Reactive Vs. Proactive
Holding Luxury Brands Accountable for Cultural Miscues
It’s common knowledge that many associate wealth and having “arrived” with the designer labels that a person wears. The perception is that the more high-end labels you flash, the more successful you must be. In diverse communities, especially, these aspirational labels indicate upward mobility. Well, until Warren Buffet is seen in a Gucci outfit, we can safely store that myth in the “absurd” category.
Recently, luxury brands such as Burberry, Gucci and Dolce & Gabbana have come under public scrutiny for releasing culturally insensitive and racially offensive ads or products, risking acceptance for their product in this growing market.
These brands do an exceptional job of perpetuating the “labels reflect success” narrative. They know their consumer base very well. They invest millions in market research to study consumer spending trends and pop culture and identifying brand influencers. They pay ad agencies hundreds of millions of dollars to keep the dream of head-to-toe designer gear alive among consumers. Sleek ads with expensive cars and beautiful models fuel the misconception that having the finer “designer” items is reflective of a better or happier life. But what happens to the aspirational market when these brands misstep?
It’s clear that these brands know their consumers well. But why do they continue to make mistakes releasing culturally insensitive ads and releasing offensive merchandise? Are these unintentional mistakes or are they truly reflective of the leadership and corporate cultures within these brands?
Because I did not interview anyone from these organizations, I do not have insight into their leaders’ thoughts and mentality, but it’s safe to make assumptions based on leadership positions within these companies. Of the five luxury brands we researched, not one diverse leader was found.
These brands were initially created for a small and exclusive clientele, which traditionally did not include many diverse communities. But times have changed, and to continue with growth strategies, these brands have begun to engage with the multicultural consumer. Diverse entertainers, athletes and business professionals are all market targets of these brands. Gucci, an Italian fashion brand, experienced 49 percent growth in 2017 and reported revenue of nearly $15 billion, that doesn’t happen by retaining and relying on the same customers that they had in the past.
The point is that with all of the cultural research, instinctiveness and marketing growth strategies it is hard to believe that H&M didn’t know that putting a black child in a sweatshirt with a monkey on the front was culturally unacceptable. Although not a luxury brand, this global company markets to a diverse consumer group with a number of stores in African countries.
How about Gucci’s new trendy blackface sweater—very racially offensive? Why would they risk boycotts and revenue loss? It has been reported that after an offensive ad was released by Dolce & Gabbana, the brand value decreased by 20 percent, which equates to hundreds of millions of dollars. Why aren’t adequate controls in place to avoid these costly mistakes?
One issue that has led to these public missteps is the lack of diversity within these brands. They have failed to create a diverse and inclusive corporate culture despite targeting and profiting from this growing and highly soughtafter multicultural market segment.
As a diversity consultant, I advise my clients constantly to consider risk avoidance to assure that they don’t make mistakes that lead to marketplace backlash. I also advise the best growth strategy for any consumer brand is to create a diverse and inclusive corporate culture by inviting diversity to the decision-making table. If there isn’t a minority at the marketing campaign ideation table, who has an active voice? If you’re not vetting your ads with diverse voices inside your company or a diversity consultant who understands the multicultural consumer before releasing them, then you’re putting your brand at great risk!
Being proactive is manageable, being reactive can destroy your brand. Some of those disgruntled consumers will never return, and those numbers can impact the company’s bottom line. The objective should be to avoid offending an entire community, particularly those who have been instrumental in supporting your 49 percent growth in revenue.
So, what can a brand do to proactively manage diversity in brands?
Changing corporate culture is critical to risk avoidance. Hiring diverse employees and engaging them in all levels from product development to marketing strategies is step one. The greatest value of diversity is diversity of thought, as well as diverse vantage points and perspectives. Today’s graduates are the most diverse in terms of race, gender, age and abilities. A brand’s recruiting and hiring strategy must include diverse hires. Employees must reflect your consumers and target market in order to grow.
Leaders must ask the question, “If all of my diverse consumers went away, how would that impact my brand’s revenue, growth and sustainability?” If the answer is “significantly,” then you should be implementing a diversity plan.
If your organization is too small to hire a large diverse group of employees, then doing business with diverse partners is another way to engage these communities, authentically, and to exhibit an inclusive culture. Diverse ad agencies, and marketing and diversity consultants can provide the brand with critical knowledge and insight, which may foster a fresh approach to a traditional system of exclusivity and status quo. Studies have shown that diverse suppliers, when given the opportunity, can bring value through creativity, innovation and cost savings.
Studies on multicultural millennial consumers show that these research-savvy consumers have expectations for brands to be inclusive and they base both their career moves and their buying decisions on companies that are inclusive.
The diverse millennial prefers to work for companies with executives who look like them, buy from companies that do business with diverse suppliers and those that support diverse communities through philanthropic initiatives. Brands that remain exclusive and fail to move to an inclusive business culture may find it more difficult to engage and retain the multicultural consumers in the future.
In response to backlash to the blackface sweater, Gucci’s press statement says, “We are fully committed to increasing diversity throughout our organization and turning this incident into a powerful learning moment for the Gucci team and beyond.”
Let’s hope they are serious about that. There is never a good reason not to implement diversity and create a diverse corporate culture! The benefits are measurable and progressive corporate leaders understand this well. Like the Nike ad instructs, “JUST DO IT!”
FOR MORE INFORMATION ON HOW TO BECOME A DIVERSE AND INCLUSIVE CORPORATE CULTURE CONTACT:
IW Consulting Group
