Can the luxury industry be inclusive and exclusive at the same time?

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Photos: Facebook/@LouisVuitton
Apr 07, 2021
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Knowledge@Wharton staff

Presented here for discussion is a excerpt of a current article published with permission from Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.

The luxury market has made a lot of progress in a short time by creating diversity councils, appointing chief diversity officers and developing special programs for underrepresented groups. But the very definition of luxury seems contrary to equality, raising questions about whether the industry can truly commit to the cause.

“I think it’s important to note that, by design, many luxury businesses are actually exclusive. That’s what we see in the media, that it’s something that only few people are supposed to touch,” Wharton management professor Stephanie Creary said recently on the livestream series, Leading Diversity@Wharton. “So, it seems a little bit of a paradox that an exclusive industry can actually begin to embrace the principles of diversity, equity and inclusion.”

Ms. Creary, who is a diversity and identity scholar, was joined by Kalpana Bagamane, chief diversity, inclusion and talent officer at luxury group Kering, and Dr. Atira Charles, head of inclusion, diversity and equity for North America at Moet Hennessy, part of the LVMH luxury conglomerate.

Ms. Bagamane argued that e-commerce and social media have extended the reach of luxury brands to every corner of the globe.

“The world has become a lot larger, which I think has made luxury, instead of exclusive, more accessible and aspirational,” she said. “We’re trying to be more aspirational, which is more inclusive, and we want to meet the consumers where they are. The last thing we want to do is exclude people.”

Ms. Charles said sorting out the complexities of diversity is a “daily conversation” in the industry because it’s about more than just race and gender.

“The industry is exclusive by product, but it should not be exclusive by identity,” she said. “Where it gets a little gray — and I think the industry is sorting this out — is how do we become inclusive by socioeconomics when, by definition, our price structure is high? And how do we also responsibly acknowledge that there is an intersection of things such as race and socioeconomic status? It really becomes this organizational dilemma that’s rooted in this larger societal dilemma.”

DISCUSSION QUESTIONS: Is inclusivity an oxymoron when it comes to the luxury products industry? Do you see DEI (diversity, equity and inclusion) challenges that are unique to the luxury industry?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"No oxymoron here. The exclusivity of luxury is maintained by its price tag. Anyone that can afford it is welcomed."
"In the end, I think diversity (people not like us) and inclusion (people we define as part of our tribe) are inherently oppositional forces."
"If a Luxury design is truly aspirational then enabling the masses of any identity to afford aspiration becomes a declaration of true Diversity, Equity, and Inclusion for all!"

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13 Comments on "Can the luxury industry be inclusive and exclusive at the same time?"


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Di Di Chan
BrainTrust

No oxymoron here. The exclusivity of luxury is maintained by its price tag. Anyone that can afford it is welcomed.

Bob Amster
BrainTrust

Luxury brands purposely try to maintain exclusivity, but are hardly racially or ethnically motivated. It is about affordability or, in this case, the opposite thereof. The inequality in luxury is pricey versus not, hardly a social justice issue.

Gene Detroyer
BrainTrust

The photo at the top of the page answers the question. The three models look pretty diverse (inclusive) to me. The retailer is Louis Vuitton, a pretty exclusive brand.

Price is the real measure of exclusivity, which is a warning to luxury brands. Don’t reduce you price/quality to attract more customers — it will only denigrate your supposed exclusivity.

Peter Smith
Guest
9 days 40 minutes ago
Joining the club matters, and it is easier to rationalize premium prices if the club (read brand) feels more exclusive. Would a Porsche 918 Spyder be as aspirational if more people drove them? Would shoppers pay $2500 for a Gucci bag if every other person carried one? What seems to be changing is the very definition of luxury branding itself – and LVMH is perfectly positioned to traverse that somewhat blurry line with its recent acquisition of Tiffany & Co. In the 1980s, Tiffany had eight or nine stores in the U.S. and was seen as an exclusive club. You had to live or visit a major city to find a store and the experience was by its very nature exclusive. Today, Tiffany has more than 100 stores throughout the U.S. and its model has evolved to be much more accessible. While the definition of luxury brands will likely change with the evolution of retail itself, what is less vague is that luxury brands will need to articulate a clear sense of what they want… Read more »
Ryan Mathews
BrainTrust
At the highest end of the luxury goods industries green is the only color that matters. If you can afford the ante, you automatically get to play. One note on DEI. In the end, I think diversity (people not like us) and inclusion (people we define as part of our tribe) are inherently oppositional forces. Most pro-inclusion folks, for example, don’t want to extend the boundaries of inclusion so far that they permit racists, misogynists, homophobes, etc. to join their group. There’s generally no room for the Klan in the clan. Inclusion – as currently defined – means people with different qualities that agree with us, not exactly a formula for total and true diversity. Next, I don’t think there is “a” luxury goods industry. There are at least three. At the very highest end, anyone with enough cash is welcome. Below this tier are brands like Hermes, Coach, etc. Oddly, this second tier of the luxury market is probably less diverse and more exclusive – it’s part of what they are selling. Finally, there… Read more »
Phil Rubin
BrainTrust
9 days 19 minutes ago

Income inequality is the single biggest challenge to the luxury segment. Luxury itself can only do so much to address this but one strategy is to create on-ramps to make it accessible for younger and less economically advantaged customers and prospects.

Ryan Mathews
BrainTrust

Phil, I think you could argue exactly the opposite — that is that income inequality is the foundation and raison d’être of the luxury segment. Why would high-end luxury brands want to scale into mass market goods? Their ability to charge, what for many are prohibitive prices, are part of what makes them attractive to the many of their target consumers.

Phil Rubin
BrainTrust
7 days 23 hours ago

Totally fair. I omitted the word “inclusivity” as my response was based on the challenges relative to DEI, as some aspects of diversity are clearly correlated with income inequality. Hence the paradox. It’s interesting to see some clients put accessibility to luxury but making it “stackable,” but that also brings into question relevance in terms of other demographic variables such as age.

DeAnn Campbell
Guest
Luxury brands have an added challenge over mainstream brands. Luxury customers can buy from any brand. They choose a specific brand because of quality, but equally because of image. With the breadth of unsolicited influencers posting on social media daily, a brand can lose control of its image very quickly. Case in point is Dapper Dan – whose designs transformed what the music industry wears today. Luxury brands could not control the direction he took their products. Fortunately Gucci was smart enough to take the “if you can’t beat em’, join em” approach and hired him on, but in so doing their brand image changed, and so did their customer base. It was a choice they made, and it was right for them, but wouldn’t be right for perhaps Chanel. Luxury brands are unfortunately more reliant than others on cultural perception. I’m a short, middle aged woman and I guarantee Juicy Couture would not want me walking around in one of their velour sweatsuits with “Juicy” stamped across the backside! Inclusivity is an incredibly important… Read more »
Doug Garnett
BrainTrust

Hmm. To be a free market geek (and luxury is really a fully free market exercise), luxury prices and value are supported by exclusivity — by having things a little tough to get. This is a place where friction plays a role in increasing the price the customer will pay. Yet the inclusivity discussion seems to ignore the free market.

Where there is extra money, there is opportunity for luxury. The more appropriate answer seems to be that luxury goods suppliers should be aware that they are missing out on key potential luxury goods markets and should seek them out. They’re not different from other luxury markets — but they come from finding where wealth exists not from forcing some other change.

Cynthia Holcomb
BrainTrust

If DEI is a real concern to those who design, manufacture, and market luxury products, feel free to correct the DEI problems detailed in the Wharton article. As we all know, actions do speak louder than words. Or as some say “talk is cheap.” Rather than self-berating by those who create luxury products, simply flip the luxury dynamic and design product for everyone of every identity at low prices, low, low prices any identity and everyone can afford, just like Walmart.

If a Luxury design is truly aspirational then enabling the masses of any identity to afford aspiration becomes a declaration of true Diversity, Equity, and Inclusion for all! Luxury DEI challenge solved.

Venky Ramesh
BrainTrust

It is not possible for luxury product companies to maintain their exclusivity through differential pricing while at the same time promoting inclusivity and diversity in their general hiring, leadership structure, brand communication, social initiatives, vendor selection, etc.?

Craig Sundstrom
Guest

The underlying assumption here seems to be that those who sell (and design and market) something should or at least do look like those who buy it. It’s a dubious premise at best and increasingly irrelevant as the wealthy become more, well … diverse.

wpDiscuz
Braintrust
"No oxymoron here. The exclusivity of luxury is maintained by its price tag. Anyone that can afford it is welcomed."
"In the end, I think diversity (people not like us) and inclusion (people we define as part of our tribe) are inherently oppositional forces."
"If a Luxury design is truly aspirational then enabling the masses of any identity to afford aspiration becomes a declaration of true Diversity, Equity, and Inclusion for all!"

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