At the height of the COVID-19 pandemic, the social engagement of the major luxury groups was on proud display. Factories that formerly produced luxury products began churning out hectoliters of hydroalcoholic gels, tons of surgical gowns, protective masks and more much-needed equipment. Taking up a position at the forefront of the health emergency, luxury brands were there on the front lines, meeting emergency needs, and conquering new ground in the process.
As society begins to reflect on the new challenges it will be facing in the wake of the crisis, the luxury industry has a role to play. By its nature, the sector is ideally positioned to be in the forefront of a shift in mentality, since it is a sector inherently in direct contact with an economy of emotion. The players in the luxury industry have a proven track record in anticipating the values that will shape tomorrow's consumers. But do they have the ability to visualize the social challenges that the economic crisis will bring? The wave of internal resentment that Compagnie Financière Richemont is currently experiencing may raise some doubts about that. We know that dialogue between unions and employers has been difficult for years in the luxury industry, and it will probably only become even harder.
The pandemic has brought so many deep-seated feelings to the surface. There are, of course, the positive, like a growing understanding of the proven benefits of a return to basics during the lockdown phase (what many call the "new luxury") or the harsh economic reality of shrinking wages and purchasing power. But there is the negative as well; in trying to highlight the industry’s social relevance, the societal positioning of the luxury industry has become something of a paradox.
But the tide has turned, and luxury brands can no longer overlook the meaning attributed to their actions. A redefining of luxury as a more ethical, responsible segment is clearly within reach. Sustainable management of production activities and integrating of the principles of equity and social justice will need to be a part of this. We have only seen the beginnings of implementation of these practices in the industry, and emergence from a crisis is the perfect time to move this implementation forward.
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