Keywords

1 Introduction

The luxury fashion market is growing mainly in the Asia-Pacific region (Deloitte 2014). For instance, China is the world’s fifth largest luxury market , but Western Europe is still in the top ten largest luxury markets in the world: Italy (3rd), France (4th), United Kingdom (6th), Germany (7th), and Spain (9th) (Deloitte 2014).

Luxury brands have a wide product offer: fashion clothing and accessories, beauty luxury brands, automobiles, wines, jewellery, tourism, hotels, private banking, among others (Chevalier and Mazzalovo 2008). This research is specifically focused on fashion luxury brands. The fashion luxury industry and luxury brands can be perceived as a mix between the attributes of the product, as well as some extra psychological factors, which are perceived as benefits by the consumer (like added value, esteem and prestige). All these attributes allow a certain group of people to feel they belong to a selective or exclusive society group, who is able to buy these expensive goods (Mansharamani and Khanna 2013). When it comes to luxury brands or luxury products, the price will often be decided by aspects such as their uniqueness, time spent in their production, their exclusivity, among others (Kapferer and Bastien 2009a).

As McPherson (2014) noted in the Forbes’ website, not all fashion brands are dealing well with stylish and sustainable issues. In the same website, Diana Verde Nieto, Founder of Positive Luxury, stressed that while a majority of consumers will pay more for “higher quality” clothes , only 26 % of shoppers would spend more on clothes labeled as “sustainable” or “environmentally friendly” and even Millennial consumers (another expression used to specify people born between 1978 and 2000) who favor purpose-driven organizations —“sustainability” can be a counterproductive term. Furthermore, Kapferer and Michaut-Denizeau (2014) found that luxury buyers have ambivalent attitudes towards the cause of sustainable development, such that they consider luxury and sustainability somewhat contradictory, especially with regard to the social and economic harmony facet of sustainable development. In this vein, more research is needed for going further in understanding consumer perceptions, particularly the Generation Y’s, who is entering in the luxury fashion market.

Therefore, this chapter aims at providing insights about how Generation Y in Europe views and perceives CSR practices in fashion luxury brands and the importance given to each dimension. The remainder of this chapter is organized as follows: first, the theoretical aspects concerning fashion luxury brands, CSR dimensions and Generation Y overall profile; secondly, the description of the research method and the report of findings are presented; and finally, the conclusions and the implications are exposed.

2 Theoretical Background

2.1 Luxury Fashion Brands

Luxury is associated with “sumptuousness, ostentation, extravagance, superfluity, frivolity, appearance and material power, or then again with indulgence, easy living and opulence” (Loureiro and de Araújo 2014, p. 394). Luxury is “a culture, which means you have to understand it to be able to practice it with flair and spontaneity” (Kapferer and Bastien 2009b, p. 313).

According to Mansharamani and Khanna (2013), a luxury brand is a mix between the attributes of the product with some extra added psychological factors, which are perceived as benefits by the consumer as it happens with added value, esteem and prestige. The sense of high status or the sense of belonging to a selective or exclusive society group, who is able to afford these expensive goods is another factor related to luxury brands . Jackson (2004, p. 158) summarizes the concept of luxury brands as “exclusivity, premium prices, image and status which combine to make them more desirable for reasons other than function”.

Economists usually make a distinction by comparing the product price with its functional benefits (Kapferer 2010a, b) under three categories. The first one is related to fashion brands that move masses (e.g., Zara or H&M-Hennes & Mauritz AB). The second category is related to premium brands. Although directed to the mass market, these brands aspire to be luxury or prestige brands (e.g., Polo, Ralph Lauren or Tommy Hilfiger). The last category is related with luxury brands (e.g., Cartier, Gucci or Channel). They represent the highest levels of craftsmanship and the loyalty of unconditional customers which is not affected by seasonal trends (Kapferer and Bastien 2009a).

2.2 Corporate Social Responsibility

According to Kozlowski et al. (2012, p. 20), CSR can be defined as “A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”. This means that companies should try to implement a process that integrates social, environmental, ethical human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders (European Commission 2011).

To the International Organization for Standardization (ISO 26000), founded in 1947, Social Responsibility should ensure that the products sold by a company are safe, reliable and are of good quality product (ISO 26000 2013a). In this process, people must be in the beginning, the core and in the end of Social Responsibility approaches, meaning that any organization must create better persons, superior companies and, therefore, a better world (ISO 26000 2011). These standardizations help companies to be more efficient and effective in their business.

The definition of ISO 26000 refers to environment, society and also the stakeholders such as the European Commission definition. But in this concept there are some other relevant ideas that should be added to clarify the meaning of Social Responsibility. Some of these topics include: transparency, international norms and behaviors, sustainable development, health and societies’ welfare (ISO 26000 2013b).

If companies decide to implement these practices, they may achieve several benefits: (i) more competitive advantages; (ii) better brand reputation in society; (iii) more ability to attract and retain stakeholders, customers, as well as investors, donors, sponsors and the financial community; (iv) keep the employees committed to their job; (v) keep good relationships with companies, governments, media, suppliers, peers, customers and the community in which they operate (ISO 26000 2010).

ISO 26000 has proposed seven core practices for the correct implementation of CSR which are: (i) organizational or corporate governance; (ii) consumer issues; (iii) fair operating practices; (iv) environment protection; (v) labor practices; (vi) human rights, and (vii) community involvement and development (Romero 2010).

Another important concern is the relationship between Social Responsibility and the financial performance of the organizations. In a previous research presented by Loureiro et al. (2012), they concluded that the positive impact is mainly demonstrated when the cost goes down and when the productivity increases in the organizations. However, customer satisfaction, at the moment of deciding between a product that is responsible for the society or one which is not, is another positive factor for the financial situation of the company (Loureiro et al. 2012). Finally, consumer satisfaction increases the perceived value, meaning the client’s perception about quality, price and benefits of a product compared to competitors (Loureiro et al. 2012).

Recently, some important fashion brands felt the importance of performing some philanthropic activities in order to relieve the damages they may have caused to the environment or society. Unfortunately, in most cases this philanthropic situation does not last long and therefore does not generate a significant change (Knop 2013). Instead of philanthropic activities, Roberts (2011) considers CSR as a potential tool for fashion luxury brands to become more concerned with sustainability, society and environmental issues.

According to Bendell and Kleanthous (2013), as luxury fashion brands have become more accessible, the idea of exclusivity is harder to achieve. Thus, it is necessary to give consumers an added value in order to find this exclusivity feeling through the use of exceptional environmental and social performance which should be understood as part of the brand value. This will also offer the consumer the feeling that the brand is aware of some sustainable practices, giving back to all their stakeholders, especially their clients, a feeling of belonging and loyalty of the brand. Luxury brands may suffer from the gap between rich and poor countries (Waller and Hingorani 2013). Generating well-being is the goal that every luxury fashion brand should aspire for societies. Some of these companies see this approach as a way of retribution to them (Bendell and Kleanthous 2013).

Luxury fashion brands are high influencers about their consumers’ behavior and needs, and in that way they have the flexibility to make clients change their choices about design, distribution and duration of the product. As this is an opportunity for brands, they also have the responsibility to balance this, and promote a sustainable consumption among their clients (Bendell and Kleanthous 2013).

Nevertheless, fashion luxury brands have been criticized because of being extravagant, overpriced, wasteful and also because they explore workers and suppliers, especially from third world countries (Waller and Hingorani 2013). Moore (2011) found that some luxury fashion brands use sweatshops or maquila to pay less for the labor, while producing and earning more. The ethical cost of doing this has been very high to developing countries which are the ones that are doing the hard work. Several luxury fashion companies have their production settled in low income or developing countries because labor is cheaper and they can pay minimum salaries, while the CEO and managers are being paid big salaries. Besides, most of the times some of these workers deal with unsafe and unsanitary conditions and have to work long hours. Some of the previous luxury fashion brands often evade taxes, which is not ethically correct and affects the economic performance of these countries (Moore 2011).

2.3 Overall Profile of Generation Y

Generation Y enjoys technology, entertainment and exciting things (Solomon 2014). These Generation Yers want experiential activities and they like to be challenged, to have fun and flexibility at the same time (Junginger 2008). Even so, they are able to sacrifice personal pleasure for the common good (Zemke et al. 2000), meaning that they are concerned about the world in which they live. According to McDermott (2013), this generation is prepared to fight against environmental problems and embrace social causes, since they grew up learning how to fight for a better world and being aware of some principles that are already being applied by them, like CSR.

Generation Y is brand conscious because it values consistent quality and not because they regard a particular brand as prestigious. Therefore, the Millennials enjoy going to favorite branded stores and using websites to search for information and sanctioned new products. They do not trust on the face of it, they are suspicious about unknown brands and are unlikely to experiment without being able to touch and examine new products (Lachman and Brett 2014). Solomon (2014) points out five generational characteristics: (i) they use digital devices that bundle communication, entertainment, shopping, mapping and education; (ii) they are a sociable generation and one who enjoys expressing such sociability online as well as offline, particularly in the many areas where online and offline activities and circles of friends overlap, but they also socialize with their parents; (iii) they are community-oriented and enjoy equal relationships and co-decision-making; (iv) they crave for the joy of adventures and discoveries and so, when shopping, they prefer an “experiential” retail environment, where shopping is more than a transaction and the pleasure of being in the store is not limited to the goods that customers take home; (v) they are also a high values-driven generation, particularly when it comes to civic values which lead them to feel accomplished, self-confident, group-oriented and optimistic.

As most of the Generation Yers is now becoming young adults or adults, some companies are being managed or influenced by them and consequently these companies are more interested in being socially responsible. These young dreamers are expected to create a new era of responsible growth that protects the planet and benefits everyone because they are non-conformists (McDermott 2013).

3 Methodology

An exploratory study (qualitative approach) was conducted to investigate the behavior and the motivations that moves that behavior (what, how and why) (Rafasampedro 2008) by individuals of the Generation Y towards CSR practices in fashion luxury brands and the importance given to each dimension. Thus, a direct technique was employed in order to provide the participants with enough spontaneity to ensure that they answer the questions without being influenced by the interviewer (Kvale 1996). The reason behind the use of qualitative approach lies in the intention to go deeper into the what, how and why Generation Y view CSR practices in fashion luxury brands and explore nuances related to this issue (Stebbins 2001).

Regarding the sample, some researchers suggest that sometimes one interview is enough, while others mention that a good option is to interview a population until saturation, which can be achieved when no new or relevant information emerges (Given and Saumure 2008; Baker and Edwards 2012). Following this last assumption, we conducted interviews (non-structured) using Skype for telephone contact and achieved saturation with 31 participants. With this kind of interview it is easier to find out about the main motivations, feelings, attitudes and beliefs of the respondents about all the analyzed topics (Quiroz 2011). All selected participants were from Europe. The first contact was made through a social network (this is appropriated since, as explained before, Generation Yers contact each other on a daily basis through online platforms). In order to guarantee that the interview was conducted to the proper segment, the first requested information was related to demographic data such as age, country, education, gender and occupation.

The average age of participants was 25 years (ranging from 20 to 31), which is aligned with the Generation Y (approximately between 13 and 33 years old; we did not approach people under 18). Thereby, 65 % of the interviewees were female and 68 % were college or graduate students, while 32 % were already working. Regarding education, 19 % had a Bachelor’s degree, while the remainder 81 % had a Master’s degree. Participants were from: United Kingdom (22 %), Spain (25 %), Italy (25 %), and France (28 %).

Each interview began by explaining the purpose of the research and the request to record, following planned questions, according to Gubrium and Holstein (2001) and Johnson (2001). The average time for each interview was 60 min. Specific questions asked were: Would you be more willing to buy a luxury fashion brand that is engaging in CSR practices or such would not be a critical aspect in your decision to buy a luxury brand? Why? Do you have some ideas of how a luxury fashion brand can be a better contributor to the environment, society (and even economically be more sustainable) and the world? Before asking these questions each participant was aware of the meaning of CSR.

Regarding data treatment, we started with an impressionistic reading of transcriptions and identification of recurrent main reasons to buy the brand that incorporate CSR practices and suggestions to incorporate CSR practices. The second level of interpretation involved cross-person analysis in order to discover patterns across individuals that could help structure an understanding of the elements behind the core subjects of CSR.

4 Findings

4.1 CSR as a Critical Factor

The majority of participants (61 %) expressed that they would be more willing to buy products from luxury fashion brands concerned with CSR, 13 % did not know and 26 % said that CSR would be a critical factor when they have two brands with similar features. The three main reasons provided by participants for buying luxury fashion brands engaging in CSR, as well as some examples of claims made, are summarized in Table 11.1.

Table 11.1 Reasons for buying luxury fashion brand that incorporate CSR practices
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4.2 Core Factors to Incorporate CSR Practices

Table 11.2 shows the seven core factors according to the participants’ suggestions about the importance given to incorporate CSR practices in luxury brands.

Table 11.2 Core factors to incorporate CSR practices
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Nevertheless, the luxury fashion products and brands, independently of the CRS issues, have features that Generation Yers enjoys and they consider as a motivator for buying. Participants in interviews pointed out four as the core features: (i) high level of quality (quality of materials and finishes of clothing and accessories); (ii) uniqueness (exclusivity and unique features); (iii) design signature (a specific style of each brand); and (iv) heritage (the history of the brand that adds to its authenticity). Thus, based on the CSR factors and the features of the fashion luxury products mentioned by participants, a framework is created and shown in Fig. 11.1.

Fig. 11.1
figure 1

Framework of the core CSR factors and brand features

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5 Conclusions and Implications

Based on the findings, and having into consideration that we conducted an exploratory research, three main points emerge: first, the conceptualization of luxury fashion brands; second, the CSR is suggested to be a critical factor and even environmental issues and labor practices as the main suggestions for CSR implementation; and third, four main features of luxury fashion brands are highlighted by the participants.

Regarding the luxury fashion brands conceptualization, the definition about luxury brands claimed by Mansharamani and Khanna (2013) may be related to the motivations that were mentioned by the participants. Ranking from the most important to the least important one, the participants mentioned that a high level of quality, uniqueness, design signature and heritage are the four most important motivations for buying luxury fashion products.

Although the suggestions made by the participants were coincident to the core factors, the order of importance, comparing the one provided by ISO 26000 from the most relevant to the least relevant, was not the same collected from the results of the study. The environmental issues and labor practices are the most cited, commented and recommended by participants. Generation Y does not like to see barriers, the Millenials know how to use new technologies and how to be influencers, although they are also permeable to being influenced if the companies know how to use the right tools. They are commonly influenced by opinion leaders and by the word spread through online social media and diverse technological communicational tools. Generation Y is concerned about the world, they know what they want, they like to enjoy their time and use it as they want, with flexibility . They are adolescents or young adults and some of them are starting to have important positions in companies and are able to influence their companies with their new ideas.

The perceptions of Generation Yers about the influence of CSR in the luxury fashion brands is related to how the brands communicate their actions and although CSR is sometimes used as a marketing tool, luxury brands should not do it with the purpose of selling, because it is one of the anti-laws for luxury fashion brands , that is, “The role of advertising is not to sell…it is just to make young people dream about them” (Kapferer and Bastien 2009a). Therefore, according to our findings, the participants ask the brands to communicate their actions more intensively and explain real facts about what they are doing related to CSR practices. Generation Y wants to feel involved in social issues and causes. Luxury fashion brands should use different approaches to communicate with younger audiences in order to engage them, without the need to sell their products. However, the goal of the companies is always to boost their sales, so increasing revenues from CSR is not necessarily wrong.

5.1 Theoretical Implications

Luxury fashion brands in Europe are not performing in the same way as they were doing in the end of 20th century due to diverse factors. One of the most important aspects may be the economic crisis over the last few years. Although, the market for luxury fashion brands has grown since 2010, most of the growth is occurring in emerging countries and because Asian consumers have turned into important consumers to the European market (Roberts 2011).

According to the research findings, 55 % of the sample respondents say that CSR, in fact, is a good motivator at the moment of deciding to purchase a specific product from a luxury fashion brand, because they enjoy supporting social issues and causes and the main reason to do that is to foster a sustainable development. Although some of them consider that they will not change their minds and that it will not affect their shopping behavior, others say that they do not care about corporate practices and that the price is a disincentive for them. Furthermore, 61 % of the participants also mentioned that if they have to choose between two brands they will be more willing to buy the one engaged in CSR because they will feel good about helping someone else and also because they think that CSR is a responsibility of each person in the planet. This generation is well informed about CSR practices and is very open to giving some ideas of how luxury fashion brands can help to improve the world.

5.2 Managerial Implications

There are some luxury fashion brands that are performing better than others concerning CSR practices. Being such an important issue for the consumers and potential consumers nowadays, these practices may be included as an important part of their business. Actually, CSR is a very important issue for these young consumers, since 61 % of them mentioned that they will be more willing to buy fashion luxury brands which use CSR tools to help improving the companies and at the same time improving society and the world.

Communication is one of the most important tools that luxury brands should use to be close to the Millennials and to let them know which are their actions concerning these practices. There are many ways to communicate, but the Generation Y is very focused on technological media, especially social networks, but also word-of-mouth and opinion leaders are very important for them. They are used to interacting with the companies and with other consumers or potential consumers before deciding to buy a product, and even after the purchase has been made. For this, they are using different channels and media. This is a generation which is accustomed to fast changes; it is really demanding and well informed.

Based on the participants in the study, it is possible to see that there is a good level of knowledge about the general ideas of these practices, but it is necessary to prioritize which should be first and which is the least relevant subject among all of them. This should be acknowledged not only by consumers or employees, but may also be conveyed to every stakeholder in the company, including all the people in society involved with the company’s practices.

Fashion luxury brands which are open to these practices have the option to publish an environmental report. As these practices are not mandatory, this report is also not, but if they want to convey their actions about CSR in a proper way, this could be a good starting point in order to let people know and have the certainty about what luxury fashion brands are doing to improve the world and society.

5.3 Limitations and Further Research

Although the current research has been developed with caution and rigor, the results should be interpreted with caution. First, the study employed an exploratory method by interviews and not a confirmatory analysis.

Even though participants represent the common Generation Yers in Europe and the saturation had been achieved, they may not have represented all the individuals of such generation. Future studies should use more diverse populations in different cultural contexts; for instance, people from Brazil, United Estates, China, India, or S. Korea.

Second, as this study was based on the fashion luxury industry , it would also be interesting to explore the perception of the Generation Yers about some other luxury sectors such as beauty, beverages, and watches, among others.

Third, future studies are welcomed which analyze how CSR practices may change corporate reputation (in the favorable sense, i.e., improving the reputation of the company or in an unfavorable sense, i.e., lowering the company’s reputation) of fashion luxury brands. The way companies convey such practices can also be a moderator between CSR and Corporate Reputation.

Finally, future research should analyze and compare the perceptions of luxury fashion consumers segmented by personality traits and other socio-demographic variables, extending the research to a quantitative approach.