In an earlier post I talked about what makes a good toy, contrasting two rival consumer mindsets against one another as partially to blame for the problem with toys imported from China: on one hand the desire (or expectation) for safety and quality at knock-down prices; on the other hand – the (almost) accepted transitory nature of many products and the subsequent unwillingness to spend money on products where safety and quality are taken extremely
seriously.

So where the true cost of quality has eluded people, and the effects of low quality not being completely clear (until now), it has been an easy option for many companies caught in this dilemma to go for Chinese-manufactured products as keeping manufacture in Europe or the US would simply have created prices that consumers would not be willing to pay.

However this is beginning to change. First indications of this was the emergent trading up, trading down trend where people deliberately sought to save money through highly thrifty shopping for everyday essentials, yet splashing out on upgrading select items in luxury outlets. Yet, contributing to the warped sense of value is of course the flip-side to all this, where reports and documentaries detailing how many luxury labels charge a premium for the ‘perception’ of quality they embody, but in actual fact many products are manufactured just the same as ordinary priced items. Luxury items simply command a higher margin, with labels pocketing the change.

What people are beginning to understand is what exactly the elusive term ‘quality’ means. It appears that Quality functions like a broad stroke term to encompass high expectations on:

  •     Material
  •     Finishing
  •     Design and Usability
  •     Functionality, features and compatibility
  •     Ethics and sustainability
  •     Health and Safety
  •     Environmental Impact
  •     Service and replace-ability

Many still refuse to pay the premium that this may translate to in the short term, but as we increasingly begin to be able to factor the costs of the long-term impact of such choices – it becomes very hard to sustain the argument. Leading this change is the growing attention paid to corporate social responsibility and initiatives like the Deeper Luxury report by WWF UK where the media response to this could be the tipping point for the Industry as suggested by CSRwire

Report_cover
Media Response to WWF-UK Report on Luxury Brands Could Be Tipping Point for the Industry.


Last week over fifty newspapers and magazines from Britain, Brazil,
Australia, New Zealand, Italy and Switzerland reported on the corporate
responsibility of the world’s largest holding companies of luxury
brands. For the first time they had been ranked on their ethical
performance in the report Deeper Luxury: Quality and Style When the
World Matters
, which was published by environmental group WWF-UK. The
news went ‘viral’ through trade journals and blogs on fashion, jewelry,
and celebrities.

The
report “could herald a huge change in the way global luxury brands
operate,” states Fashion UK.(1) ‘The luxury goods industry looks like
it’s having its own Nike moment,” suggests UN corporate reporting
expert Dr Anthony Miller, referring to the mid-90’s criticism of labour
practices in Nike’s supply chain that made the company invest heavily
in its corporate responsibility programme. Within days, Just-Style.com
reported that “PPR Group commits to improving sustainability” as a
result of the publication.(2)

 

 

“Modern
technology means that what’s on the catwalk today can be copied and in
the shops tomorrow, so brands need to offer something deeper than
purely appearance. The same goes for counterfeiting.” says
Dr. Jem Bendell of Lifeworth
Consulting, the responsible enterprise consultancy contracted by WWF-UK to
manage the research project and co-write the report. “Sales growth in societies with high social inequality means that
luxury brands face a crisis of legitimacy and a regulatory backlash, so
their products will need to benefit the local economy with good jobs.
The increasingly youthful profile of luxury consumers means luxury
brands need to find ways to build in value to casual fashion items,
without making them non-casual, with sustainability and ethics an
obvious approach,” he explains. “The increasing availability of luxury
items means that brands must find new ways of maintaining their cachet,
rather than relying on the memory they were once scarce and exclusive.
Deeper luxury is the strategic answer to all these challenges.”

Also
an Associate Professor of at Griffith Business School in Australia, Dr.
Bendell stresses the need for a paradigm shift in corporate strategy:
“Consumer awareness should no longer be assumed as the only commercial
driver for ethical excellence. Though counter-intuitive to traditional
corporate strategists, this shift in thinking is fundamental to the
contemporary business environment of global communications, where
successful brands are behaving more like social movements.”

Tom
Ford, the former Gucci top designer said on the eve of the report’s
publication that “we need to replace hollow with deep.”(3) Ford’s
business instinct rather than telepathy is key, according to Bendell.
“There’s no one better than Tom Ford for spotting trends in consumer
mood. The report details a variety of strategic commercial imperatives
for deeper luxury. If executives don’t get it, that could be because
they’ve had it so good for so long and have become complacent.”


And what of the reaction? “Some
executives might be stung by the coverage, and some environmentalists
confused,” notes Lala Rimando of the Authentic Luxury Network. “But
WWF-UK should be applauded for sticking its neck out by publishing this
report” says the Manila-based business journalist and consultant. “The
scale of the environmental challenge is so great and pressing, and the
reach of NGOs into Asian societies currently so limited, that if the
brands that affluent Asians love can excel in sustainability, then
awareness of sustainable living may grow in emerging economies fast
enough to offer a chance of curbing global consumption and pollution
within environmental limits.”

Lifeworth has launched the
Authentic Luxury Network to bring together executives, designers,
analysts and entrepreneurs who want to lead the creation of more
sustainable and ethical luxury (www.authenticluxury.net). The company
has also launched a site for people to keep up to date with celebrity
reaction to the report and its proposal of a Star Charter for
responsible brand endorsement (www.starcharter.net).

 

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