How to Position a Luxury Brand as SustainableSeptember 10, 2021
A 2018 global survey by Accenture Strategy of 30,000 consumers in 35 countries indicated that nearly two-thirds of them (62%) find brands with high ethical values attractive. That’s potentially a problem for companies in the luxury sector, because people often see luxury goods as a wasteful self-indulgence and potentially damaging to the environment, especially if they are highly engineered or decorative.
Traditional approaches to improving a company’s ethical positioning — for instance, by adopting fair labor practices and using recycled or organic materials — may not work well for luxury brands. To begin with, marketers need to be careful to send the right signals on being eco-friendly to avoid customers interpreting sustainability messages as greenwashing. Also, past research suggests that consumers may negatively evaluate luxury brands that engage in corporate social responsibility (CSR). Other studies argue that consumers may even perceive that eco-friendly luxury products carry less status-increasing social capital than non-sustainable luxury products do. What’s more, focusing on the environment does not give luxury brands much room to differentiate themselves from non-luxury brands, which have long been active in sustainability.
We suggest a more intriguing strategy: focus on authenticity. We build our recommendation from our recent research, conducted among more than 1,900 customers for different high-end product categories (watches, perfumes and design furniture), that gives insights on how and why luxury brands can use authenticity to communicate their ethics.
Let’s begin by looking at how brands can signal authenticity before digging deeper into the results of our studies.
The Two Types of Authenticity
Consumers perceive brand and product authenticity in two ways: it is authentic if it can claim to be the “original real thing” or if it corresponds to a “genuine ideal.” This gives two sets of cues that marketers can use to signal authenticity: indexical and iconic.
Indexical cues of authenticity.
Here, marketers signal a product’s authenticity by establishing direct connections with its origins and makers. The fact that a piece of luxury furniture was designed by an Italian artist, produced by local artisans in an Italian village, and made of Italian wood and silk indicate that a it is truly an authentic Italian product. Here, the perception of authenticity is based on objective information (such as certificates of origin or the nationality of the designer).
Iconic cues of authenticity.
In this form, the product is a reproduction or a re-edited version of a past product — a new product whose design is based on the maker’s subjective perception of the original’s defining characteristics. In other words, if your Italian furniture maker opens a branch in France, with designers and producers inspired by the creative vision of the Italian team, the products of this branch…