What would you tell the industry big wigs?

Replies to This Discussion

Permalink Reply by Inge Herbert on March 16, 2009 at 6:47pm

Hi Jem,

my suggestion is to point at the opportunity to create and introcduce new products. Customers are longing for brands which are more authentic, "warm" and unique.

This is a time - also for big wigs in the industry - to re-think products and consider co-operation with small and emerging brands. There is an interesting article in The Financial Times Europe Weekend edition "crafted with care" describing cooperation between big-name designers and companies which link with local artisans in the developing world: the outcome are products which are less technological and have been produced using local crafts techniques.

Inge, South Africa

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Permalink Reply by Scott on March 16, 2009 at 7:59pm

Third party certification makes a difference; it helps ensure ethical sourcing and manufacturing and it provides consumers with an assurance the product they've purchased or will purchase are sustainable.

A number of studies indicate consumers will pay for sustainable goods and will be loyal to companies providing ethical products.

RugMark inspects and monitors looms in India and Nepal for illegal child labor. A beautiful rug is one made by skilled adult artisans.

Some articles/studies to check out:

WSJ Does Being Ethical Pay? - By REMI TRUDEL AND JUNE COTTE

Is There Consumer Demand for Improved Labor Standards? Evidence from Field Experiments in Social Labeling
Michael J. Hiscox and Nicholas F. B. Smyth, Department of Government - Harvard University

01/02/08 - Study: Shoppers Now Focusing More on ‘Green’ Gifts (from HFN)
NEW YORK–Concerns about environmental degradation, and less availability of discretionary spending
funds, combined to alter consumer holiday shopping this year.

An annual study by KPMG LLP found that consumers were more willing this year to consider a “green
quotient” in products, and check a product’s country of origin, before making a purchase. However, in
light of a worsening economy, fewer shoppers this season said they spent more than they had last
season.

Shoppers were more likely to purchase gifts “to fit their social conscience,” according to John
Rittenhouse, a partner at the firm. He added that 60 percent of survey respondents said they would
pay more for environmentally beneficial products, while 88 percent said they were “very concerned
about the environment.” In addition, 40 percent of shoppers said they now check the country of origin
before buying a gift, and almost a third said they would not buy a gift if it were manufactured in a
country of which they disapproved.

Rittenhouse credited the new environmental awareness largely to “recent publicity on the environment
and manufacturing issues in emerging markets.”

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Permalink Reply by Scott on March 16, 2009 at 8:07pm

Here is a bit more from the media Jem

What's fair about design?
With Fairtrade fortnight underway, Annie Deakin reveals interior design with a conscience
Friday, 27 February 2009

There’s more to Fairtrade than bananas, beards and coffee beans. It is trickling into every market sector, including the interior design industry. With Fairtrade Fortnight (23 February - 8 March) upon us, ethical trading is this month's hot topic.

Search for the perfect furniture with The Independent house and home database, powered by mydeco.
The holier than thou principles of Oxfam and Church Halls has hit the high street with Laura Ashley and John Lewis jumping on the bandwagon. Buying Fairtrade cotton bedding and bath linen is now as commonplace as snuffling out Fairtrade chocolate in supermarkets.

As worthy as it is, can the masses afford to buy Fairtrade in this sluggish economy? Apparently so. Recent research from the Fairtrade Foundation shows that despite the financial gloom, 92 per cent of shoppers still say they are prepared to pay extra for a product considered ethical. It's cheering stuff, especially because the majority of consumers chose Fairtrade as the preferred kind of ethical merchandise. Be it a bunch of roses or a Berber rug, buying something labelled Fairtrade is a promise that nobody was exploited unfairly in its creation. Such a guarantee may cost extra but stats show we’re willing to pay more for this reassurance.

While London investment bankers are fighting for lavish bonuses, two billion people still survive on under $2 a day. Less than my morning Starbucks addiction, it's hard to fathom the figures. Just as we sent children up chimneys in Victorian England, developing countries still exploit infants in flower farms and carpet sweatshops so that we have beautiful furnishings at home. We need to question low-priced home furnishings and throwaway fashion.

As Sir Stuart Rose, Chief Executive for Marks & Spencer highlighted, the business maths of dirt-cheap products doesn’t add up. "How can you sell a T-shirt for £2 and pay the rents and pay the rates and pay the buyer and pay the poor boy or girl who is making it a living wage? You can't. I don't care what anyone says about margin structure, about the efficiency of the business, or about a low-cost business. Frankly it is a shame on us all in this country that we don't take a stronger view on the issue of ethical trading."

Marks & Spencer has long been ahead of its high street competitors when it comes to taking an ethical lead. Their worthy five-year plan is to re-engineer the brand to become a carbon neutral, zero-waste-to-landfill, ethical trading, sustainable-sourcing, health-promoting and Fairtrade-supporting business. Their eco-friendly Fern Collection of sofas and armchairs are the ultimate in worthy design. Upholstered in Fairtrade-certified cotton, the sofa frames are created from sustainable timber, plastic drinks bottles (122 for every two-seater-sofa), Ecoflex foam and fiber from 80 per cent post-consumer waste.

Rose has said of Marks & Spencer, "I tell you one thing - I know which camp I would rather be in and I can sleep straight in bed at night. We are not perfect but you can go to any factory that we deal with at any time and be sure that we have worked hard to uphold the highest ethical standards."

While officially labelled Fairtrade sofas are still hard to come by, sustainable, Fairtrade and organic flowers are blooming in popularity. The process of growing flowers is labour-intensive which shouts trouble for vulnerable workers. Last week, Amnesty International pleaded with Canadian parliamentarians to think twice about buying carnations from Columbia where children, as young as ten, toil the flower farms.
Roses have many thorns but those grown at Oserian Farm, in Kenya, can be bought with a clear conscience. Oserian, the country’s prime exporter of fresh-cut flowers, supplies John Lewis, Sainsbury's, Tesco and Waitress. For the ultimate gift, pick the Fairtrade Frosted Fair from John Lewis. It is a charming Fairtrade certified bouquet of statice, lisianthus, carnations, creamy roses and gypsophila. Located next to Lake Naivasha, Oserian farmers are not solely interested in growing healthy flowers. As part of their Fairtrade promise, they provide healthcare, housing and education to the farmers’ families.

Nobody - bar Oliver Twist Fagan-types - would willingly display furniture or flowers produced by child labor. And yet, the booming rug and carpet market still relies on illegal child labor in the Far East. To ensure your rugs have a clean history, look for the RugMark label imprinted on products sold at Laura Ashley, Dwell and Debenhams. An international non-profit organization, RugMark aims to eliminate child and adult slave labour from the South Asian carpet industry within the next decade. Available at the mydeco.com design boutique, Barbara Anne Cooper's limited edition malachite silk wall hanging is hand knotted in Nepal to RugMark standards. Handmade in India, the Fairtradecertified Aria floral rug, exclusive to B&Q, shows how cost, style and ethical standards can work together.

Being associated with child and slave labour is never cool. When a mug of Fairtrade-certified coffee is sold, we know the farmers of the coffee beans get a guaranteed price and good working conditions. With sofas, flowers and rugs stamped similarly, Fairtrade is beginning to go bananas for interior design.

What's fair about design? - Annie Deakin, Interiors - The Independent http://www.independent.co.uk/life-style/house-and-home/interiors/an......
1 of 3 2/27/2009 10:57 AM
add up. "How can you sell a T-shirt for £2 and pay the rents and pay the rates and pay the buyer and pay the poor boy
or girl who is making it a living wage? You can't. I don't care what anyone says about margin structure, about the
efficiency of the business, or about a low-cost business. Frankly it is a shame on us all in this country that we don't take a
stronger view on the issue of ethical trading."
Marks & Spencer has long been ahead of its high street competitors when it comes to taking an ethical lead. Their worthy
five-year plan is to re-engineer the brand to become a carbon neutral, zero-waste-to-landfill, ethical trading,
sustainable-sourcing, health-promoting and Fairtrade-supporting business. Their eco-friendly Fern Collection of sofas and
armchairs are the ultimate in worthy design. Upholstered in Fairtrade-certified cotton, the sofa frames are created from
sustainable timber, plastic drinks bottles (122 for every two-seater-sofa), Ecoflex foam and fiber from 80 per cent
post-consumer waste.
Rose has said of Marks & Spencer, "I tell you one thing - I know which camp I would rather be in and I can sleep straight
in bed at night. We are not perfect but you can go to any factory that we deal with at any time and be sure that we have
worked hard to uphold the highest ethical standards."
While officially labelled Fairtrade sofas are still hard to come by, sustainable, Fairtrade and organic flowers are blooming
in popularity. The process of growing flowers is labour-intensive which shouts trouble for vulnerable workers. Last week,
Amnesty International pleaded with Canadian parliamentarians to think twice about buying carnations from Columbia
where children, as young as ten, toil the flower farms.
Roses have many thorns but those grown at Oserian Farm, in Kenya, can be bought with a clear conscience. Oserian, the
country’s prime exporter of fresh-cut flowers, supplies John Lewis, Sainsbury's, Tesco and Waitress. For the ultimate gift,
pick the Fairtrade Frosted Fair from John Lewis. It is a charming Fairtrade certified bouquet of statice, lisianthus,
carnations, creamy roses and gypsophila. Located next to Lake Naivasha, Oserian farmers are not solely interested in
growing healthy flowers. As part of their Fairtrade promise, they provide healthcare, housing and education to the
farmers’ families.
Nobody - bar Oliver Twist Fagan-types - would willingly display furniture or flowers produced by child labor. And yet, the
booming rug and carpet market still relies on illegal child labor in the Far East. To ensure your rugs have a clean history,
look for the RugMark label imprinted on products sold at Laura Ashley, Dwell and Debenhams.
An international non-profit organization, RugMark aims to eliminate child and adult slave labour from the South Asian
carpet industry within the next decade. Available at the mydeco.com design boutique, Barbara Anne Cooper's limited edition malachite silk wall hanging is hand knotted in Nepal to RugMark standards. Handmade in India, the Fairtradecertified Aria floral rug, exclusive to B&Q, shows how cost, style and ethical standards can work together.
Being associated with child and slave labour is never cool. When a mug of Fairtrade-certified coffee is sold, we know the farmers of the coffee beans get a guaranteed price and good working conditions. With sofas, flowers and rugs stamped similarly, Fairtrade is beginning to go bananas for interior design.
Annie Deakin is Editor of mydeco.com

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Permalink Reply by Deidre on March 16, 2009 at 8:57pm

I would tell them that even though the urge is to cut costs and cut prices that right now is the time to focus on true luxury, on goods and services that have lasting appeal. I believe that the current economy has pared away some of the obsession with logos and brand names that flourished on the lower end of the luxury spectrum. As some of those buyers have scaled back the consumers in the upper tiers of luxury are looking at perhaps buying less but still buying better and that sustainable luxury is an intrinsic part of that. The motivation of these consumers are different than other buyers, they can still afford luxury and they want goods that offer both quality and substance.

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Permalink Reply by Aleksandra on March 16, 2009 at 9:02pm

Hi Jem,

I believe in "less is more" so I would opt for going back to the beginning, when luxury brands' expertise in a given field was their differentiation factor. They should think how to refocus to what is really their core competence and not to exploit the brand anymore. The best direction for the moment is towards regaining expertise..,

Best & Good Luck.
Alex

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Permalink Reply by Jem Bendell on March 17, 2009 at 4:14pm

Yes, this is my sentiment. Thanks for sharing. However, the brand managers and group level executives may wish to see a vision that gives them a role in this future of returning to craft. Can a brand stand for something that cuts across sectors? Perhaps if it helps its craftspeople achieve supreme social and environmental performance - after all we all need support. The "parenting advantage" of luxury group conglomeration may in future be about how the group coordinates learning around sustainability. Currently some group level execs say its a brand issue, and dont do that much at group level.

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Permalink Reply by Scott on March 16, 2009 at 9:48pm

Jem,

Sorry for the awful cut and paste...ugh!

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Permalink Reply by Jem Bendell on March 17, 2009 at 9:23am

Thanks for all the suggestions thus far.

The "luxury industry" is defined by the public's sense that its offerings are unnecessarily expensive. There is little else that connects a yacht, bag, car, watch, or trip to the spa. We can define luxury in terms of elite quality, design and experience, but that is our aspiration for what it might mean. Instead, when we look at the reality of things perceived as luxury, they are not all elite in quality, design or consumer experience. Therefore, the one glue that holds the industry together is the public's sense that its offerings are unnecessarily expensive.

Industry leaders may not wish to speak crudely like that, as it undermines the feel of their industry and brand. But thats the truth of it, given current practice, as far as I can see.

The current problem facing the industry, as a whole rather than in its particular subsectors, is therefore fundamental. The economic crisis means both the ability and motivation of consumers to buy what is unnecessarily expensive are waning.

Their ability to buy is waning, because people are worrying about their economic situation. Their motivation to buy is waning, because people are wondering whether buying what is unnecessarily expensive will be well regarded in this current economic climate.

Slashing prices is not a response for a brand wanting to maintain its "luxury" position.

So what then?

The answer is to turn the unnecessarily expensive into the necessarily expensive. By making the brands contribute the most to society and the environment, and providing the most enduring products and experiences to their consumers.

Lets remember one can buy a fairtrade cotton Tshirt at Sainsbury's for 3.50 GBP. So social and environmental excellence will not define the luxury industry, but will be part of its future as providing what is necessarily and justifiably expensive.

Therefore, although sustainability has been seen as a "nice to have" if one has the money and time to invest in it, now sustainability is becoming the "least to have".

These suggestions are based on an assumption that the current economic crisis will not pass within a year. All evidence I have suggests that it wont, and that a fundamental shift in Western relations with the rest of the world will result, with implications for culture, and therefore design and fashion.

Thoughts?

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Permalink Reply by Jem Bendell on March 17, 2009 at 3:20pm

Thanks Hugo. By "least to have" I mean the minimum required to be in the luxury business. i.e. as in "the least" or "at least". However, it seems that the phrase is not clear to some. I wanted a phrase other than "must have" - but that might be more obvious.

I find the statistics relating financial performance of companies to their social responsibility to often be spurious, and do not clarify which is the independent variable. In addition they often rely on indicators of social responsibility such as sustainability reports - which could instead be regarded as much an indicator of having a more negative social or environmental impact (thus leading to pressure to report) than a company which does not report.

However, the situation of the car companies is illustrative about what happens when you dont eco-innovate.

Do you have specific examples of credible data about how companies are performing that you can share with the group?

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Permalink Reply by Jem Bendell on March 17, 2009 at 4:08pm

Thx.

My point on the numbers is that many correlations of sustainability performance with financial performance are not robust. I examined some of these when doing my phd a number of years ago and the methodological flaws at that time were big. But things may be different now. I would like to unpack the evidence of the claim that companies are doing better in the downturn if they perform better on sustainability. I will also make my investigations on this interesting angle.

I agree that reminding people of the business case is always important.

However, for luxury firms the business case goes far beyond the level of consumer awareness, and the other factors typically described. The strategic challenges we outlined in Deeper Luxury describe why.

In my posting above I made no criticism of the industry. Did you see criticism implied in the definition I gave? Im being frank about what appears the most common denominator convening people as a "luxury" industry, when they are in fact working in such different sectors. As experts in jewelry, or spas, or fashion, there are different issues involved. But what do they face as a collective called "luxury"? That depends on what that term means.

I used the term "unnecessarily expensive" to describe a consumer view - that the function that the item or service fulfils is not necessary and is expensive, or if it is necessary, then is fulfilled in a way that is more expensive than necessary.

Is there something wrong or negative about people wanting things or providing things that are "unnecessarily expensive"? That is a value judgment, and depends on context. We like to treat each other and ourselves and gifts are part of many spiritual traditions, so I dont see it as automatically negative.

The point I wish to make is that the crisis means it is no longer as attractive to consumers to view things as unnecessarily expensive, so this presents a deep challenge to those seeking to be seen as "luxury". This makes the business case even deeper. Its about a shift in consumer perceptions that could pose as fundamental a challenge to the luxurty industry as digital downloading does to the music biz.

Thx for the feedback - its really useful to hear some ideas and fly some ideas with you through this forum.

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Permalink Reply by Leslie Hartford on March 17, 2009 at 11:15pm

What does "expensive" mean here? I would agree that needing about 4-6 crocodiles to make a bag is unnecessarily expensive to our ecosystem. But natural resources are still too often not part of the equation.

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Permalink Reply by Leslie Hartford on March 17, 2009 at 7:31pm

Given the current state of our planet's global warming and the devastating effects this has on our ecosystems, luxury is being redefined as we speak. Luxury is having access to potable water, to pesticide-free organic vegetables and fruit, to living a stress-free life, to having the freedom to choose and move freely... and the list goes on. In brief, we need to go back to human essence and to living simple and high-quality lives where true happiness is a priority and where greed is no longer glorified. Luxury brands need to assess how they are contributing to climate change and the deterioration of our ecosystems and engage in the exercise of reducing their impacts and reinventing themselves, aligning themselves as what is perceived as true luxury today. This needs to be done genuinely, as we've entered another age - the knowledge and information age- where greenwashing would only mean the death of companies who cheat consumers and - humanity. Wishing you the best in your speech and remember that you have a unique opportunity to make change happen - first in the minds of people.

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