Luxury goods companies must find a way for their products to be more than just markers of wealth or social status. They can achieve this balance by emphasizing authenticity through the commitment of their employees to the craft and art of their customers. As an example, the authors cite Herms, a French luxury goods company.
Accenture Strategy conducted a global survey of 30,000 consumers across 35 countries in 2018. It found that nearly three-quarters (62%) of those surveyed thought brands with high ethical standards were attractive. This could be a problem for luxury companies, as people see luxury goods as wasteful self-indulgence that can potentially damage the environment.
Luxury brands may not be able to adopt traditional methods of improving their ethical standing, such as using fair labor practices or recycled materials. Marketers must be clear about what they mean by being eco-friendly in order to prevent customers misinterpreting sustainability messages as greenwashing. Research has shown that luxury brands who engage in corporate social responsibility may be negatively rated by consumers. Some studies have shown that luxury brands that are eco-friendly may be perceived as having less social capital and status than luxury products that are not sustainable. Luxury brands are not able to distinguish themselves from other non-luxury brands by focusing on the environment. Non-luxury brands have been involved in sustainability for a long time.
Our suggestion is to focus on authenticity. Our recent research among over 1,900 customers in different product categories (watches/prenses/design furniture) has given us insights into how luxury brands can communicate their ethics through authenticity.
Before we get into the details of our research, let's start by looking at brands that can communicate authenticity.
Two Types of Authenticity
Two ways consumers perceive brand and product authenticity are indexical and iconic.
Indexical cues for authenticity
Marketers can signal the authenticity of a product by making direct connections to its makers and origins. It is possible to tell that an Italian-designed piece of furniture has been made by local artisans in an Italian village and is authentically Italian. This perception of authenticity is based upon objective information, such as certificates of origin and the nationality of its designer.
These are iconic cues that indicate authenticity.
This form describes a product that is either a reproduction of an existing product or a re-edited product of a previous product. It is also a product whose design is determined by the maker's subjective perception of the original's key characteristics. This means that if key marketing elements are reminiscent of the original Italian product, such as the shape, color or materials used in the French branch, it could be perceived to be authentic by your furniture manufacturer in Italy.
We examined the perceptions of ethical product quality in our two first studies. This was done with nearly 500 US consumers. Respondents were presented with high-end perfumes or designer chairs that had been described as the original and included an indexical cue. Or they were described as the second edition of the same brand, which paid tribute to the original and came with an original brand booklet (iconiccue).
Consumers perceive brands as more ethical when they communicate authenticity using indexical cues. We found that both messages were equally authentic and could not be attributed to the perceived authenticity. Why is it that products with indexical cues are considered more ethical?
It's all about passion
We conducted more studies with 700 people to answer this question. Respondents perceived original versions of perfumes with indexical cues as authentic (original) as being made with greater care and effort than those with iconic cues (authentic replica). Original versions are by definition new and unique, so it is likely that they have required more investment. This perception of more effort and love was what made these products more ethical than the iconically authentic.
We conducted another study with over 700 people to confirm our hypothesis. In this study we highlighted the fact that the iconic product required the same level of care in creativity, design and craftsmanship as its indexical counterpart. For example, we highlighted the amount of time it took to develop the product and the number and quality of the design ideas submitted for review. These signals showed that ethical perceptions of iconically authentic items were similar to those for indexically authentic products. There was a direct correlation between the amount of effort and love that the manufacturer put into the product, and the likelihood that consumers would perceive it as ethical.
So what should marketers do?
Giorgio Armani once said that luxury brands must return to authenticity. His observation seems to be confirmed by our findings. Herms is a luxury brand that has raised ethical perceptions. This was achieved by moving away from traditional marketing strategies to embrace authenticity. Real people are the key to bridging the gap between the past and present with an artistic eye.
The human touch.
Luxury brands often have a connection to their roots as the manufacturing of their products is often close to their origins. They still use traditional manufacturing methods, such as hand-crafting products by skilled artisans who are driven by the desire to make the best product. Herms does more than others. Herms Beyond the Walls is a public event that celebrates the passion of the artisans behind its products. It showcases both original creations as well as those that are inspired by classics. The event featured Herms artisans demonstrating how to handcraft unique pieces and answering questions. It is clear that each product takes many steps and requires a meticulous manual. Pierre-Alexis Dumas is Herms' creative director. He says that customers leave the event with a strong relationship with the product. They feel the presence of the person who made it.
Forward-looking continuity
Luxury goods manufacturers tend to emphasize tradition. Swiss watchmaker Patek Philippe presents its products as tomorrow's heirlooms. However, this communication is more effective when it emphasizes how today's craftsmen are part of a long tradition. For example, if a brand is committed to its heritage and employs several generations of craftsmen from the same family, it will be able to demonstrate that both they and their employers are committed to the tradition of their craft.
It is important to not get caught up in the past. Luxury goods companies that are the best understand that they can't live off or re-make classic products forever. They risk losing the connection to the creation and love that went into them and may be perceived as exploitative and less ethical. Herms is a place where traditions are maintained and connected to passion by frequent collaborations with modern creators and designers, as well as customers. Laurent Goblet was a Herms saddler for 40 years and worked closely with Jessica von Bredow–Werndl, the German dressage champion, to design the Arpge saddle. Herms used the traditional skills of its glassmakers to create watches with sapphire crystal embedded diamond indexes. These watches appear to hover above their inner workings. This innovative move in watchmaking was pioneering and required traditional skills to create a modern design.
Giving your all to the arts community.
Luxury goods companies can go beyond designing and manufacturing their own products and show passion by supporting artists and raising their ethical profile. The Herms Corporate Foundation offers artist residencies. They have the opportunity to collaborate with Herms designers and craftworkers to explore social issues from different perspectives and create art using Herms products such as silk, paper, paper crystal, and leather. Bianca Argimon (a Belgian artist who is currently in residence at Herms Textile Holding Company in the Lyon region) was interested in silk muslin printing, a delicate material. She was inspired by Hieronymus Bosch's famous painting to create a silk print that described the excesses in consumer society with the help of the Herms Foundation.
CSRHUB Consensus ESG Ratings ranked Herms at 89%. This could be due to Herms' ability to leverage important authenticity cues. We also conducted an additional study in the U.S. in which Mturk respondents were asked how Herms compared to its top fashion rivals (including Chanel and Prada, Burberry and Louis Vuitton) in terms of their ethical commitment. The results show that Herms was perceived by most respondents as being more ethical than its competitors.
Let's be clear: luxury retailers must do more than green their products and operations if they want to earn a reputation for ethical business practices. They must communicate the passion and dedication of their employees to their art. Customers must know how much thought and care has gone into every product and service they provide.
