Sustainable Luxury | An issue not to be ignored

Dries Van Noten, courtesy of IHT

Dries Van Noten, courtesy of IHT

It’s day two of the BoF India Fashion Week and today we turn our attention to Sustainable Luxury, the theme of the most recent IHT Luxury Conference, held this year in India, home of age-old craftsmanship and artisanale traditions.

NEW DELHI, India “What does an economic collapse and a terrorist attack have to do with sustainable luxury?” Everything, strategist and author Jem Bendell suggested as he addressed the attendees of the International Herald Tribune’s annual conference on Luxury held last week.

The event was re-scheduled from December of last year, due to the 26/11 attacks on Mumbai. The topic for this year’s conference was Sustainable Luxurya phrase whose meaning has expanded to include more than just corporate social responsibility (CSR). The global economic downturn has precipitated a major shift in both consumer behaviour and expectations, affecting the bottom line of many luxury brands and calling into question the sustainability of the sector itself.

As Suzy Menkes, Fashion Editor of the IHT, noted in her opening address, “these are tough, rough times in the luxury world… and those sensitive to the shifting mood doubt that the 15 years of expansive growth can return in the same heady, crazy way”.

The notion of sustainable luxury today must be defined by more than just how the sector conducts business in relation to its environmental and social impact. It must also consider the ongoing relevance of an industry that for many exemplifies the type of rabid consumption and extravagant spending that, in part, gave rise to the current economic crisis in the first place.

So, gathered together was a group of leading industry professionals with the common goal of imagining what luxury, sustainability and India have to do with each other. François Henri Pinault spoke at length about the efforts PPR has been making to decrease the environmental impact of their businesses, including logistics, transportation and packaging optimization. Gucci’s leather goods and jewellery divisions are SA8000 certified and as CEO, Pinault has linked CSR targets directly to management compensation throughout the PPR organization. Although much of his talk came across like a textbook presentation on CSR, the work being done is commendable and undoubtedly a step in the right direction.

Christian Blanckaert, Executive Vice-President of Hermès International, took the opportunity to declare the end of “pop luxury”. A long-time proponent of signature over brand, Blanckaert asserted that the current economic crisis and resulting adjustment in consumer behaviour would swing the pendulum back towards “deep luxury”true luxury, which is not fast and has little to do with fashion.

The manufacturing of these kinds of goods requires a high level of quality and craftsmanship which results in long term partnerships with suppliers and workers, encouraging economic sustainability for all those involved. Searching for value, the consumer will continue to spend on products that are perceived as investments. If the steady sales at Hermès for the past three quarters amidst plummeting performances elsewhere in the sector are any indication, other brands would be wise to take note.

Mohan Murjani, Chairman of the Murjani Group, outlined in no uncertain terms the reasons for the recent termination of his Indian franchise agreements with brands such as Gucci and Bottega Veneta. In addition to a massive disparity between initial projections and actual numbers in matters of sales, margins, markdowns and costs, Murjani suggested that the challenges of the Indian consumer were grossly underestimated.

This discussion was the first of many throughout the conference that stressed the highly value-conscious nature of the Indian consumer. Not to be misunderstood for simple price point sensitivity-affluent Indians certainly have the money to spend-but a real evaluation of the quality, craftsmanship and uniqueness of the offering has been the trend with shoppers here. In a country that has been developing embroidery techniques, harvesting gemstones, creating fabrics and inventing dyes for thousands of years, it is hardly a surprise that ‘value’ is held to such high standards.

Charu Sachdev, CEO of TSG International Marketing and Indian franchisee of brands such as Lanvin and Stella McCartney, argued another element was at play, contributing to the purchasing barrier Indians are experiencing when shopping on home turf. Acute poverty, still very much a reality in India is harder to ignore when not in Paris or Dubai. The relationship between potentially excessive consumer behaviour and social responsibility is more likely to come to the forefront of a shopper’s mind when you drive past a slum on your way to a glossy, new luxury shopping complex.

The solution? Building a business model that moves beyond the “no harm” notion of responsibility to that of positive engagement and long-term sustainability will go a long way in re-enforcing the positioning of luxury brands. Luxury brands must make sure their definition of excellence is in line with that of their increasingly conscientious consumers. Designer Dries Van Noten, who spoke of his 20-year relationship with a Kolkata embroidery atelier has the right idea when it comes to building a long-term relationship with the Indian marketplace and providing shoppers incentive to buy.

The difficulties luxury brands have been facing in India typify those that they will face on a global scale as a result of new economic realities and altered consumer expectations. The value proposition of a product will have to satisfy a greater number of discerning, quality-hungry customers looking to make a real investment. The days of disposable luxury are over. In addition, those who are still spending will want to make sure their purchases contribute somehow towards a greater environmental, economic and social sustainability.

Shrinking economies and terrorist attacks only serve to remind us how connected we really are, making sustainability an issue the luxury sector can no longer afford to ignore.

Meeta Roy is a luxury brand consultant based in Paris.

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3 comments

  1. “Driving past a slum on your way to a glossy, new luxury shopping complex….” is happening and has been happening whether there is poverty or acute poverty. Obviously, it’s easier to ignore depending on our own current status.

    Nevertheless, since we are talking about India the recent Slumdog Millionaire movie and the lives of the young actor and actress show the disparity as life goes on for those of us not living in poverty or acute poverty. The father was cleared of offering his daughter for sale.

    How do you make a ultra high-end client more conscious of environmental, economic and social sustainability? I don’t know…but the backlash can affect us all.

    A wise and mindful consumer will create their own conscience. I think we will all face the same challenge eventually.

  2. Sustainable luxury – modesty, localism, and community are essential elements.

    I wonder if the future of sustainable luxury lies in urban design – the way cities are built and how we live in them. A place where people can live peacefully, and where symbols of modesty are bicycles and hearing children’s laughter.

    For example, an innovation could be a [luxury company] urban bicycle tour – a two hour stroll to a gallery, park and river.

  3. The look the feel and the understanding is different,lack of knowledge we are gonna face one more challenge in india is the lack of infrastructure ,by this i mean a tailors son or daughter does not want to follow the same tradition or family business of tailoring , they would probably want to study and become businessmen or engineers or doctors, work for a corporate house.