Luxury jewellers must appeal to consumers’ conscience

Posted September 28, 2010 | By Sonia Nair

Luxury jewellers are being urged to respond to an emerging social conscientiousness among consumers in order to secure commercial success.

President of CIBJO’s marketing and education commission Jonathan Kendall, who wrote the report that the findings are based on, said the global financial crisis has prompted consumers to rethink their purchasing decisions and place a greater importance on ethics.

“Customer awareness and concern for social, ethical and environmental issues also underpin a desire for their purchases to provide a lasting, meaningful experience,” he said.

“Innovative product concepts, luxury recycling, accessible supply chain information and a visible celebration of the craftsmanship will appeal to tomorrow’s customer.”

Kendall revealed the report’s findings at a jewellery corporate social responsibility (CSR) session held at the Shanghai Expo last week.

According to Kendall, the search for greater efficiency in the economic downturn may have led some companies to omit CSR initiatives from their agenda because of budget cuts and increased scrutiny of company expenditure – a move he believed would affect customer loyalty.

“It can be tempting to regard corporate responsibility initiatives as an expensive indulgence that companies can no longer afford,” Kendall said.

“This is dangerous. Corporate responsibility has [transformed] from a buzzword to a vital, value-added pursuit.”

Kendall highlighted that luxury consumers’ previous appreciation for excellence has now gone so far as to make them avoid any product that has degraded the environment or exploited workers in its production.

He said the current challenge for luxury jewellery companies will be to balance investment in CSR, so they can maintain market share without jeopardising profits.

Kendall advised luxury companies to change their broader mindset to create a long-term business strategy. He said luxury companies have to explain to staff why CSR is good for business, ensure it has shareholder value, demonstrate how there is a return on investment in CSR initiatives and get key senior members to endorse CSR.

That aside, Kendall conceded that “selfless altruism [is] unsustainable”.

He urged luxury jewellers to be transparent in their actions and said that would, in turn, allow customers to better understand the production process.

Yet he admitted that maintaining transparency in manufacturing would be no easy task for businesses such as jewellers that have to source materials like precious stones and metals.

“While guaranteeing the provenance of one or two components is feasible, sourcing everything with the same vigilance may be nigh impossible. Contentious raw materials can never be far behind in a world renowned for its uniqueness and exclusivity.”

Although the immediate financial value of implementing CSR strategies may not be apparent, Kendall said jewellers would reap the benefits in the long run.

“The luxury industry is better placed than many to make a positive change in the world. By being at the forefront of all things new, it is also in pole position to conceive new ways to inject the feel-good factor into its luxury purchases.”

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