Luxury Marketing Session 6 – CSR PDF
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KEDGE Business School
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This document is a presentation on Luxury Marketing, Session 6 – CSR. It outlines the concept of corporate social responsibility, its role in commercial activities, focusing on the aspects of social and environmental concerns, and the influence of stakeholders and consumers.
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Luxury marketing Session 6 – Luxury and CSR Luxury Marketing Session 6 – CSR Corporate social responsibility When firms voluntarily take into account social and environmental concerns in their commercial activities and relationships with stak...
Luxury marketing Session 6 – Luxury and CSR Luxury Marketing Session 6 – CSR Corporate social responsibility When firms voluntarily take into account social and environmental concerns in their commercial activities and relationships with stakeholders. Put differently, it is a way for firms to contribute to sustainable development. 14/10/2024 3 Sustainable development “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” Brundtland It is based on several pilars: economic social society environmental 14/10/2024 4 Stakeholders Civil society Customers Competitors Firms Employees Investors Suppliers State Any person or group that influences or is influenced by the firm’s activities. 14/10/2024 5 CSR as a result of stakeholder pressure Means of pressure Attracting a new audience - boycott Sustainability is at the heart of GenZ and GenAlpha’s - smear campaign concerns Civil society and they will represent 1/3 of the luxury - consumer associations market in 2030 (Bain). 64% of millenials report their purchases are influenced by CSR concerns (BCG). Customers Competitors Increasing attention towards Firms sustainability In 2020, an estimated 38% of consumers Employees switched from their preferred brand Digital development towards a more sustainable or durable Digitalization disputes one. In 2019, 56% reported researching Investors traditional trade models and Suppliers CSR policies before buying. (BCG) State increases consumer interest towards C2C and second- hand. In 2019, 34% of luxury consumers engaged in selling on the second hand market and 26% in buying. 14/10/2024 6 CSR as a result of stakeholder pressure Means of pressure Civil society - calls for boycott or strike - smear campaigns, bad buzz Customers - protests - pressure of NGOs, unions, lobbies… High expectations towards the sector Competitors The general public considers that luxury brands have the financial means and international reach to Firms actively engage in social causes. (Colbert report) Employees Social responsibility is 15% more important for luxury brands than for others. (Kantar) Investors Suppliers State 14/10/2024 7 CSR as a result of stakeholder pressure Means of pressure - competitive advantages Civil society based on CSR - battle of images Customers CSR as an alignment strategy In 2019, 32 firms from the Competitors fashion and luxury industry signed the « fashion pact » in Firms favor of the climate, biodiversity, Employees ocean protection (Kantar). Investors Suppliers A strategic issue State In 2019, 71% of the professionals from the luxury industry consider CSR as a « top priority », 66% as an « opportunity to innovate », 60% as a « way to attract the young consumers ». (BCG) 14/10/2024 8 CSR as a result of stakeholder pressure Civil society End of cycle for luxury investments? Luxury firms are refuge values for investors in Customers 2023, but this trend is threatened by the sector’s dependence with China. (Boursorama) Competitors Means of pressure Firms - investment - disinvestment Employees Investors Suppliers State Staying in the loop Decarbonation and generative IA are believed to be bright perspectives for the luxury industry (Bain). 14/10/2024 9 CSR as a result of stakeholder pressure Durable legislation Civil society Since 2019 in France, la loi PACTE prompts firms to take social and environmental concerns into account. Customers Since 2015, UN sustainable development goals recognize firms as key actor of the ecological Competitors transition, fight against social inequities etc. … Firms Employees Investors Suppliers Means of pressure State - awareness - laws and regulations 14/10/2024 10 CSR as a result of stakeholder pressure Relocation programs Civil In 2023, thesociety fashion and luxury comittee highlighted the need to go back to « made-in France » to Customers preserve French know-how. Activities being currently outsources in Eastern Competitors Means of pressure Europe and Portugal. - engage/disengage in Firms partnerships with the firm Employees - strategic ressources Ressource strain Scarcity of ressourcesInvestors (such as alligator Suppliers leather) or the marred reputation of State ressources (such as diamonds) put pressure on companies to innovate or internalize their production. 14/10/2024 11 CSR as a result of stakeholder pressure Means of pressure - disengagement Civil society - decrease in productivity - know-how loss - protests Customers - strikes Competitors - recruitment difficulties Firms Employees Investors Suppliers State Strain on human resources In France, 65% of job ads for craftsmen positions are vacant in the textile and leather industry. The transmission of know-how is threatened. (rapport Colbert) 14/10/2024 12 Exercise Civil society Customers Competitors Employees Investors Suppliers State Find out which stakeholder pressures led Burberry to become the most responsible firm in 2022. 14/10/2024 13 Stakeholder pressure on Burberry Customers Employees Suppliers State Investors Competitors Civil society 2018: 2017: a Unknown 2022: royal Unknown Scandals in the 2018: #boycottburber complaint was warrant luxury industry: « business of ry trending filed by 643US threatened Dolce & fashion » because unsold employees who with the Gabbana and website calls for stocks were had not been Queen’s the cancelled boycott due to burnt down by paid overtime passing fashion show in burnt unsold the firm Shanghai, etc stocks 2017:accused of harassment Competitor The 2019 and payment CSR: Bcorp for winter problems by Chloé, collection was employees in inclusivity accused of France, which council at promoting led to a strike Prada, Gucci suicide changemakers, etc 14/10/2024 14 Luxury marketing Session 6 – The complex relation between luxury and CSR Luxury and CSR: convergence points Excellent quality Durability Limited production LUXURY CSR Craftsmanship promotion Sturdiness Timelessness 14/10/2024 16 Attitude-behavior gap Need for sustainable consumption because of Need for practical consumption altruistic motives because of individual motives CSR actions - Lack of information on Perceived quality CSR engagements Loyalty - Different takes on ethics Trust - Practical aspects are Purchase Willingness to defend incomptaible ith CSR.... 14/10/2024 17 Fallacy of clean luxury Trivialisation of behavior Production secrets - Minimize impacts - Bad assessment of brand ethics - Find noble reasons for behavior - No attention from consumers COMMON BELIEFS #1 Prestigious and valuable products have little negative social and environmental impacts. #2 Luxury is clean. Buying luxury products is an ethical and engaged consumption behavior. 14/10/2024 18 The added value of CSR for luxury firm Consumer engagement & loyalty Strengthening firm values thanks to CSR Quality improvement through chain value control Reputation Innovation opportunities 14/10/2024 19 Luxury and CSR: points of difference Luxury CSR Associated with overconsumption, Associated with ethics, reasoned pleasure, abundance consumption and moderation Conspicuousness, individualism and elitism are incompatible with CSR values Luxury consumption is perceived as a Sustainable consumption is perceived as a hedonic phenomenon utilitarian phenomenon Luxury products are purchased less frequently but also used less frequently. → Not necessarily more eco-friendly than other products per use 14/10/2024 20 CSR, a slippery slope for luxury Opportunism Hypocrisy Failures 14/10/2024 21 Recurring accusations Raw materials supply Working conditions Animal cruelty Environment destruction Polluting production process 14/10/2024 22 Luxury marketing Session 6 – CSR in luxury Environmental pilar – challenges Scarcity of resources Contentious raw materials Innovation on materials Supply chain control Transparency 14/10/2024 24 Environmental pilar – actions Ecofriendly gestures Education 14/10/2024 25 Environmental pilar – actions Supply chain control Repairs Using all parts of the R&D investments Durable resources 14/10/2024 resources 26 Environmental pilar – actions Rent Upcycling Second hand 14/10/2024 27 Focus on second hand 14/10/2024 28 Focus on second hand Basic trends - changes in the perception of second hand - affordability Market attractiveness - sustainability - 70% consumers would like to buy - digitalization second hand directly from luxury brands. (BCG) - 74% consumers would like luxury firms to certify second hand products Meeting needs sold through. (Bain) - buyers: social climbing, circular economy, uniqueness etc - sellers: material detatchment, decreasing guilt of luxury purchase, etc 14/10/2024 29 Social pilar – challenges Decreasing attractiveness of crafts professions Strain on HR Know-how loss Need for public-private partnerships 14/10/2024 30 Social pilar – action Engagement in education Awareness campaigns Establishments dedicated to knowledge Employer brand 14/10/2024 31 Society pilar – challenges Catch up with other sectors that are more advanced on the society pilar Become an active member of the community Strengthen the reach and reputation of the engaged luxury brand in the eye of consumers and the general public 14/10/2024 32 Society pilar – actions Engagement in social causes Ethics as a firm policy Patronage Partnerships with other luxury brands Certifications 14/10/2024 33 CSR at Chloé’s Explain how Chloé implements CSR at the environmental, social and society levels. Environmental Social Society 14/10/2024 34 CSR at Chloé’s In general - establishment of a dedicated CSR council with external experts Social - recruitment based on diversity and inclusivity - publication of a gender-equality index, engagement for women - creation of a social impact index in collaboration with the fashion institude Society - 30% supplies in fair trade (agreement with the world fair trade association) - open source diffusion of the social impact index - several partnerships with various actors to improve social and environmental pilars - digital passport for product transparency - engagement with UNICEF for women and girls Environmental - 90% low-impact materials - environmental impact report on biodiversity - decrease in water consumption, greenhouse gas emissions - engagement against animal cruelty and for sustainable resources - control of the environmental impact of events and packagings 14/10/2024 35