This chapter aims at covering an important gap, contributing to research in the field of luxury markets as well as sustainable consumption, and focuses on new sustainable products by luxury brands. Through an experimental study 3x1 between-subject design in which the product material (upcycled vs. recycled vs. virgin) of a fictitious luxury product was manipulated, the authors investigated which luxury product (upcycled vs. recycled vs. not sustainable) is preferred by consumers in terms of attitude and purchase intentions. Results of this experimental design can inform luxury product managers and designers about whether consumers react more positively towards upcycle vs. recycle products when consumers' status motives and environmental consciousness increase. In addition, they can understand the reasons and emphasize those in their marketing communications to increase demand for those products with this study.
Top1. Introduction
Over the past few years, due the general acknowledgement of the human impact on the environment and of the expected worrying climate changes, the issues concerning the circularity of the economy have become progressively familiar all over the world and words like “Recycling”, “Renewable” or “Recovery” have been integrated in the common vocabulary. This, along with the serious measures taken by governments such as the “Single-Use Plastic Directive”1 firstly proposed 2018 by the EU Commission which aims to prohibit the utilization of single-use plastic within 2021 and limit plastic waste, or the “long-term plan”2 to reach a “zero climate impact” by 2050 also presented in 2018, led to several structural changes in the market and, as a consequence, has forced the companies to modify their production organization and their business approach in order to respond to the different market requirements. This is quite relevant considering that nowadays consumers, especially millennials, are strongly aware of environmental issues and do support activities such as corporate social responsibility (CSR; Unilever, 2017). Leary et al. (2014) has showed that ethical concerns can have significant impact in terms of consumer behaviors when customers felt their simple action could have a real effect and market influence. Moreover, customers have a tendency to assume that especially luxury brands, due to their prosperous businesses, are exactly the ones more able to make a change towards a greener and more equal world and the ones in charge of leading by example. As a consequence, being sustainable has become an expected and intrinsic element of quality, especially for luxury goods. Expensive products that would not respect the natural and social environment can be negatively perceived by the market, arousing anger among consumers (Kapferer and Michaut, 2015). In that sense several luxury brands are moving their production processes towards a circular perspective, namely a perspective that involves lengthening the life cycle of materials goods. Typical production processes related to a circular perspective are recycling and upcycling. Upcycling can be defined as the reusing of discarded objects or material, just as they are, in such a way as to incorporate them in a totally new product of a higher quality or value than the original ones. On the other hand, recycling is the conversion of waste into reusable material by downgrading it into raw inputs and then using these raw factors in a new industrial process. If an item is being recycled, it goes back into production and is transformed into a completely different one.
For example, Gucci launched an upcycling initiative of waste leather and textiles generated during the production process, adapting its brand name (i.e., Gucci-Up)3, similarly Prada introduced a handbag line made out of regenerated materials, called Prada re-nylon4. Stella McCartney produces bags using fabric made from recycled water bottles and recycled polyester instead of virgin polyester.
Despite a huge number of studies examining the relationship between luxury and sustainability (e.g., Achabou & Dekhili, 2013; Amatulli et al., 2017; Davies et al., 2012; De Angelis et al., 2017; Griskevicius et al., 2010; Janssen et al., 2014) little is known about consumers perceptions about luxury brands producing upcycled vs. recycled products.
The objective of this book chapter is to cover this research gap, shedding light on mechanisms that can lead to a higher vs. lower consumers’ evaluation of luxury products using circular economy production processes. In doing that this chapter contributes either to the growth of the stream of research related to luxury consumption and either to luxury brand managers providing them directions about sustainable production processes better fitting to luxury concept.
The remaining of this book chapter is structured as follow. First, a literature review about sustainability and luxury brands will be provided together with the related theoretical framework and hypotheses. Subsequently, in the method section an experimental study aimed at testing the proposed hypotheses will be presented. For concluding a discussion of the findings and presentation of the managerial implications will be offered.