Can Luxury Brands Sustain Themselves by Becoming Sustainable?


Once upon a time, a luxury brand needed to do nothing more than demonstrate its exclusivity to be coveted by wealthy consumers.

But in today’s redefined marketing environment, says the UK’s Guardian, “more awareness develops around where products come from and how they are made. … Customers feel conflicted about what they really ‘need’ in this new economic landscape, discouraging purchases that previously wouldn’t have garnered a second thought.”

This new brand of consumer consciousness creates an interesting dilemma for luxury brands as they move into the future.[more]

While the luxury market is expected to rebound next year, “luxury brands have a lot to gain by conveying they are committed to corporate social and environmental responsibility.” The Guardian cites handbag/accessories company Kate Spade New York and retailer Nordstrom as two examples of luxury brands that are leading the way in sustainability and corporate social responsibility.

Kate Spade is expanding its partnership with Women for Women International in a pro-social effort called Hand in Hand to provide job opportunities in war-torn Afghanistan. Starting in 2012, Kate Spade will create about 5,000 products annually with Afghan women with the goal of making up to 15,000 units by 2013. The women’s brand has been working with Women for Women International since 2005 to promote micro-enterprises for women in communities throughout Bosnia and Herzegovina, as well as in Kosovo and Rwanda.

Nordstrom, meanwhile, next year plans to open a new store in downtown New York City that will test a novel concept. The store, which will not bear the Nordstrom name, intends to donate all earnings to nonprofit organizations. Instead, the West Broadway store in Soho “is a unique, philanthropic-based store concept,” according to Nordstrom.

Moves like these by luxury brands are likely to become more and more part of how they do business, because “the values luxury brands stand for align perfectly with green practices,” as the Guardian notes. “These include timelessness, durability, innovation, craftsmanship, and a meaningful brand and retail experience — all characteristics that mirror the underlying goals of sustainability and social responsibility.”

All the while, luxury brand marketers will have to think carefully about just how to “reflect this new customer mindset” while still maintaining their brand identity and image.