Article de Maya MIKAIEL (MS EnvIM 2023)

 

Introduction

Amongst the literature, the term “luxury” is employed to describe the “top category of prestigious brands” (Achabou, 2013). Opposed to non-luxury goods, the goods falling in the luxury category are synonymous with “superior quality, uniqueness and going beyond need; it is uncompromisingly extravagant in terms of effort and material and often exhibits craftsmanship and expertise” (Athwal, 2019). Upscale products are also naturally connected with material goods while the concept of luxury encapsulates symbolic and cultural values (Dubois, 1994). Kapferer (2010) described the luxury sector as “sustainability silent” because of the lack of proactive stances in sustainable development.

The luxury sector, if not more specific, can include all type of products, as long as they encompass these definitions. Therefore, environmental issues should be highlighted amongst all value chains of luxury products, such as resource depletion for rare materials, animal abuse to produce unique materials (leather, feathers, furs,…), a questionable work ethic in delocalized industries to decrease the manufacturing price, tons of wastes produced due to unsold products, etc.

If this sector is clearly aware of the issues, it remains discreet, and some critics interpret the discretion as inaction. The main goal of the article is to understand the actions undertaken by luxury actors and the answers received from the public. It tries to bring a more environmentally friendly consumption pattern to life, despite a clear underlying paradox between sustainability and consumerism.

Why do we consume luxury goods?

Consumers appeal to luxury, its benefits and fallouts.

Consumerism psychology appears to be embedded as an anthropologic value, deeply rooted in habits, environment, and wealth. Indeed, the customers’ rapport to consumerism deeply depends on the background and habits of such an individual and fluctuates between social classes, wealth, environment, and many other factors that represent individuality in our society (Dubois, 1994). “The structure of people’s predispositions towards luxury, as a concept, are affected both by their perception of the luxury world in general and their perceived personal fit with such a world” (Dubois, 1994).

When the literature can contradict itself about the reasons one would be attracted to luxury goods, it seems that beauty, uniqueness, and display of skilled craftsmanship are the major reasons why we consume luxury goods (Kapfer, 1998). Kapfer (1998) summarized in his research that luxury brands are sought-after especially for the magical aura of luxury products. This last highlight might explain customers’ attraction to luxury a little better since communication around luxury creates a world consumers crave to be part of (Megehee, 2012).

“Consuming luxury consumption yields costs and benefits at the economic, social, and psychological levels” (Dubois, 2021). This tension-based framework widens the scope of luxury consumption behaviors since Dubois explains that nowadays, people look beyond the realm of possessions consumption only to pursue a meaning embedded in what Dubois calls cultural capital: education, parenting, and health. It is the race to elitism in society: elite education in private schools, elite health with high-end gyms and access to biological food increase self-perception and status. In summary, owning luxury goods increases perception of self as well as social recognition: a product is a shield against negative feedback both from self and others (Dubois, 2021).

In a world driven by a sense of urgency, we see our resources more and more limited, to the point where essential products, such as food and water, might, one day, disappear or be only accessible to a top-tier social class. If Attali (2006) anticipates a split world driven by conflicts and wars over scarce resources, there is still power in our generations to ensure a fair access to all resources. Furthermore, we could simply question the maintenance of luxury production over essential products. However, luxury goods can yield some answers towards a reasonable consumption, as long as brands follow a clear environmental ethic. This is why we can wonder: to what extent are luxury brands likely to change their habits in response to the climate situation and the scarce access to resources?

Is sustainable luxury consumption possible?

If OECD (2002) defines sustainable consumption as “the consumption of goods and services that meet basic needs and quality of life without jeopardizing the needs of future generations”, Athwal (2019) suggests that sustainable luxury entails the scope of design, production and consumption that is environmentally or ethically conscious (or both) and is oriented towards correcting various perceived wrongs within the luxury industry, including animal cruelty, environmental damages and human exploitation.

Kapfer’s (2010) deeper analysis reveals how much sustainable development is deeply congenial with real luxury: it takes rarity and beauty as its central concerns and real luxury is durable (Kapfer, 2010). This is why luxury brands need to act as a role model for the entire fashion industry and foster ecological behaviors since high prices limit the demand and is the best way to protect the future of all resources (Kapfer, 2010).

According to the AFP report (2008), luxury companies have substantial financial resources to assume a leadership role on the climate change mitigation issue (Achabou, 2013). This role model situation comes from the position it entails: the revenues are estimated around 160 billion euros in 2009 according to the global management consulting firm Bain & Co (Kapfer, 2010).

However, sustainable development aims for frugality and self-restraint while luxury encourages aspirational consumer to buy beyond rationality: “economic growth is based on the desire of middle class to emulate the richest” (Kapfer, 2010). Hence, this shows an intrinsic sustainable role model potential for luxury brands, but also highlights incompatibilities in regard with luxury substantial growth over the years due to mass consumption and foreign exportation (Ho, 2016).

Although CSR refers to companies’ voluntary social and environmental impacts, luxury brand management is working towards good ethics and effective CSR measures to mitigate the climate situations (Vázquez, 2023). Globalization have witnessed prominent growth in luxury brand sales over the recent years. However, the dramatically changing economic environment also leads to hardship for luxury brand companies since it affects the customers’ perception whether their high-priced luxury brands are worth purchasing (Ho, 2016).

The prestigious aura and value of luxury goods overrule the ethical concern for most of the consumers (Davies, 2011). In the literature, the consensus over green marketing is that the environmental features of a product do not predict the purchase of it (Gupta, 2009). This attitude-behavior gap also disappoints fashion companies and motivates green marketing and eco-fashion consumption research to investigate factors that influence fashion consumers’ eco-fashion consumption decision, in order to market the right sales pitch (Chan, 2012).

Many luxury brand companies actively engage to explore rapidly growing sales for luxury brand markets. So far, the marketing research associated with luxury brands has largely ignored the consumers’ perceptions of CSR initiatives and the impact on purchase intention of luxury brands (Olšanová, 2018). Indeed, they still mostly approach CSR initiatives with “disorganized philanthropy, glamorous sponsorship projects and the management of reputational risks” (Olšanová, 2018). However, with the common rise of environmental concerns in the customer base, despite the inconsistencies, the purchase intention is still impacted by CSR activities, hence accelerating the industry efforts in this regard (Olšanová, 2018).

However, there is a need to inform and communicate about CSR activities implemented in luxury brand management since Olšanová (2018) highlighted that despite the high-level of general knowledge about climate change, global warming and environmental urges, the public is still very unaware of actual CSR measures implemented in luxury brands. The general knowledge of specific CSR activities is not specifically linked to specific brands, or even the luxury sector itself, but is weak for the consumption industry (Olšanová, 2018).

To conclude, despite a positive general attitude towards CSR and sustainability, this feature will not be able to predict a purchase, but is found to have an impact on the customers when they were asked brands’ impacts on the environment (Olšanová, 2018). This shows a clear direction towards communication, engagement and better pictures of luxury brand management actions towards both ethical and sustainable ways to produce and sell.

According to Maxwell (2023), the challenge faced by luxury brands is that today generations’ value systems are becoming more and more different from those of earlier customer generations, where status, legacy, prestige, and heritage are replaced by inclusivity, sustainability, transparency and technology. In order to draw in and retain customers, the luxury market is being dismantled and linked to other, frequently unanticipated facets of trade and culture.

According to Maxwell, this generation is supposed to represent up to 70% of the future luxury clientèle in 2025. Indeed, the luxury industry is changing to satisfy the rising demand for pre-owned luxury products, a market that roughly reached a value of $46 billion in 2022. Younger consumers’ growing emphasis on sustainability and circular economies is driving this trend. Maxwell states that 84% of Gen Z consumers and 73% of Millennials will spend more on products that are ethically sourced and sustainably produced.

Their desire to become independent “collectors” and purchase used luxury goods as long-term investments and assets to trade later, as opposed to immaculate status symbols or heirlooms, is partially the cause for this change. All of these developments—from second-hand goods and high-street partnerships to circular economies and virtual marketplaces—would have felt startling to the luxury market just five or ten years ago. They appear to be entirely culturally relevant today, which is a testament to how quickly and widely young people are changing the standards for what constitutes luxury goods.

 

Discussions and conclusions

According to 2023’s Fashion Transparency Index published by Fashion Revolution, most of the top players in the luxury market have improved their scores by making their supplier lists public. In certain cases, these lists include raw market suppliers as well as first-tier factories. However, the assessment is still insufficient, and global luxury transparency makes little to no progress when it comes to transparency.

A little more than one-third (34%) of the biggest fashion brands in the world reveal a quantifiable, time-bound commitment to decarbonization, which includes Scope 3. However, only 32% report making progress toward these targets, according to the FTI. The advancement of the textile industry depends heavily on transparency, particularly in developing nations where buyer and investor confidence is vital. Increasing transparency is crucial to addressing this lack of trust and can be accomplished through initiatives that an increasing number of associations and businesses are taking up.

This strategy may produce useful data that will enable the governments of industrialized nations to determine and carry out the essential policy adjustments for decarbonization. The same can be said for social justice and animal welfare in ethical production in the luxury market.

While the issue is far from being solved by limited resources and greenhouse gas emissions, concepts like degrowth, green growth, and the European Green Deal are making an appearance in politics. In the end, luxury businesses should engage more rapidly in sustainable practices, prioritizing the sake of future generations instead of retaining customers with green packages.

It will take some time before the luxury sector’s real practices meet the OECD’s definition of sustainability. However, the luxury market is poised to lead the way in sustainable practices, and should claim this leading position in order to better steer the industry.

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