Sustainability

SEcon 2012 at W&M

In my last post, I mentioned a conference coming up in April, 2012. Well there’s one that’s just came to an end at the Mason School of Business at The College of William and Mary. The inaugural session of SEcon (Social Entrepreneurship Conference) has just concluded. What an amazing two-day experience being among leaders, innovators, and change agents with a passion for doing great good for business and society.

The conference hosted participants from across the globe, including:

  • Sheikh Hamad Bin Ali Bin Jassim Al-Thani – Vice-Chairman of the Qatar National Food Security Program.
  • John Bridgeland – President & CEO of Civic Enterprises
  • Jonathan Greenblatt – Special Assistant to the President and Director of the Office of Social Innovation and Civic Participation at the Domestic Policy Council
  • Stanley S. Litow – IBM’s Vice President of Corporate Citizenship & Corporate Affairs and President of IBM’s Foundation
  • Mike Perlis – President and Chief Executive Officer of Forbes Media LLC
  • Ali Siddiqui – Principal shareholder of JS Group and board member of the Acumen Fund, a social enterprise fund
  • Wayne Silby – Founding Chair of Calvert Funds

There’s a complete list of participants here.

Social entrepreneurship is not a new idea that requires considerable thought or effort to understand. It occurs and develops in many different ways – with individuals, communities, companies, and even nations. After attending all the breakout sessions and listening to the various speakers, I think there’s a lot of opportunity for luxury brands that want to be more relevant to consumers.

The SEcon 2012 conference website will be up for a long time to come. I suggest you access the trove of videos and information generated by the event. I’m going to study all of the material to find those nuggets of wisdom that will help me in my luxe-focused career.

A New Lens on Sustainability: The Triple Bottom Line in the Luxury Sector

By Renee delCastillo, MBA 2013 @ The College of William and Mary

The business world is not just about reaching potential, it is about redesigning it. In modern business environments, success is no longer measured in the bottom line of the income statement, but a triple bottom line: people, planet and profit.  While the luxury sector is more immune to small economic downturns, the prolonged effects of recent global financial crisis have made all consumers (including buyers of luxury goods and services) more cautious of the social and environmental impacts of their purchasing decisions.

Continue reading →

Luxonomics

Today’s post focuses on luxonomics (luxury economics). Since luxury goods embrace the concept of rarity, it would be an obvious deduction to assume that the more scarce a luxury product or service becomes, the more demand it enjoys. Consequently, prices can appreciate – to levels that can be absorbed by few.

Some of the factors affecting supply include:

  • Input Prices
  • Technology or Government Regulations
  • Number of Firms
  • Substitutes in Production
  • Taxes
  • Producer Expectations

Today I want to show you some “scarce” luxury products, whose supply has largely been affected  by government regulations. As the cited MSN Money slideshow states, all the products listed are affected by legal restrictions limiting their production, distribution, and sale in parts of the world. Much of the reasoning behind these bans is aimed at protecting the environment. Continue reading →

Diamonds are Getting Pricey

30-day Challenge – Day 21

If you are an affluent consumer earning more than $100,000 in annual income, then the recent report by Bain & Company on diamond prices should worry you. If you make upwards of $250,000 a year, then you shouldn’t be as perturbed because you will not be greatly affected by the forecasted jump in diamond prices.

The global consulting firm has put out a report estimating that diamond demand will  grow at a 6% CAGR over the next decade. The company believes that as we approach 2020, diamond supply will not be able to keep up with demand due in part to the growing economies of China and India. Those markets alone are estimated to push diamond demand at a CAGR of 6.6% in diamond volume alone. While demand is estimated to grow, diamond supplies are only expected to grow by 3% (CAGR) in volume. Continue reading →

Keeping to Your Mission with Counterintuitive Marketing Approaches

30-day Challenge – Day 20

A while back, our business school, the Mason School of Business, was visited by Tetsuya O’ Hara, the Director of Advanced R&D. It was a momentous visit especially for students  who had never heard of this manufacturer of outdoor gear and apparel.

One thing Tetsuya told us about the company, was in regards to the new marketing campaign it was executing. Basically, Patagonia was asking its customers not to buy its products – for environmental reasons. As a professional in the luxury market, this certainly looks like a great way to market your product. However, there is some sincerity behind the company’s plea.

You should check out the ad here. Also look at the company’s blog post, explaining their rationale for the ad in more detail. Check out the comments as well.

Sustainability – The New Dimension of Luxury

30-day Challenge – Day 11

Over the course of writing this blog, I have learned a lot by covering the evolving themes in the business landscape occupied by premium brands.

For any of my readers interested in working in the luxe space, these themes are what I believe will dictate and most possibly define their success. I have talked about luxe-related issues ranging from social media to responsible business. Today I want to talk about sustainability. If you have already got a dose of this in my earlier posts, then I am re-emphasizing it in light of recent news articles highlighting how some brands are introducing sustainability in their corporate strategies.

Who would have ever known that acclaimed jeweler, Tiffany, would build a dedicated web page to highlight its efforts in corporate social responsibility (CSR); or that the renowned Peninsula Hotels would make a bold (and maybe costly) decision to stop serving shark fin in its restaurants?

Well, its happening all around us today. Whether or not you believe in the sincerity of these varying corporate initiatives, sustainability is no longer a matter of lip-service. Brands are actually paying attention to many of the concerns of consumers. In his opinion piece on luxurysociety.com, Leslie Pascaud, Director of Added Value Paris, discusses why luxury brands should and will embrace sustainability in the near future. See the article here.

Luxury Hospitality Giant Shows Love

30-day Challenge – Day 7

     

Today, I am both glad and proud to write about a company, with which I have done business: both as a pre-MBA professional and as a consumer. I have to say that I wasn’t surprised when I came across this article announcing Hilton Worldwide’s initiative to give people around the world better access to the hygiene that can help prevent fatal illnesses such as diarrheal diseases and pneumonia.

In partnership with the Global Soap Project, Hilton Worldwide is leading the charge to help develop a cost-free way for hotels around the world to recycle left-over bars of soap, which are provided to guests during their stays. In the first year of this partnership, Hilton Worldwide expects this investment to result in the donation of more than one million new 4-ounce bars of soap to people in need. Learn how it works here. Continue reading →

Luxury Out of Africa: Edun

30-day Challenge – Day 6

Today, I found another brand that cares about its social and environmental impacts. It’s also not surprising that this brand is associated with the LVMH family of brands (more than 65). One reason I admire LVMH is that it is a company that is comfortable with being the leader in just about every luxury segment. And now, Bernard Arnault is pushing his massive company past another frontier with Edun. Continue reading →

Should Luxury Brands Care?

30-Day Challenge – Day 4

Yesterday, I watched a documentary describing the tumultuous experience of workers in the garment manufacturing industry, as they campaigned for better wages and working conditions. Titled Made in LA, the documentary follows “three Latina immigrants working in Los Angeles garment sweatshops as they embark on a three-year odyssey to win basic labor protections from a trendy clothing retailer” (http://www.madeinla.com). 

While putting aside my political and economic views on the subject of immigration, my mind focused on the theme of responsible business – that is doing business the right way and ensuring that all who partake in commercial activities receive benefits (economic and otherwise) that are in line with their inputs. As this concept continued to stir in my head, I had a moment of pure enlightenment. Rather, it was an unanswered question: do brands (luxury brands in particular) care about the things I care about, specifically responsible business?

As the son of a diplomat, I’ve grown up an advocate of all things fine, unique and exclusive. If you think, I grew up with a silver spoon, then think again. My taste and refinement came as a result of the people and cultures, to which I was exposed. I was raised to understand that anything considered unique, exclusive, rare, and pleasurable had a right to be deemed luxurious. More importantly, I learned about the relativity of luxury – what might be luxury for me may be a staple for you. In third world countries, where ample food and water are especially rare and exclusive to the rich, wouldn’t they be considered luxury items.

So you might ask how does this all relate to a blog about an industry focused on goods that some will say are inaccessible to much of the world’s population? At this point I don’t know, but I intend to find out a little more in the coming posts.

Transforming Social Media to the “Bottom Line”

30-Day Challenge – Day 3

Yesterday, I highlighted one obvious problem brands face when employing social media in their marketing strategies. Today, I’m continuing that post with some focus on possible solutions.

Going Where Your Customers Go

Brands need to understand is that social media can influence the decisions of its consumers, especially in the longer term. Luxury companies should be more interested in it because it allows them to communicate with current and future customers. Rather than developing accounts on all the available platforms, companies can start by figuring out which social media tools are being used by their consumers. This reminds me of Mark Bonchek’s (SVP of Communities & Networks, Sears Holding Company) advice on sociographics.

The fact that social media exposes your brand to an exponential amount of customers (for whom you may not be able to count on for a future purchase) forces luxury brands to see it as a threat. Conventional perspective in the luxe space portends that social media could cheapen brands by exposing them to customers that don’t fit their target psychographics. However, if it is done right, social media can give your brand a connection to the next generation of consumers. It would help to mention Coca Cola and Pepsi at this point because both are such iconic consumer brands. These companies have done well in mining their own business intelligence to determine one of the critical times when beverage consumers are most likely to develop their taste preferences – in their college days. As such, Coke and Pepsi spend a lot of money, competing for the exclusive rights to sell their products on college campuses across the US (and obviously the globe).

In the same vane, social media has an influencing capability where users-turned-brand-advocates (evangelists), can help create brand desire within their networks. There is great opportunity for brands who start to view social media more as a long-term brand builder rather than a click-thru conversion enabler. In his article, Rony Zeidan (of RO New York Inc) says:

Advertising has been traditionally about making products desirable, about infiltrating the minds of people to create needs and fuel desire from one particular source. It communicates with consumers, promotes products, creates brand identity, and generates brand awareness.

Social media is the new tool of advertising, and it could be a better marketing tool than the interruptive conventions advertisers have used. I used the term interruptive because traditional advertisements (TV, billboards, and print) have formats that require your focused attention (away from the show or article you really wanted to watch or read) on what the brand is trying to tell you. Today, social media has the power of creating conversations that are user generated, allowing brands to be part of a more intimate and voluntary relationship with consumers. They may not have control over what people are saying, but brands surely have a more proactive capability to know and affect what the market really thinks about their products.

Social media has the potential to introduce brands – whether they are considered household names or deemed obscure –  to markets that were never accessible. It takes word-of-mouth marketing (the best ever for luxury products) a step further by amplifying the brand message. The only thing that that firms have to actively ensure, is that they are using the right social media tools to reach their target markets. To do that they need to go where the customers go.

I enjoy writing about these topics. Blogging is both cathartic and enlightening at the same time. Let me know if you’ve gained something from my perspective.

Connecting the Dots – Social Media and Luxury Brands

30-Day Challenge – Day 2

On my way to school this morning, I had a conversation with one of my classmates about the thin line bloggers and social media publishers straddle between overuse and underutilization of the social media apparatus. Since starting this blog, my objective has developed from just gaining exposure to the luxury goods and services segments, to making connections with people that have similar interests. I’m not worried about how many followers I have (make no mistake I am thankful for my handful); how many facebook “likes” I get; or how many people choose to comment on my posts. I am more interested in the discovery of other publishers, consumers, and readers who have an iota of perspective on the topics I discuss. Continue reading →

BMW’s Car of The Future: Glued, Screwed & Rented – Forbes

BMW’s Car of The Future: Glued, Screwed & Rented – Forbes.

Take a look at the article above highlighting BMW’s attempt to answer consumer demands of the future. Would you like to drive these cars?

BMW i8

BMW i8

BMW i3

BMW i3

“Patagonia @ W&M” was a Huge Success

You should have been there to hear Tetsuya O’ Hara speak about what Patagonia is doing to develop a sustainable competitive advantage. We will have pictures and videos out soon to show you all the exciting things that were discussed.

If you attended the event, please let us know what you thought in the comments section below.

2011 HBS Luxury and Retail Conference: Social Enteprise Panel


Edmund Amoye and Tetsuya O' Hara (Patagonia)

I attended the Social Enterprise panel at the HBS conference. The highlight of the panel for me was the opportunity to delve deeper into a case I had just completed at Mason. The panel was made up of very unique individuals from niche businesses. Continue reading →