In recent years, brands have demonstrated that if they stand up for something they believe in, be that a charitable cause, social responsibility or ethical sourcing, then consumers, especially millennials, will respond positively. Look no further than Nike’s most recent advert with Colin Kaepernick: divisive as it was, Nike saw their sales rise by 31% from Sunday to Tuesday. From donations to foundations, collaborations to sustainable development, luxury watch brands are showing that they can stand up and cause positive change in one way or another.
Social responsibility wanted
In a recent study by SproutSocial, 66% of consumers declared that it was important for brands to take a public stand on social or political issues. Another survey by Kantar Consulting found that 61% of both millennials and centennials like brands that “have a point of view and stand for something”. This new age of consumers is more conscious than older counterparts, and with more buying power than any other generation, it’s important that brands listen… which, thankfully, they are. For example, in a bid to make gold-mine operators more mindful of the environment and the welfare of their workers, Chopard announced that they would only use ethical gold in their products, i.e. acquired from responsible sources that meet the best global practice in environmental and social standards.
With information on corporate social practices so readily available, it makes sense, even from a purely financial perspective, that brands show responsibility and support sustainability. A report by Nielsen actually showed that 66% of consumers are willing to spend more on a product if the company or brand has good ethical values. Beyond sustainability projects, brands show their social awareness by collaborating, partnering and working alongside charities or NGOs to try and make a difference. It’s important, however, that brands don’t view this involvement simply as a means of boosting their image. For consumers to buy into the partnership, there needs to be a genuine connection between the two.
Charities using luxury’s generosity
A great example of this is Blancpain’s Ocean Commitment Circle. Ocean preservation is an issue that’s close to the brand’s heart, as they produced the first-ever modern dive watch in 1953. For almost 60 years now, Blancpain have been supporting the oceans in multiple ways, with donations to major scientific expeditions and projects, as the lead sponsor of the World Ocean Summit, and through special-edition timepieces in which a percentage of the sale goes towards the Ocean Commitment project.
These limited editions create a three-way value chain between the charity organization, the brand and the consumer:
- The charity wins as it receives money from the sale and spreads its reach with each purchase.
- The brand wins as it strengthens its ties to the charity, creates a positive brand image and connects with the consumer on an emotional level.
- The consumer wins as they become part of something bigger than simply a luxury item and bypass the guilt that many consumers cite when purchasing a luxury product.
As the imperative for luxury watch brands to “give back” increases, so too does their involvement in charities. With this in mind, some charities have intelligently attached themselves to certain industries, such as the Only Watch Auction in aid of Duchenne Muscular Dystrophy. Held every two years, the luxury watch brands supporting the event must donate a one-off timepiece for auction. Intentionally or not, this pits companies against each other, and offers them the opportunity to “show off” to consumers and be seen as the most innovative or impressive name in the industry. The last auction, in 2017, raised over $10 million and broke several world records in the process.
The future of charity collaborations
- Consumers demand more transparency
The more readily available information becomes, the more consumers begin to question what they see – especially when trust is at an all-time global low. Transparency within collaborations will become more vital while sustainability must be at the forefront of every brand’s philosophy. In a recent report, millennials demanded transparency from businesses even more so than from politicians or friends and family.
In an industry such as the gold or diamond trade, achieving full transparency of the lives affected is almost impossible… or is it? Blockchain technology has the potential to transform not just diamonds and gold, but also traceability in the wider luxury industry. Using blockchain throughout the full supply chain of raw materials would not only offer far greater transparency to both the brands and the consumers, it would also force mine operators to ensure best practices, both ethically and environmentally.
- Engaging millennials
Millennials are often priced out of current collaborations and initiatives. For example, the Only Watch timepieces often fetch in excess of $100,000, and limited editions in support of charity partners can be similarly beyond their price range. Luxury watch brands have only recently begun to seduce millennials, but as their buying power increases rapidly, these brands need to find a way to make their partnerships inclusive to more than just very high-end buyers.