Luxury Don’t Fail Us Now

7 Jul 2020 , 6:30am

Luxury brands are making belated moves to support Black Lives Matter but forgetting the crux of the matter - the spending power of the 'cool' Black marketplace, says Parsons Assistant Professor of Fashion Management Christopher Lacy.

It’s safe to say to say that “luxury” cannot be defined unilaterally. Is luxury based on cost, quality, origin, or experience? At its core, luxury is about aspiration; something better; the ability to see the best version of ourselves.

A global pandemic has disrupted supply chains; aspirational customer spend has just about evaporated; and civil unrest has sparked a worldwide movement about systematic racism. From executives making space for diverse perspectives, to Instagram influencers sharing their platform with counterparts of color —even Nascar responded to the call, removing a longstanding symbol of oppression. We’re bombarded with public statements from household brands to technology start-ups. But where are our luxury brands in all of this? They are our beacons of what life is supposed to be, the best of whatever experience we wish to have. Unfortunately, luxury has lost its way, believing it must remain exclusive to stay spectacular.

Luxury brands making statements in support of Black Lives Matter remind me of a scene in the 1985, John Hughes movie Weird Science. To impress their high school tormentors, the protagonists Gary and Wyatt, decide to recreate the events that led to the creation of Kelly LeBrock. Unfortunately, in their haste, they forget the crucial step of connecting the electrodes to the doll. Instead, the electrodes have been left atop a magazine featuring a Pershing II medium-range ballistic missile, causing the weapon to appear.

Like Gary and Wyatt, the luxury industry, in its mission to act quickly, is doing so incompletely; it is missing a crucial step in the success of authentically connecting with consumers: it is neglecting the data. Simply, sending a communication on social media platforms with a black square and a hashtag is the bare minimum for an industry that sets the standard for how life should be. Yes, Black Lives Matter but why do they matter?   Understanding the Black community through data just might be the first step in engaging the majority of underserved consumers. In the US, the Black community is 47 million strong with a buying power of $501 billion, greater than many countries’ GDP. This consumer base is centered in social and community issues and is technologically savvy with a clear understanding of how brands speak to it…or don’t.

A 2019 Nielsen study found that African Americans are 20% more likely to pay extra for product that conveys the image they want to portray and 52% enjoy in store shopping compared to 26% of the total population, which makes them an ideal target for the luxury industry. Yet, with all this information, brands decreased messaging and advertising to the Black community by 5%. Even though Black shoppers are the most brand loyal demographic, as highlighted in Customer.com’s 2018 Retail Customer Loyalty Study. 

So why is all this information important? Because, the answer to many luxury retailers’ questions might just lie within the behaviors of the Black community. Instead of using Black culture as only inspiration, understand it as a customer.  How should the in-store experience look and feel? What technology can be integrated for a consistent customer experience? Where can we connect on a cultural level? By connecting with the African American community, luxury might also better understand how to engage other underserved but highly influential demographics like the LGBTQ community who has $3.7 trillion of disposable income, Hispanics at $582 billion, and those with disabilities with $490 billion. One could simply look at Street Wear and its influence on luxury style as the reach of the Black dollar.

Brands like Gucci, Louis Vuitton – even Chanel – understand the importance of Street Wear to their sales.

Nielsen quoted Cheryl Grace, Senior Vice President of U.S. Strategic Community Alliances and Consumer Engagement as stating, “Our research shows that Black consumer choices have a ‘cool factor’ that has created a halo effect, influencing not just consumers of colour but the mainstream as well. These figures show that investment by multinational conglomerates in R&D to develop products and marketing that appeal to diverse consumers is, indeed, paying off handsomely.”  

By harnessing data, luxury can begin to approach consumers from a new perspective, from the voice of the growing majority. Brands cannot afford to ignore the social issues of its customers, not now.  Luxury’s greatest asset is creating the world we want to live in through products, services, and experiences for all. The only way that can happen is by understanding the behaviors of all customers. That means luxury brands have to place those who have been underserved in the driver seat of the luxury car, in the luxury home, in the jewelry, in the clothing, and at the resort. Luxury must adapt and understand that it does not exist for the few but for any who aspire to experience it. So yes, Black lives do matter, especially to luxury retail, because those lives have provided a culture of aspiration, and have opened the gateway for others to be heard and represented. True luxury is when we can all share in a better experience, so luxury don’t fail us now; we’re depending on you. And you’re bottom line is depending on us, too.

Christopher Lacy is Assistant Professor of Fashion Management at Parsons. He has worked with businesses such as Armani, Hugo Boss, Donna Karan, Omega, Zilli and Gucci and is founder of Christopher Lacy Consulting which assists companies build and execute training initiatives and client development strategies to improve external and internal customer journeys.