The impact of corporate social responsibility in the luxury industry

Abstract

The luxury industry practices have always been one of the most unethical, but in the 21st century, this is starting to cause some issues. The mindset of this century is constantly evolving and turning more eco-friendly and ethical, rejecting old procedures. These society’s changes are resulting in a decline of the fashion luxury brands’ reputation and also, in their sale and profits, which leads them to create a new management strategy, one more aligned with Corporate Social Responsibility (CSR). The aim of this study is to analyze the importance of CSR practices in the luxury industry nowadays, taking as an example two iconic luxury brands, Hermès and Tiffany, which follow different paths and values and so, analyzing the reactions to these practices in their internal and external environment in two countries, France and Mexico, which have major cultural differences. In order to identify this, a deep analysis of the two brands will be made, revealing their actual business strategies and their mistakes, likewise, a complete description of the two countries’ culture, mindsets and implication in the luxury business. This study recovers the different perspectives from a sample of 100 users and non-users of these brands, as well as their opinion on possible changes to these practices, but also the vision of internal players who actually apply those strategies. It is interesting to notice from these results that, from the 100 persons interviewed, 58 were not even able to mention one CSR practice that these brands implement and 46 think any luxury brand could be ethical and eco-friendly. We will see in this case study that the answers vary drastically according to the country (France or Mexico) and the people have different interpretations to each brand’s strategy as well as different recommendations. It is curious to realize that most of the visions of these persons from each brand are completely wrong. The aim of this study is then to find which strategies are and should be implemented in each brand in each country in order to satisfy their clients or potential customers, respecting the external environment.