The luxury market is doing something that it has never done before – developing a conscience. And young, deep-pocketed buyers around the world are forcing this change.
Luxury, be it travel or retail, has always been associated with excessive consumerism, disposable income and guilty pleasures (but for a few exceptions). Yet, as millennials and generation Z consumers are driving 85 per cent of global luxury sales growth, they expect luxury brands to be aligned with their values.
A recent report from Nielsen showed that 73 per cent of millennial respondents were willing to spend more on a product if it came from a sustainable or socially conscious brand. That’s more than what older generations indicated. Furthermore, 81 per cent of millennials expect the brands that they buy into to be transparent in their marketing and actively talk about their sustainability impact.
This is the age of philanthropic luxury and travel brands cannot ignore this trend.
Ahead of ILTM Cannes 2019, the focus of which is conscious luxury, Alison Gilmore, ILTM portfolio director, comments: “Today, a powerful and influential group of ultra-high-net-worth and high-net-worth consumers are preferring to view travel as a gateway to experiences including philanthropy, conservation, wellness, cultural and intellectual pursuits, sport and more. With travel as the means but not an end in itself, travel categories are converging, and travel brands find themselves at the centre of a vast new, eco-system. So, how do we respond? What do we need to know to navigate through this transformation?”
Luxury brands are usually built on aura and mystique, but young customers are demanding to clear away the cobwebs and know more – they want to know how brands are making a positive change in their ecosystems. They want to know that raw materials are being sourced in an ethical way, the labour is not being abused, lesser privileged communities are benefitting from their purchase and, of course, nature is not exploited.
The environment has been important in purchase decisions for a while, which is why hotels are going plastic free, turning towards renewable sources of energy, minimising waste and going green (if only to maximise the bottom line, in some cases). Destinations in the Indian Ocean are wondering how to dispose off huge piles of garbage. Airlines are announcing aircraft that are noise-pollution and emission free.
Now this eco-consciousness has to be taken to a whole new different level, to include social consciousness as well, and the buyers are demanding authenticity.
These days it is likely not enough for a hotel to share a portion of its profits with the local orphanage or for an airline to build a school in an impoverished country. The hotel and airline should make microsites and promote these positive messages, without being too pushy and while remaining authentic, as the new generation of luxury spenders is making their decisions based on these activities.
However, it begs the question: does luxury have a conscience? Of course, it does. Otherwise the world’s biggest charities would not exist.
However, how conscious is luxury? And where does this consciousness end? Is it aware of its excesses? And if it is, is conscious luxury merely a channel to brush off one’s guilt? And do luxury spenders themselves practice the social consciousness they expect out of their favourite brands?
* Your turn. rashi@tradearabia.ae