritual reconnection more than to traditional luxury items. We are gradually relearning the importance of buying fewer, better things and taking pride in them for longer.
In short, luxury is becoming less exclusive, less wasteful and more about helping people to express their deepest values. Those values now include a heavy dose of environmental and social responsibility.
The great luxury houses were initially slow to respond to these changes and even slower to lead them. However, the industry has now launched or signed up to a number of initiatives to clean up its supply chains, including the Council for Responsible Jewellery Practice, the Kimberley Initiative (to eliminate the trade in conflict diamonds), and the United Nation’s Global Compact.
Many are working with designers to develop sustainable fabrics and materials, and a few have just begun to embed sustainability in management practices across core business functions.
For example, French house PPR, (home to Gucci, Puma, Bottega Veneta, Yves Saint Laurent and a string of other luxury marques), now rewards its top executives for meeting environmental and social goals. It recently launched a new sustainability initiative called PPR Home named after Jean Yves Bertrand’s 2009 documentary, Home, which PPR financed to promote “a new business paradigm, whereby the attainment of sustainability is driving creativity and innovation, and vice versa, to build businesses that deliver financial, social and environmental returns”.
The rise of sustainability has been the first, and perhaps greatest, cultural shift of this millennium, and it poses huge challenges and opportunities to brand owners. The long-term success or failure of the luxury industry will depend largely on the ability of initiatives like PPR Home to foster deep and radical change, both in the nature of products and services being offered, and the willingness of middle-class consumers to embrace them with their hearts and their wallets.