VI. Sustainability Flashcards
1
Q
Why Luxury under spotlight of sustainability?
A
- Seen as unnecessary consumption
- Symbol of consumerism
- Make inequalities visible
- Fashion industry perceived as 2nd most polluting industry
- Luxury industry is visible target = Digitalization expands reach/ Growth of industry and brands/ Internationalization
2
Q
Definition sustainability
A
- Meeting needs of the present
- Embrace ability of future generations to meet their own needs
3
Q
Triple bottom line
A
- Economic profitability
- Respect for the environment
- Social responsibility
4
Q
Are luxury and sustainability compatible?
A
- Yes = 1. Timeless design/ 2. Durability/ 3. High quality of product/ 4. Craftmanship/ 5. Authenticity/ 6. Heritage
- No = 1. Spending beyond necessities/ 2. Based on inequalities/ 3. Rarity endanger rare species & materials/ 4. Financially driven luxury groups
5
Q
Why is sustainability key for luxury?
A
- Growing environmental and societal pressure
- Increasingly demanded by young consumers (WTP 10% higher)
- Luxury products act often as industry models
- Sustainability provides opportunity for innovation
6
Q
Why was it difficult for Luxury brands to be sustainable?
A
- Few synergies across brands
- Each brand has own control/ audit mechanisms
- Independence of the Maisons (Häuser) to protect aura
7
Q
How can luxury brands be more sustainable?- Example LVMH
A
- LIFE (LVMH Initiatives for the environment)
- LIFE responsible to integrate sustainable development in all LVMH Maisons (Häuser)
- LIFE 4 objectives = 1. Improving environmental performance/ 2. High standards in procurement chain/ 3. Improving environmental performance indicators on all sites/ 4. Reduce CO2 Emissions
- Launch of climate week & life 360 program = Use of eco design/ Repair services/ Packaging without plastic
8
Q
Certification in the case of the watch sector
A
- Certification regarding ethical supply chain for metals (Gold, Silver, Diamonds)
- Creation of the Responsible Jewelry Council (LVMH, Omega, Cartier, Chopard)
- Carla Riccoboni = Saving prototypes to construct the moulds instead of disposal
9
Q
3 circular economy pillars
A
- Regenerate natural systems
- Design out waste and pollution
- Keep products and materials in use
- All leading to a shift in the system
10
Q
Circular Luxury types
A
- Second-hand luxury
- Renting models
- Recycling = E.G Aurate
- Upcycling
11
Q
Second-hand luxury ´
A
- Tiny part of fashion market only 2%/ Growing market
- Big retailers for high-end second-hand clothes and handbags = TheRealReal in US/ Vestiaire in EU
- Brands are developing own second-hand offer = Farfetch
- Brands are partnering with second-hand companies = Gucci with TheRealReal
12
Q
Renting
A
- Decrease the demand for new clothing
- Provide customers with access to a variety of clothes
- Consideration of changing customer needs = Fast evolving fashion preferences
- Short-term usage allowed
13
Q
Upcycling
A
- Transformation of unwanted products into high-value items that would otherwise be thrown away
- E.G. Chloe recycled bag between 2500-3100€
- Pro = Helps overcome sourcing issues caused by C-19/ Growing demand/ Buyers good conscious/ Craftmanship feeling
- Con = Costly because labour-intensive/ Necessity to redesign every piece
14
Q
What should brands communicate?
A
- Not scaring customers
- Alter the story according to sustainability efforts
- Creating a new concept of luxury
15
Q
Burberrys actions with respect to stock destruction
A
- Said that only items with its trademark were destroyed
- Said that cause are license issues with beauty company Coty
16
Q
Reasons why luxury fashion brands destroy excess stock
A
- Less costly/ time than recycling
- Financial benefits = Import tax recovery
- Maintaining exclusivity through perceived rarity = No outlet sells/ No items stolen or resold
- No obligation to disclose how unsold products are handled
17
Q
How to evaluate Burberrys actions with respect to reporting on its actions?
A
- Transparent = Reported destruction in annual report/ Unique in the luxury industry
- Not transparent = Missed an opportunity to take leadership/ Greenwashing?
18
Q
What should Burberry do in terms of their consumer base?
A
- Ignore sustainability expectations = Asia most important region in terms of sales
- Partially answering expectations = Not all customers value sustainability the same way
- Making sustainability part of core strategy = Stay relevant/ Avoid crisis/ Ahead of regulatory changes/ Keep favor of investors
19
Q
How can Burberry manage the tension between luxury and sustainability?
A
- Decreasing overproduction and increasing rarity
- Transforming customers desires
- Creating a new narrative = Link between heritage and sustainability
- Using sustainability to innovate/ increase margins/ provide high quality
20
Q
Limits of sustainability in Luxury
A
- For some luxury sectors impossible
- Risk of greenwashing
- Financial bottom line has to be respected
- Tension between exclusivity and sustainability
