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Luxury goods: Premium brands respond to growing consumer awareness

By Dan Ilett

Published: September 15 2010 17:30 | Last updated: September 15 2010 17:30

A luxury is an indulgence rather than a necessity, so demonstrating it is “sustainable” is no easy task.

“[Sustainable luxury] is, of course, an oxymoron because luxury essentially means ‘not needed’, which goes against thinking around sustainable consumption,” says Dorothy Mackenzie, chairman of Dragon Rouge, a sustainable branding agency.

“However, if one considers a luxury is often a superior version of something that has a justifiable function, then there can be a case for the concept of sustainable luxuries.

“In fact, many of the factors that contribute to something being perceived as a luxury can support a more sustainable approach to consumption.”

Ms Mackenzie argues that tailoring and craftsmanship lead to an appreciation of the value of materials and the skill in design and creation. She says it creates a desire to use something for a longer period of time and has more intrinsic meaning.

She argues that sustainable luxuries, a little like Formula 1 racing technology for cars, could pave the way for how we design and use products in the future.

“We have to think of ‘luxury’ as being different from simply high-priced and premium,” she says. “Sustainable luxuries could be role models for a more sustainable approach to consumption overall. Use less resource and derive more value from it. Use things for much longer and don’t waste anything.”

Some 34 per cent of US consumers indicate they are more likely to buy environmentally responsible products today, according to the Cone Consumer Environmental Survey

Consumers and non-governmental organisations have put pressure on the luxury products industry that it has never felt before.

Greenpeace now ranks the top 18 technology brands in the world on their environmental efforts, forcing them to take note.

Luxury vehicles are ranked by the same government carbon performance statistics (and taxes) as any other car – meaning performance and fuel economy are linked to brand status.

Luxury brands have started to react. The Range Rover – one of the world’s most luxurious and stylish 4x4s, has long been regarded as a gas-guzzling “Chelsea tractor” by environmental protesters. Land Rover, the company that makes the car, has responded.

Earlier this year, Victoria Beckham fronted a campaign for Land Rover to show off a lighter and smaller version of the Range Rover – the Evoque. The company says this will have a front and four-wheel drive option that will emit about 130g per kilometre of carbon dioxide and achieve more than 58 miles per gallon on the 2.2 litre engine. This compares with CO2 output of 299g/km and 25 mpg on the 2002 2.9 litre Range Rover.

“Our customers want style, performance and the attributes expected of our cars. There is an increasing interest in green credentials and we expect it to become more important in purchasing decisions in the future,” says Phil Popham, managing director of Land Rover. “There is a move away from pure indulgence to muted signs of intelligent purchase around design, engineering and sustainability, so we are responding to that.

“However, there is a responsibility on business to lead the way for consumers and develop technologies and products that help them make better and more informed choices.

“Our aspiration is to be best in class on operations and customer product against [our] competitor set by 2018. To achieve this we’ve set some very challenging targets, which involve engaging our workforce to deliver through a programme called ‘environmental innovation’. Yes, the brand benefits but this is about being responsible and future-proofing our business.”

But how do you define “responsible” or “sustainable” actions? The terms are largely open to interpretation, as few globally and legally binding standards exist, making it difficult to validate such claims. As a result, industry associations are responding to their members’ needs and have started to interact with the NGOs to build frameworks for sustainable and ethical production.

For example, the Electronic Industry Code of Conduct promotes responsible business. Its members are just about every manufacturer of household technology. The code states that each member must adhere to a minimum environmental and social standard, ensuring things such as minimum age of workers and the correct disposal of hazardous chemicals.

And in the jewellery industry, the WWF recommends that consumers seek benchmarks or goods validated by organisations such as the Responsible Jewellery Council and the Framework for Responsible Mining.

“Some luxury brands are clearly aiming to adopt responsible and ethical raw material sourcing policies, such as De Beers avoiding conflict diamonds and Boucheron ensuring gold comes from socially responsible mines,” says Ms Mackenzie.

“Emphasising the features and values that make the product something that can have a much longer life than ‘everyday’ versions encourages more sustainable consumption. So own less but make it in a way that it lasts longer.”

Bang & Olufsen, the luxury sound systems firm, says it follows this exact approach when developing products for a life cycle of up to 15 years.

“Many households through­out the world have perfectly working products that are 20-30 years old,” says John Bennett-Therkildsen, vice-president of operations at B&O. “But we do make repairs and spare parts available for a long time after a product has ceased to be manufactured.

“In the design phase of every product, we carry out tests that simulate the dismantling process for the product’s disposal after 15 to 20 years of use to ensure our designs can actually be separated into the appropriate fractions.”

“This process also helps us improve the utilisation of waste in subsequent development projects.”

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Luxury goods: Premium brands respond to growing consumer awareness