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Sustainable Luxury with Francine Petersen

by Veronica Luedke

Last fall, NC State welcomed Dr. Francine Petersen, Associate Professor at the European School of Management in a collaboration between the Poole College Business Sustainability Collaborative and the Global Luxury Management Program.  Dr. Petersen spent two days engaging with the NC State community on a series highly engaging discussions centered on her research on consumers’ emotional perceptions of sustainable luxury. These collaborative sessions allowed Poole College students and faculty to get a glimpse into the depth of her findings and their applicability in the luxury industry today.

In her research, Dr. Petersen develops the unique and relatively untouched relationship of luxury and a corresponding shift toward socially and environmentally sustainable business practices. Nowadays, Dr. Petersen said, typical luxury consumers are moving their focus away from materialism and toward a heightened experience. Consumers are seeking transparency in the product lifecycle, which becomes increasingly salient to the overall luxury experience. In today’s market, consumers’ emotional response to the product story and the brand story is now affected by every corporate action.

Dr. Petersen focuses on the consumer’s emotional perception of a luxury brand’s commitment to a sustainable business process. Her findings describe how the perception of a luxury brand is driven by the individual consumer’s existing relationship to that brand based on multiple variables such as income and education. She finds that, contrary to our intuitive expectation, these particular variables negatively influence luxury brands’ ability to compete. In this way, the more attainable a luxury item is, the less positive the consumer would perceive the brand and the more it would be viewed as excess. However, from her results, we see that perception of excess is negatively correlated with income and education when corporate responsibility is present. In other words, as sustainable luxury becomes more attainable, via income and/or education, for example, the individual’s emotional response to the responsible luxury brand is generally more positive and the less it is viewed as excess.

Consumers’ emotional reactions may be rooted in numerous psychological phenomena, Dr. Petersen argues. One simple explanation is cognitive dissonance, influencing reasoning as people strive to align their beliefs or ideologies with their actions. If an individual who does not consume luxury associates himself with sustainable actions, he may view sustainable luxury as excessive because he himself is not consuming the product, avoiding the cognitive dissonance. As humans, our subconscious minds would ask, How can this product be considered sustainable if I have not considered purchasing it? Conversely, cognitive dissonance is avoided for the individual consuming luxury when sustainable luxury is perceived positively as his personal beliefs are being mirrored by his own actions of consumption and reinforced by the responsible actions of the brand. The fact that the brand is socially and environmentally responsible, simply makes him feel good.

The overarching question is, Can luxury be sustainable? Sustainable luxury, by definition, is “the concept of returning to the essence of luxury with its traditional focus on thoughtful purchasing and artisans manufacturing, to the beauty of quality materials and to the respect for social and environmental issues.” Luxury can be sustainable and is sustainable in its purest form. Characteristics such as exclusivity and timelessness define luxury. When considering a luxury purchase, many first think of the expense of an item. Indeed, the expense is associated with luxury and also influences perceptions of excess. While increased social and environmental responsibility should really translate into higher prices, this does not negate luxury’s ability to be sustainable. Therein lies the global debate.

Dr. Petersen’s insights allow us a deepened understanding of consumer behavior. Her research is novel and brings light to the challenge corporations face in gaining global allure for their products. Luxury is not just about consumption – it surrounds an idea. Luxury is exclusive, and the desire for luxury must stem from consumers as well as those aspiring to attain. This is why harnessing a global understanding of consumer behavior and emotional desire is so utterly important.

Ultimately, Dr. Petersen unveils the inner workings of the dynamic consumer. We are incredibly fortunate to have been involved in her research process and look forward to maintaining the relationships fostered during her visit.

The knowledge gained due Dr. Petersen’s generosity is invaluable, and I believe I speak for all students, faculty, and staff at Poole College in saying that we anxiously await the final publication to be released this spring. Stay tuned.