Luxury Institute News

January 27, 2016

2016 Predictions for the Luxury Industry: Sustainability and Innovation – Executive Summary

Positive Luxury
By: Josie Tutty
January 20, 2016

In this report, we identify the most impactful events of 2015 and look forward to the biggest trends of 2016 in the world of luxury and sustainability.

2015 propelled the luxury industry forward when it comes to how they think about sustainability. The biggest shift, (and one of the most important ones to help accelerate changes from the top down), is the rise in demand from investment communities for sustainable business models. For years, investors have focused on a company’s financial performance and determined if purchasing stock was worth it based on if the company was profitable. Now, sustainable investing strategies are growing, as investors are realising that performance is intertwined in future social and environmental impact.

C-suites are starting to realise that in order to keep creating value, and accelerating growth they must invest in and improve how their company impacts society as a whole, and most importantly how they communicate that positive impact.

There is one group in particular that aligns with this concept more than any other. Millennials are almost three times as likely to look to work for a company because of its social and environmental practices.

And the demand from affluent millennials doesn’t stop at employment opportunities. 2015 saw millennials using their spending power more and more to vote for companies who positively impact society and the environment – in fact – they are twice as likely to buy from brands with strong management of environmental and social issues.

2015 was also the year governments and world leaders took action too. With the launch of the Sustainability Development Goals, COP 21, and the passing of the Modern Slavery Act, creating, maintaining and growing companies with a positive social and environmental impact will soon become a legal obligation.

All these changes have left luxury companies with no option but to improve as the potential for sales and stocks to plummet increases, and the hand of the law hangs over them.

With that in mind, we look forward to 2016 and the trends that will help luxury companies continue on their sustainability journey. New innovations, communication techniques and constant evaluations of how consumers view brands will allow companies to keep marching forward in the fight to stay at the top of their game in a world that demands socially and environmentally responsible brands more than ever before.

You can purchase the full report by contacting hello@positiveluxury.com

Source: http://blog.positiveluxury.com/2016/01/2016-predictions-luxury-world-sustainability-innovation/

 

January 26, 2016

Sustainability efforts to boost investor interest in luxury houses: report

Luxury Daily
By: Jen King
January 26, 2016

Forty-six percent of CEOs agree that climate change and the scarcity of resources will transform their business, according to a new report by Positive Luxury.

Positive Luxury’s “2016 Predictions for the Luxury Industry: Sustainability and Innovation” report examined impactful events from 2015 to forecast how these world happenings will impact luxury going forward into 2016. Sustainability is proving itself more than just a fad, with consumers becoming increasingly aware and conscious of how and what they purchase, and as a result investors are putting more weight into sustainable business models.

“Companies across all industries face material business risks and opportunities, which come about from regulatory and market trends on environmental and social issues,” said Diana Verde Nieto, co-founder of Positive Luxury, London.

“When sustainability is viewed as a cost, or it lacks alignment with the company’s corporate strategy, the business underperforms and the material risks are not addressed,” she said. “Therefore, sustainability will help brands to de-risk their business and remain competitive.”

Together with the Luxury Institute, Positive Luxury conducted one-on-one interviews with key opinion leaders in the luxury lifestyle space, NGOs, The World Economic Forum and CMOs, CSOs and CEOs from top luxury brands and groups. Participants included LVMH, Kering, Forevermark, IWC and the British Fashion Council, among others.

Green machine
Over the course of 2015, governments and world leaders worked to pass legislation and develop strategic plans to protect the environment and underprivileged workers in developing nations.

In the last year, the Sustainable Development Goals were introduced, the Modern Slavery Act was passed and global leaders gathered to attend the COP21 summit in Paris. These milestones, and others, reflect a shift in CRS methods that extend beyond “good PR,” but rather show an increased consciousness of ethics and legal obligation.

While world leaders gathered in Paris to discuss climate change during COP21, French luxury conglomerate LVMH saw an opportunity to tout its sustainability practices while the world narrowed its lens on the topic.

Shared in a series of posts on its corporate social account on Facebook, LVMH offered insights into various programs and strategies implemented by the conglomerate and brands found within its stable, which includes Louis Vuitton, Bulgari and many others. Transparency has become a necessity as consumers are increasingly aware of and concerned about how and where the products they buy are made and the social and environmental impact they may have (see story).

For luxury, these international events have left brands with no other option than to approve their processes. While consumer opinion once drove sustainability practices, now the potential for sales and stock prices to fall increases, as does attention from lawmakers.

During its research for the report, Positive Luxury found that consumers are aware of the power they possess and know they can make a difference. Beyond being vocal about social and environmental causes, consumer power is also based on the product purchases they make.

Likewise, C-suite executives have found that to keep brand value and continue growth, an investment in sustainability performance and practices is a must. Also, given transparency’s importance in the minds of consumers, the way in which brands communicate their positive impact has also grown.

French luxury conglomerate Kering, for example, is helping the world visualize its environmental impact with an interactive environmental profit and loss statement.

Kering’s results page on the conglomerate’s Web site contains a grid depicting the various steps in production and environmental categories in which it could make an impact, with each square containing a circle in relation to the impact that has been made. Kering’s transparency shows its dedication and the steps it has taken while also helping other companies to examine where they can make changes one step at a time (see story).

The color of money
While there has been growth in marketing efforts boasting sustainability practices and an increase in transparency as to how products are manufactured, 2016 will see a higher demand from investors for business with sustainable business models.

As mentioned above, nearly half of brand CEOs agree that climate change and resource scarcity will transform their business, making environmentally-sound choices even more significant.

Luxury houses such as Saint Laurent and Christian Dior have implemented tactics that are environmentally sound. For instance, three Saint Laurent storefronts have been given the highest LEED certification (see story), while Dior has incorporated responsible lighting in a number of its international boutiques.

Additionally, brands are becoming more conscious of protecting the resource supply chain. Prada, for instance, purchased the French tannery Tannerie Mégisserie Hervy to ensure the skills held by its workers are preserved (see story) and in a similar move, Chanel purchased French lamb hide tannery Bodin-Joyeux in 2013 (see story).

The shift toward more sustainable models has also piqued the interest of investors, with 71 percent of individual investors showing interest in sustainable investing based on environmental, social and governance (ESG) criteria.

“As the importance of sustainability intensifies for businesses, the financial markets are increasingly forced to address the challenges posed to them,” Ms. Verde Nieto said. “These challenges come about from the realities of natural resource scarcity, the effects of unabated carbon-emissions, rapid urbanization and the widening wealth inequality, just to name just a few.

“From an investment point of view, the time horizon relevant to sustainability-related risks and opportunities is neither uniformly long-term nor short-term,” she said. “Some of these risks and opportunities are upon us right now, powerfully shaping the current business environment, and must be dealt with in the short term.

“This was validated by the outcome of COP21, where for the first time in history, the 195 countries attending agreed to take measures to mitigate climate change, recognizing that this is an issue that is affecting everyone.”

Source: https://www.luxurydaily.com/sustainability-efforts-to-boost-investor-interest-in-luxury-houses-report/

August 7, 2012

10 Things Apple Won’t Tell You

From customer service to app safety and even how its devices affect our relationships, here are 10 things Apple won’t likely tell you about its products and its business.

By Quentin Fottrell
SmartMoney
August 6, 2012

1.”Our customers are worn out.”

All that initial excitement over the first iPhone or iPad has quickly given way to what analysts are dubbing “upgrade fatigue” — with even Apple’s most loyal customers upset about the steady stream of newer models. In fact, when people buy Apple’s latest product, the company is usually already preparing its replacement, says technology consultant Patchen Barrs, who has owned 25 Apple products over the last 20 years. “Everything we buy from them is already out of date,” he says. Take a count: Since 2001, there have been six iPods, two iPod minis, six iPod Nanos, four iPod Shuffles and four editions of the iPod Touch. Apple has released five iPhone models since 2007 and has had three iPads since 2010.

Of course, newer models have their upsides: They’re usually slimmer, faster and have additional features like better cameras and improved screen quality. And Apple, which declined to comment for this story, has said that such improvements more than justify the fast pace of their new additions. (In March, for example, Apple spokeswoman Trudy Muller said the latest iPad delivered a “stunning” screen display.) But that argument isn’t enough to appease some cash-strapped consumers. Almost 50% of consumers say they’re increasingly unwilling to buy new products for fear that they will be rendered outdated by even newer versions, according to a recent survey of 2,000 people by Marketing Magazine in the U.K.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute: http://www.marketwatch.com/Story/Story/?guid={61E63842-DFED-11E1-961B-002128049AD6}

June 28, 2012

Wealthy Shoppers Don’t Buy into ‘Lux-Anthropy’

By Robert Frank
CNBC
June 27, 2012

The luxury world  is filled with talk about “social good.”

The wealthy are going Green, we’re told. They care about how companies treat their workers and communities. They prefer to practice responsible Lux-Anthropy, which maintains you can buy that expensive handbag or necklace and still feel good about its positive impact on mankind.

But apparently, there limits to Lux-Anthropy.

A new survey from the Luxury Institute shows that just 39 percent of consumers with more than $150,000 in income are willing to pay a premium for brands that champion high ethical standards.  And the number of affluent consumers who seek out ethical brands is down by 11 percent since 2007.

“Even wealthy consumers have de-emphasized social responsibility as this economy focuses everyone on price value and away from social issues,” says Luxury Institute CEO Milton Pedraza.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute: http://www.cnbc.com/id/47979078

June 26, 2012

Social Responsibility Is Nice But Not Worth Paying for in Today’s Economy, According to Wealthy Consumers Surveyed by Luxury Institute

(NEW YORK) June 26, 2012 — In a new survey by the independent and objective New York-based Luxury Institute, “Corporate Social Responsibility: The Wealthy Consumer’s Viewpoint,” U.S. consumers earning at least $150,000 per year define socially responsible corporate behavior, rate companies and divulge importance of socially responsible practices in shaping purchase decisions. Responses were compared to those from the same survey in 2007.

Most (82%) wealthy Americans define social responsibility by a company behaving ethically with employees, customers and suppliers. Environmental behavior and philanthropic actions are both named by respondents as an essential component of CSR (58%).

Almost half (45%) of wealthy consumers say they seek out brands with high ethical standards, but only 39% of these shoppers would be willing to pay a premium. That’s down from 56% who would pay a premium in 2007. Apple, BMW, Coach, Lexus, Mercedes-Benz, Nordstrom, Starbucks and Whole Foods are frequently cited as highly ethical standouts.

Twenty-seven percent of wealthy consumers learn about companies’ socially responsible behavior via Facebook or Twitter. That’s up from 8% who received their information from social media in 2007. Reading news articles is the most popular (52%) way to learn of CSR efforts, down from 64% five years ago.

“Even wealthy consumers have de-emphasized social responsibility as this economy focuses everyone on price/value and away from social issues,” says Luxury Institute CEO Milton Pedraza. “Nevertheless, we see that luxury and premium brands that are socially responsible do better even during recessions because doing well by doing good is a universal and timeless concept.”

Respondents reported average income of $307,000 and average net worth of $3.1 million.

About Luxury Institute (www.LuxuryInstitute.com)
The Luxury Institute is the objective and independent global voice of the high net-worth consumer. The Institute conducts extensive and actionable research with wealthy consumers about their behaviors and attitudes on customer experience best practices. In addition, we work closely with top-tier luxury brands to successfully transform their organizational cultures into more profitable customer-centric enterprises. Our Luxury CRM Culture consulting process leverages our fact-based research and enables luxury brands to dramatically Outbehave as well as Outperform their competition. The Luxury Institute also operates LuxuryBoard.com, a membership-based online research portal, and the Luxury CRM Association, a membership organization dedicated to building customer-centric luxury enterprises.