Can the luxury industry be inclusive and exclusive at the same time?




Knowledge@Wharton staff
Presented here for discussion is a excerpt of a current article published with permission from Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.
The luxury market has made a lot of progress in a short time by creating diversity councils, appointing chief diversity officers and developing special programs for underrepresented groups. But the very definition of luxury seems contrary to equality, raising questions about whether the industry can truly commit to the cause.
“I think it’s important to note that, by design, many luxury businesses are actually exclusive. That’s what we see in the media, that it’s something that only few people are supposed to touch,” Wharton management professor Stephanie Creary said recently on the livestream series, Leading Diversity@Wharton. “So, it seems a little bit of a paradox that an exclusive industry can actually begin to embrace the principles of diversity, equity and inclusion.”
Ms. Creary, who is a diversity and identity scholar, was joined by Kalpana Bagamane, chief diversity, inclusion and talent officer at luxury group Kering, and Dr. Atira Charles, head of inclusion, diversity and equity for North America at Moet Hennessy, part of the LVMH luxury conglomerate.
Ms. Bagamane argued that e-commerce and social media have extended the reach of luxury brands to every corner of the globe.
“The world has become a lot larger, which I think has made luxury, instead of exclusive, more accessible and aspirational,” she said. “We’re trying to be more aspirational, which is more inclusive, and we want to meet the consumers where they are. The last thing we want to do is exclude people.”
Ms. Charles said sorting out the complexities of diversity is a “daily conversation” in the industry because it’s about more than just race and gender.
“The industry is exclusive by product, but it should not be exclusive by identity,” she said. “Where it gets a little gray — and I think the industry is sorting this out — is how do we become inclusive by socioeconomics when, by definition, our price structure is high? And how do we also responsibly acknowledge that there is an intersection of things such as race and socioeconomic status? It really becomes this organizational dilemma that’s rooted in this larger societal dilemma.”
- How Can the Luxury Industry Become More Inclusive? – Knowledge@Wharton
- How Can the Luxury Industry Become More Inclusive? – YouTube
DISCUSSION QUESTIONS: Is inclusivity an oxymoron when it comes to the luxury products industry? Do you see DEI (diversity, equity and inclusion) challenges that are unique to the luxury industry?
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13 Comments on "Can the luxury industry be inclusive and exclusive at the same time?"
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President of FutureProof Retail
No oxymoron here. The exclusivity of luxury is maintained by its price tag. Anyone that can afford it is welcomed.
Principal, Retail Technology Group
Luxury brands purposely try to maintain exclusivity, but are hardly racially or ethnically motivated. It is about affordability or, in this case, the opposite thereof. The inequality in luxury is pricey versus not, hardly a social justice issue.
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
The photo at the top of the page answers the question. The three models look pretty diverse (inclusive) to me. The retailer is Louis Vuitton, a pretty exclusive brand.
Price is the real measure of exclusivity, which is a warning to luxury brands. Don’t reduce you price/quality to attract more customers — it will only denigrate your supposed exclusivity.
Founder, CEO, Black Monk Consulting
Founder, Grey Space Matters
Income inequality is the single biggest challenge to the luxury segment. Luxury itself can only do so much to address this but one strategy is to create on-ramps to make it accessible for younger and less economically advantaged customers and prospects.
Founder, CEO, Black Monk Consulting
Phil, I think you could argue exactly the opposite — that is that income inequality is the foundation and raison d’être of the luxury segment. Why would high-end luxury brands want to scale into mass market goods? Their ability to charge, what for many are prohibitive prices, are part of what makes them attractive to the many of their target consumers.
Founder, Grey Space Matters
Totally fair. I omitted the word “inclusivity” as my response was based on the challenges relative to DEI, as some aspects of diversity are clearly correlated with income inequality. Hence the paradox. It’s interesting to see some clients put accessibility to luxury but making it “stackable,” but that also brings into question relevance in terms of other demographic variables such as age.
Chief Strategy Officer, Hoobil8
President, Protonik
Hmm. To be a free market geek (and luxury is really a fully free market exercise), luxury prices and value are supported by exclusivity — by having things a little tough to get. This is a place where friction plays a role in increasing the price the customer will pay. Yet the inclusivity discussion seems to ignore the free market.
Where there is extra money, there is opportunity for luxury. The more appropriate answer seems to be that luxury goods suppliers should be aware that they are missing out on key potential luxury goods markets and should seek them out. They’re not different from other luxury markets — but they come from finding where wealth exists not from forcing some other change.
Founder | CEO, Female Brain Ai & Prefeye - Preference Science Technologies Inc.
If DEI is a real concern to those who design, manufacture, and market luxury products, feel free to correct the DEI problems detailed in the Wharton article. As we all know, actions do speak louder than words. Or as some say “talk is cheap.” Rather than self-berating by those who create luxury products, simply flip the luxury dynamic and design product for everyone of every identity at low prices, low, low prices any identity and everyone can afford, just like Walmart.
If a Luxury design is truly aspirational then enabling the masses of any identity to afford aspiration becomes a declaration of true Diversity, Equity, and Inclusion for all! Luxury DEI challenge solved.
CPG/Retail enthusiast, blogger and a couch potato warrior
It is not possible for luxury product companies to maintain their exclusivity through differential pricing while at the same time promoting inclusivity and diversity in their general hiring, leadership structure, brand communication, social initiatives, vendor selection, etc.?
CFO, Weisner Steel
The underlying assumption here seems to be that those who sell (and design and market) something should or at least do look like those who buy it. It’s a dubious premise at best and increasingly irrelevant as the wealthy become more, well … diverse.