How I (Almost) Broke up with my Handbag
It all started with a bag. And not just any bag, mind you: a stunning, creamy buttery leather peach-colored handbag, made all the more lovely by its precious gold detailing and delicate woven handle that fit ever so perfectly in my hands. Oh, and did I mention that this divine creation cost $2,800?
Such is the allure of luxury goods and--for me in particular--handbags. I know they’re just things, and I don’t consider myself a materialistic person. But this singular luxury good, fashioned by the world’s top designers, carried the promise of matchless craftsmanship, exclusivity, and style. But that was before I broke up with my handbag. Well, almost.
My ah-ha! moment was in 2009 while I was writing an article for the U.K. magazine Ethical Corporation on luxury brands and their commitment to sustainability. During my research I spoke with a number of industry experts in the public and private sectors who revealed some dark, rather unflattering truths about the private world of high-fashion.
For example, as luxury brands have grown to meet consumer demands, many companies have shifted some if not all production to developing nations in order to reduce costs. Unfortunately, this has opened the doors to some ugly cases of human rights abuse, where workers receive exceedingly low pay, work unthinkable hours and are, on the whole, mistreated.
Moreover, in order for luxury brands to keep production in Europe and so retain their covetable “Made in Italy” or “Made in France” labels, some companies have resorted to working with clandestine factories in places like Prato, Italy, just outside of Florence, where illegal immigrants worked under terrible conditions.
One of the most revealing conversations I had was with Dana Thomas, former European editor of Condé Nast Portfolio and author of Deluxe: How Luxury Lost its Luster, who said there is a “big secret” in luxury fashion.
“They want consumers to think their products have all been made by Geppetto in his workshop in Florence," she said. "So they’re not going to talk about their workers in China, Romania, Turkey or North Africa, which would soil their image. And then as a consumer you would ask, ‘Why am I paying such a high price when someone is getting pennies to make it? What’s the luxury in that?’” It was in that moment that I began to reconsider my practically unwavering admiration for the luxury handbag.
But what was true just several years ago of designer brands is not all true today. We’ve seen an impressive increase in high-end brands’ commitment to sustainability, reflected in growing CSR budgets, improved supply chain management, mounting support for environmental and social causes, and robust reporting mechanisms.
Take a look at luxury label Burberry, which developed its ethical trading policy in 2002 and was bold enough to make it public, somewhat of an anomaly in this guarded industry. Burberry’s core set of labor and environmental standards are founded on internationally defined human rights standards and aligned with the guidelines of the Ethical Trading Initiative (ETI).
French conglomerate PPR, owner of Gucci Group, which includes a bevy of luxury brands including Yves Saint Laurent, Bottega Veneta, Gucci, and Alexander McQueen, established its ethical charter a whopping 10 years ago to foster transparency and accountability throughout company operations. And this is just a smattering of changes being made in the industry.
What really seems to be the challenge now, however, is not that luxury brands are oblivious to sustainability or are failing to embed social and environmental policies into their operations. Rather, the challenge today is their desire – or lack thereof – to talk about it. As Dana Thomas so aptly stated: “It’s not seen as terribly elegant or chic to be worrying about how to dispose of your trash or talk about human rights.”
According to the 2010 Corporate Social Responsibility Perceptions Survey only 11 percent of respondents had heard of any companies’ CSR communications. I know a handful of people who work in supply chain management for luxury brands, and they’ve told me quite plainly that it’s simply expected as proper business practice to monitor and be accountable for their supply chain practices, and to immediately correct any cases of wrongdoing.
Transparency is feared, however, because it could not only lead to public scrutiny, but could potentially demystify the allure of what makes something luxurious in the first place. Who really wants to see the person working behind the curtain in Oz?
Add to that the uneasiness luxury brands feel about disclosing supplier performance for fear of revealing their precious sources to competitors, and you begin to see a more intricate picture.
But the truth is that consumers are increasingly expecting companies to be forthright and honest. In an April 2011 g-Think survey, 45.2 percent of Awakening Consumers said their loyalty to a brand is at least somewhat affected by a company's social and environmental efforts, and 31.2 percent said it is regularly affected. And according to a 2010 Do Well Do Good Public Opinion Survey, 88 percent of consumers think companies should achieve their business goals while improving society and the environment.
As consumers become increasingly familiar with the language of sustainability and are actively searching for information about their favorite brands, they are re-evaluating their brand loyalty based on companies’ shared commitment to their values, and are subsequently putting their money where their values are. This is all the more true in the wake of the recession, and is no less applicable to Gap as it is to Gucci. I know if I am investing several thousand dollars in a luxury handbag, I expect it to be sourced ethically and produced in a way that respects the rights of the workers whose craftsmanship was required to make it. If not, I’ll use my precious dollars elsewhere--like on several months' rent.
Awakening Consumers don’t expect perfection, but they do expect honesty.
High-end companies need to learn how to craft their brand messaging in a way that retains a sense of allure while still offering clear, compelling and transparent information about their sustainability efforts. In so doing, they will secure the most precious of things: consumer loyalty.