The Luxury Industry and Society

...over time.

Learn more about how brand heritage and culture respectfully evolve over time, about the definition
of sustainability, and the growing engagement of the luxury industry towards it.

Past, Present and Future: The Luxury Formula

Serge Carreira from Sciences Po Paris explains the paradox of luxury: it has to be
of our time and timeless at the same time.

What makes a luxury brand relevant over time?

In this video, Serge Carreira, Lecturer in the Program of the Master “New Luxury and Art de Vivre”
at Sciences Po Paris, focuses on one of luxury's most singular dimensions: Time. He uncovers how
luxury can evolve with society to ensure its values are lasting.

Past, Present, Future: the Luxury Formula

I’m Serge Carreira, lecturer in the program of the Master New Luxury and Art de Vivre of Sciences
Po in Paris.
Luxury is a magic word. Everyone has a view on what luxury is or not. Some will describe it as a
feeling. Others will consider an object or an experiment. It will be too restrictive to define luxury as
only what is not needed. As a matter of fact, it is a cultural expression beyond immediate needs.
Luxury is defined through a combination of various elements: the quality, the identity, the use, the
price, the desire, the scarcity…
We will focus on one of its most singular dimensiosn: Time. The fact is that the idea of luxury
combines individual and social representation. It generates a temporal mutability of luxury. Luxury
is a quest for perfection, an appreciation of knowhow and culture, and aesthetic vision. If luxury
evolves with society, its values are lasting. There is a kind of paradox in this: it has to be of our
times and timeless at the same time.

Luxury & the Past

“There is no past we can bring back by longing for it, there is only an eternal now that builds and
creates out of the past something new and better”, says Goethe. Luxury is rooted in the past, but it
should not be nostalgia. Past means “heritage”. A luxury product has an history. The vocabulary of
luxury includes Crafts, Myths, Icons and Excellence. However, if luxury doesn’t evolve, it could
become dusty and “old”.

Luxury Brands in the Present

What makes the brand relevant? How does it resonate nowadays? “Beauty in things exists merely in
the mind which contemplates them”, states David Hume. The eye changes. And then luxury
changes. Luxury expresses a desire to beautify life. It could be considered as the pursuit of an
absolute beauty. It is something “extra ordinary”, which means something not common. It has a
dreamy touch. Aesthetic is a major element to turn luxury attractive. However, luxury is a business
of offer, not a business of demand. That is why it could be sometimes pushing the boundaries.
Despite its strong roots in the past, luxury is a game changer. In order to be in a constant attraction
relationship, it has to reflect today’s customers’ expectations: authenticity, transparency,
sustainability and inclusivity. These values are at the core of the luxury concept. “Laasting” is one
of the characteristics of luxury. It juxtaposes the different temporal dimensions.

The Future of Luxury

It doesn’t mean luxury as to be futuristic. Nevertheless, what makes it so special is the fact that it
remains always relevant despite trends. The Craft, the Myth, and he Design make a luxury product
durable. It brings also a personal emotion. As it is a meaningful object, a bag, a ring, a scarf or a
watch can be transmitted from one generation to another one. Moreover, by essence, luxury
embodies bold and perennial values:
- Quality Beyond Aesthetic
- Legacy Beyond Desire
- Emotion Beyond Ownership
- Creativiry Beyond Trends

Brands and Society

Brand values are strongly linked to society and consumers.

What emotions and societal values are strongly associated with brands, and in line with society's
aspirations?

Research has shown that consumers rely on luxury consumption to communicate certain values, and
thus reward companies that truly reflect those values.
Follow Anne Michaut, Associate Dean for Education Track and Pedagogy and the Director of the
LVMH Academic Chair at HEC Paris, as she uncovers the role of brands in society related to
their opportunities to express functional, experiential and symbolic values.

Brand and Values

Consumer choices are driven by the value created by brands and perceived by customers. Past
research has shown that there are three distinct types of value created, also driving consumption
motivations:
1. Functional
2. Experiential
3. Social or Symbolic interaction
I am now going to briefly define these three dimensions, central to this topic of this video: the role
of brands in society related to their opportunities to express strong values. So first, the functional
value of a good, service or experience offered by your brand is based on the perceived utilitarian or
physical performance.
In luxury consumption, it is about consuming superior products. It encompasses diverse elements
such as craftsmanship, materials, design and creation, unique performance, extraordinary product
capabilities, etc… It is traditionally presumed to be the primary driver of consumer choices. But not
only.
So second, the emotional value – that is to say the capacity to arouse feelings also is essential. In
luxury, it is about the ability of brands to create effective responses all the way to strong emotions
of joy and pride, and to identify and nurture these emotions. It refers to a search for pleasure and
hedonism beyond what the product is. It is about what the product represents.
Research has shown that consumers constantly make trade-offs between functional and emotional
value they derive from their consumption, and that the emotional value is a strong driver of
customer delight, while the functional value is a driver of mere satisfaction.
Third, the social value represents a perceived value acquired from the associations with one or more
specific social groups, such as demographic, socioeconomic, or cultural groups. In luxuy
consumption, it is also traditionally referring to the affirmation of a social status, yet building on the
momentum of young generations, customers increasingly want more depth. And purpose has
become an essential consumption driver that they expect brands to express. They want brands to
stand for their values and showcase authenticity and integrity. To reinforce and bring a rational
behind these expectations, research has shown that consumption is associated with the extended
self. A comprehensive recent approach shows that consumers use brands to acquire, create,
preserve, and reinforce their identities. They increasingly realize that how they spend their money is
a form of power to communicate their values and reward companies that truly reflect them. Two
concepts are essential to conceptualize, analyze and measure this symbolic consumption.
1. The meaning of products in society, related to a facet of materialism. The materialism
approach focuses on the extrinsic meaning of possessions and explains how possessions
reflect the characteristics of the owner inside a society. Consumers perceive the meaning of
the products based on other people’s opinion. Recent findings showed the same effect in the
case of experiences.
2. The consumer’s identity. In other words, self-congruity. In the self-congruity approach – that
is to say, the matching of the product’s image with consumer’s self-concept – the act of
consumption is motivated by the congruency between the individual’s image and the
offering. Hence, consumers assess the capacity of one brand to communicate aspects related
to their own identity.

How can brands express their values to consumers?

The key issues at stake here are the emotional and social values that brands manage to provide to
their customers. And the key questions to address from a brand perspective are:
- What are the emotions and social values that are strongly related to the brand and coherent with
society’s aspirations?
- How can brands better express desirable social values?
First, building on the materialism approach and the extrinsic meaning of possessions, brands can
develop offerings, products or experiences that promote and express their values, while delivering
higher perceived values to their customers.
Second, brands can also activate their emotional and social values by focusing on self-congruity.
Brands may express their intrinsic values in a way that would help consumers communicate
desirable aspects related to their own identity and in turn allow for more positive feelings related to
consumption of meaningful offerings. In a society where findings confirm that there has been a
slight but visible shift from the consumerism orientation towards a more conscious spending
attitude, where consumers indicate a preference for brands that express strong values and
statements, this is likely to ignite a virtuous cycle. Consumers valuing self-expression or caring
about other people’s opinion will feel more at ease consuming such brands, and this will also
positively reflect on them. As a consequence, the emotional and social value delivered by the
product or experience will be enhanced. Increasingly, consumers do not focus on conveying status,
but on projecting values either to express themselves orto foster greater acceptance. Clients will
increasingly be looking for brands that facilitate this and nourish them all the way to projecting
desirable values that will boost their personal image and acceptance by society.
In turn, brands will also increase their own acceptance in society.
To conclude, this video shows that:
 1. Consumers have a range of consumption motivations, making differential contributions to
their final choices.
2. Consumers express their own values through their brand selection and that brands become
powerful personal branding tools as they project clear and strong values.
3. Brands have the power to foster desirable values in society through this mechanism and
express their own values to deliver higher perceived value to their customers.

Companies' growing engagement towards

sustainability
How to define sustainability? How companies and individuals may consider their
engagement and commitment to improving society?

In this video, Anne Michaut, Associate Dean for Education Track and Pedagogy and the Director of
the LVMH Academic Chair at HEC Paris, shares her definition of sustainability, and uncovers
how businesses not only focus on minimising their negative impact, but also seek to effect a
positive one.

The Growing Interest towards sustainability

The concept of sustainability has witnessed a growing interest in society in the last decades.

What is Sustainability?
In proper definitions, sustainability and sustainable development were seen as: “the ability to meet
the needs of the present without compromising the ability of future generations to meet their own
needs”. This definition, focusing on the notion of persistence over generations, is the most
frequently cited definition of the concept to date. Another commonly used definition is based on the
so-called three pillars of sustainability. That is to say, maximizing simultaneously the biological
system goals, economic system goals and the social system goals. As the world was witnessing the
negative effects of climate change, water scarcity, species extinctions, etc., while acknowledging the
potential role of brands in activity, championing better policies, transforming business models and
influencing consumer behavior, many companies deeply revisited their activities.

A more holistic vision of sustainability initiatives

For a long time, much of sustainability has been about limiting damage, but today that has changed.
Throughout the supply chain, businesses not only chase their negative impact, but also seek to
enhance a positive one. This is about leaving “crisis” mode and recognizing an opportunity to infuse
a net positive mindset. First, it is about seeking for upside benefits: the “gold” that smart companies
mine from being sustainable includes higher revenues, lower operational costs and reduced risk.
Second, managing the downside with efforts to cut waste and reduce resources used, can save
money that drops to the bottom line. Third, in a value-based concern: doing the right things attract
the best people, enhances brand value and builds trust with customers ad other stakeholders. Also,
the direct link with operations remains essential and critical. We may question whether limiting
companies’ options to this approach does not trigger a narrow view of the issues at stake, to the
point of neglecting a more holistic vision of the role of companies in sustainability of society rather
than the sole business they operate in. First, we may argue that there is a moral obligation for
companies to engage in sustainability of society as a whole. That is to say: companies have a moral
dury to be sustainable. Second, and going one step further, one may argue that every company
needs tacit or explicit permission from governments, communities and numerous other stakeholders
to do business. In other words, acting sustainably provides companies with a license to operate.
Third, there is a reputational dimension to sustainability: to improve a company’s image, strengthen
its brand and enliven morale, and even raise the value of its stock. If we consider sustainability from
these angles, companies and individuals may consider their engagement and commitment to
improving society as a whole through actions potentially more disconnected to their core business,
but meaningful in the bigger picture. As such, they should start from the perspective of the needs of
society rather than from their own activities. In this vision, companies engage in actions, not only
coherent with their business, but also related to it. To take an example of this, a company producing
honey-based products could act in favor of the protection of the bees, including nature protection
and education of citizens. In this mindset shift towards engagement, companies may want to revisit
their role and manage not only their consumers’ expectations, but also society’s expectations, to be
accepted beyond their customers by non-customers as well. It is not about focusing on the tension
between business and society, but rather about focusing on their interdependence in the broad sense.

What about communicating around these intiatives?

One essential issue with sustainability communication is to carefully consider the potential
differences between customers’ expressed requirements and their implicit expectations regarding
sustainability. In other words, what consumers voice, that is to say, expressed requirements, does
not fully encompass all their implicit expectations. First, implicit expectations about the role of the
brands can be broader than value delivered to their customers and encompasses a value delivered to
society as a whole. What should be your impact as a company to earn the right to operate? Second,
their implicit expectations might at times exceed the actual brand performance on sustainability.
Communication should therefore carefully consider consumers’ unvoiced expectations with respect
to sustainability performance and compare them with the reality of their performance. Any gap is
likely to create irritation and frustration from a consumer and society perspective.
To conclude, this video shows that:
1. The resposnability of companies towards sustainability may be envisioned with a broader
scope;
2. Brands should enforce a more holistic vision of sustainability initiatives;
3. Brands should consider customers’ implicit expectations.

LVMH: 30 years of sustainable commitments

Taking action to make a difference.

LVMH takes action.

Every action taken by the Group and its employees reflects our commitment to ethics, corporate
social responsibility and respect for the environment. Our commitments drive our Maisons’
performance and ensure their longevity.

Firmly convinced that truly desirable products can only come from sustainable businesses, we are
committed to ensuring that our products and the way they are made have a positive impact on our
entire ecosystem and the places and communities where we operate, and that our Group is actively
working to build a better future for our planet.
“The LVMH Group embodies a unique culture, one that we express around the world through our
products, as well as our ethical, social, environmental and cultural actions, with each aspect
contributing to a truly living legacy.” - Bernard Arnault, Chairman and CEO of LVMH

In the light of the 30-year mark for LVMH in honouring these commitments, let's look back on the
evolution and progression of this path and dedicated strategy over the years.

At LVMH, we have three action programmes:

- the 2025 CSR roadmap, about social responsibility,
- LIFE 360, the group roadmap for environmental responsibility, and
- a sponsorship program for Art and Culture.
 The Environmental Commitments of LVMH
LVMH sees environmental protection as more than a responsibility: It is an
imperative!

LVMH environmental policy has been a pillar of our growth strategy for more than 30 years.
LVMH was the first Group among CAC 40 companies (Paris stock market index) to create and
develop an environmental department in 1992.
Since becoming one of the first major corporations to implement an environmental strategy, we
have persistently intensified our efforts to reduce the impact of our business.

LIFE 360
The LVMH approach to environmental responsibility is structured by the LIFE 360 program.
The program has structured the Group’s actions around a unified vision, a collective commitment
and priorities shared by the Maisons, with a long-term perspective.

In the following video, Hélène Valade, the Group's Environment Development Director deep dives
into the LVMH Environmental LIFE 360 program and its four pillars: Creative Circularity,
Biodiversity, Climate, and Traceability & Transparency.