Lessons from the luxury top – from good to great
From Shinola, which is crafting American-made watches in Detroit, the Motor City, helping transform its image and neighborhoods, to Brunello Cucinelli, there is a noticeable trend of greater engagement by luxury brands. With an increasing consciousness from the top, luxury brands should be more engaged in philanthropic initiatives (PI) and give back more than just the average amount. According to Bain, 94% of luxury consumers worldwide expect luxury brands to be more conscious than other industries. That may be the explanation.
Interestingly enough, many luxury brands such as BMW are still shy about its engagement, be it cultural. BMW may think twice as, according to Bain, there are many multiple benefits to a greater engagement of brands. Bain reports that doing good leads to impressive growth.
Do luxury brands find redemption taking on more philanthropic initiatives? Are Philanthropic Initiatives the next holy grail bringing a greater sense of purpose? Whatever may be the hidden or plain agenda, philanthropic initiatives pay off.
Are Philanthropic Initiatives the next holy grail bringing a greater sense of purpose?
According to a recent study, Bain sees many tangible measures from PI starting with higher employee engagement, resulting in better performance, and further building the reputation of the company in the market. Not to mention, companies obtain free advertising and media that talks about the company in a much broader way, which is more relevant to the consumers.
Talking about creating a better place, developing economical sustainability, fostering cultural initiatives, and engaging employees for a greater cause are all good news. Luxury brands are increasingly paving the way and taking leadership. There are an increasing number of luxury brands whose success comes directly from their ethical conduct and engagement in PI. Maiyet, a modern, luxury fashion brand that partners with global artisans to incorporate exquisitely handcrafted details into its collections is a perfect example. Shinola seems to bring jobs before watches, and profits. Warby Parker, with its unique approach to business, has seen its business (over 100m$) and valuation (1,2 bn$) skyrocket in less than 5 years!
Yet consumers may still not switch to a brand because of luxury brands’ philanthropic engagements. There are many other fundamental dimensions to a brand, its appeal and stature: craftsmanship, aesthetics, heritage, etc. Philanthropic initiatives are the result of a greater purpose beyond just creating great products.
Philanthropic initiatives are the result of a greater purpose beyond just creating great products.
Nevertheless, according to Bain, luxury brands should approach PI strategically as it increases the level of engagement and loyalty.
Among the 5 golden rules Bain strongly recommends for luxury brands to follow are:
1. Pick your fight
2. Make it relevant
3. Don’t be shy
4. Bring it close to relevant audience
5. Involve your audience
Ensuring long lasting success.