Green Buzz in Luxury Brands

By Doval, Jyoti; Singh, Etinder Pal et al. | Review of Management, December 2013 | Go to article overview

Green Buzz in Luxury Brands


Doval, Jyoti, Singh, Etinder Pal, Batra, G. S., Review of Management


Defining Luxury

Luxury brands have often been associated with creativity, exclusivity, craftsmanship, precision, high quality, innovation and premium pricing which provide customers with an unknowing enhancement in their self-esteem, prestige and status. According to luxury fashion Designer Gabrielle Coco Chanel (1883-1971) luxury is a necessity that begins where necessity ends (Okonkwo, 2007). Similar ideas were shared by the famous economist Veblen (1899), who explains the concept of conspicuous consumption as the waste of money and/or resources by people to display a higher status than others.

Luxury is concept related to status, ego and psychogenic needs; not necessary for survival. The six facets of luxury identified by Dubois, Laurent and Czellar (2001), were excellent quality, very high price, scarcity and uniqueness, aesthetics and poly sensuality, ancestral heritage, personal history and superfluousness. Heine (2012) also describes a few similar core characteristics of luxury brands such as rarity, exclusivity, aesthetics, product craftsmanship precision, premium pricing and high quality.

Luxury Brands and Green Practices

The traditional luxury buyers were less concerned about the ecological and social responsibilities of the brand. However, in their recent survey, the Luxury Institute, New York, found that the younger and more affluent customers are more concerned with the CSR activities in comparison to the older ones. Thus, luxury brands are trying to re-invent their brand image and are associating themselves with 'an ecological and socially responsible image' or an image of 'the caretaker of Mother Earth', which is thus beneficial for the brand image and brand value. Furthermore, global recession has also added challenges for the luxury brands. A survey conducted by Cone Consumer Environment in February 2009 in USA found that 35% of Americans had great expectation from the companies that were ecologically responsible and 35% observed that they had higher interest in environment today than they had earlier. This obviously means that a good cause always has support of the community.

Luxury brands such as Gucci, Prada, and Versace have reduced the use of paper for packaging; it is a momentum towards 'going green' as more luxury customers prefers to use those products which are more environmentally-friendly (Kapferer, 2010). Some luxury brands have also entered into interesting innovations which we generally see in motion pictures of characters like the superman etc, for promoting this cause, an example of this is the brand Ermenegildo Zegna, which has designed "Ecotech Solar" jacket under its label Zegna Sport. This jacket has solar panels on its sleeves which can be used for recharging a battery.

World Wide Fund for Nature (WWF) has ranked the ten largest luxury brand owning companies on their environmental, social and governance (ESG) performance. These brands include Gucci, Tods and Louis Vuitton. The ranking is based on what the companies themselves report to the investment community and what are the findings of Media and NGOs about their practices. Anthony Kleanthous, senior policy adviser for WWF expressed that initially the luxury brands were quite defensive regarding the adaptation of environmental policies but now they are pushing themselves forward for it and this push is directly related to the brand value.

Literature Review

The history of green movement is differently viewed by different scholars. Some argue it to have begun in the early 1840s with the philosophers like Thoreau, while some argue it to have begun in 1960s with the release of Rachel Carson's book, Silent Springs in 1962 which highlighted the environmental damage caused by human errors such as destruction of natural resources, pollution, etc. and drove a call for care from all sectors of the economy for environmental protection and promotion of green.

Dubois, Czellar and Laurent (2005), categorized Luxury goods into three sets, based on how luxury products are perceived by the customers- Elitist, Democratic and Distant. …

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