A sustainable luxury: When the luxury industry is becoming green - A report on the luxury industry market mix

Résumé du document

Until now, people have been familiar with the bio yoghurts and the bio vegetables but today it is for the luxury industry to become eco-friendly and ethical. Some big groups and companies of the sector have begun to make progress in this growing market. More than ever, the notion of the respect for the environment is developing throughout the world in people's minds. For this reason, luxury brands decided to take a stand on this concern by reviewing all their activities, from the part of supplying raw materials to the distribution of their products.

A concrete example of this growth decided the initiative taken in May 2009 by Barbara Coignet, the organizer of the 1.618 fair in Paris. She created the first sustainable luxury fair in the world. The main ambition of this fair was to combine the luxury industry with sustainable development. It also strived to increase public awareness of this new issue. This innovative exhibition had thirty luxury companies displaying their new eco-aware products at the heart of the Tokyo Palace and this allowed them to take a bigger step in the evolution of the luxury industry.

In contrast to what we think, taking care of the environment is not new for the sector. Events like corporate sponsorships and donation activities had already taken place in the 1980s. Since 1993, LVMH has been a member of the association OREE whose goal is to gather several companies together and develop a reflection about the environmental protection. More recently, PPR became the exclusive partner of the movie "Home", which was made by Yann Arthus-Bertrand, in order to show its social and environmental responsibility. Thus, these different kinds of corporate patronages can be defined as the first step towards sustainable luxury. The second step initiated was a change in the supply chain management. Today, luxury companies are aware that our future generations are threatened and if no action is taken then the consequences on the earth will be disastrous. For this reason, they are adopting some eco-friendly practices in their activities and trying to correct the ones that are damaging the environment. As mentioned previously, these changes are observed from the period of supplying till the distribution of the products.

However, this evolution towards the new luxury industry leads to several controversies, as many think that it is impossible to combine luxury with ecology. They underline the existence of a paradox between the two concepts. According to them, we cannot imagine a luxury, synonym of abundance, lushness and superficiality going hand in hand with sustainable development which advocates the preservation of resources.

First, we will explain the notion of paradox between luxury and ecology. However, in the same part we will see that these two concepts are not as contradictory as we thought they would be. In the second part, we will illustrate this compatibility by giving some examples of luxury companies which integrated this notion of sustainable development in different areas of their activities. We will also see that the level of commitment is not the same for all the companies and sometimes, for some of them, it is really difficult to follow. Finally, in the last part, we will try to understand the reasons that force the companies to change their behaviors and the role of this transition in our current society. We will conclude by mentioning the limits of this movement.

Extraits

[...] For this kind of luxury, the concept of ecology is already innate or at least, it does not impact the planet in a same way b. An initiative which turns out to be necessary for the survival of the luxury industry. If we look at the concern of ecology from another point of view, we can see that the luxury industry has no other choice that to adapt to these constraints! Indeed, here it is more a matter of the survival for luxury industry. [...]

[...] We can say that it is the social responsibility of luxury companies. Maybe within few years, the number one of cosmetics, L'Oreal, will encourage its consumers to change their behaviors thanks to a new slogan: “Because I'm worth it: I respect the environment”! B. A solution face the economical crisis Another reason which pushes luxury companies to develop their activity on the green market is the financial and economical crisis of 2008. Indeed, except Hermès group, the whole luxury industry has been strongly affected by the crisis. [...]

[...] But has anyone ever thought of how many luxury brands are moving to a green strategy? The goal of these and other luxury brands is the same to review the systems of manufacturing and transportation trying to increase the organic practices. Obviously, it reflects the challenges[11] since it is highly important for the companies to keep their consumers who were attracted by their design, service or other touchstones. Moreover, luxury brands are more sensitive to reputational damage, because a big part of their value comes from empathy and trust. [...]

[...] Companies which are used to transport their merchandises to the opposite side of the world, to use a lot of polluting components or to spend also a huge amount of money for the packaging of their products, could be really shattered by integrating all these environmental constraints. It is the case for example with the last most powerful and luxury car of Bentley Company. Its main ambition was to be ecological in order to compete against all the new constructors of the car industry who were following the green trend. [...]

[...] Taking care of the environment is expensive; we can see it with ecological products which are much more expensive than ordinary products. It will have as consequence that these products will target only a very small market, smaller than the one of the luxury industry (which is already small)! Therefore, persons who will use these new products will not reflect the whole population of the earth. We already noticed this fact with the price ticket of the first sustainable luxury fair in Paris Euros the fair entrance is not affordable to everybody! [...]