The importance of diversity and inclusion in the luxury world
Serhat Ekinci
14 1 月 2020

The growing importance of diversity and inclusion:

The diversity and inclusion (D&I) agenda has never been more important or visible than it is today. Interest around the topic has risen hugely year on year around the world shown by search trend data, and it is impacting all aspects of business from marketing to recruiting. Research shows that 86% of female and 74% of male Millennials consider employers’ policies on diversity, equality and inclusion when deciding which company to work for. Considering the fact that 75% of workforce is expected to be Millennials by 2030 with such buying power, it’s no surprise that the conversation around D&I has moved beyond a talent perspective and is now integral to marketing plans worldwide. Brands such as Unilever and P&G have publicly highlighted the benefits of D&I and have demanded their agencies to follow suit.

"Diversity and inclusion are crucial to the future of the luxury industry."

The success of luxury brands is built on driving desire and a deep understanding of identity. This makes being relevant across a diverse spectrum of audiences is absolutely critical for the luxury industry. Desire is highly emotive, so it also requires luxury brands to have deep empathy and understanding for who their consumers are and how they view their identity in context. Millennials and Generation Z are the most racially and sexually diverse generations of all time. These generations have grown up in a digital world of borderless connections, which is likely to have impacted their acceptance of non-binary gender identification. In addition to this they are challenging the traditional stereotypes which were more accepted by previous generations. Four different surveys by Barkley, Futurcast, eMarketer, and the Harris poll showed that Generation Z (aged 15 to19) and Millennials (aged 20 to 35), reported that they are most receptive to ads showcasing diverse families and are more accepting of non-traditional gender roles compared to baby boomers.

"Global luxury brands need to be appreciative of local nuances."

While D&I is on the global agenda, the pace of change is not consistent globally. Therefore, one size doesn’t fit all. While there has been an increased focus on D&I the world since 2004, the discussion of D&I is just beginning in some markets such as Turkey and UAE, as seen by search trend data. The Middle East, Russia, Poland, Ukraine, Greece and Turkey are countries that have a predominant culture or religious value leading the agenda (Poland is believed to be the most religious Catholic country in Europe whilst most of the Middle East and Turkey are Muslim) which contributes to slower adoption. Therefore, whilst having a global agenda to champion D&I is important, it is crucial to take regional nuances into consideration. Failing to do so and deploying a blanket approach i.e. gay rights in UAE, Turkey vs Nordics can be detrimental to brands and could alienate audiences.

 

One of the pillars of a luxury status brand is often a strongly unified global expression, however brands will increasingly need to find ways to connect with local or traveling customers whose views and tastes on luxury can be very different to the views of a central only approach. Repeatedly we see global brands, including D&G, struggle with their localisation initiatives. This is particularly important in luxury where your brand is sacrosanct and there is no room for mistakes or missteps. For instance, MAC Cosmetics’ recent controversy of promoting makeup to Muslims during Suhoor at Ramadan is a great example of the fact that the differences even exist within communities that share a same religious identity. Where dressing up and wearing makeup to go out for Suhoor may not be uncommon for Muslims in Dubai, in Europe, it’s almost in no existence as almost all of Muslims will just eat at home in their pajamas.

 

Luxury is borderless:

In line with how our consumers view the world and the move to borderless omnichannel experiences, our communications approach for traveling consumers should also be borderless. This is particularly important for luxury brands who have a high proportion of traveling consumers. The global travel market will only continue to grow especially with the growth of the middle class in Asia and other emerging markets who we know are crucial to our business. China’s influence on the luxury sector is growing. According to Bain & Company, Chinese consumers accounted for 33% of global luxury spend in 2018 (Foresight Factory). This is particularly relevant for countries like Turkey which opened its door to Chinese outbound travelers with a relaxed visa policy. However, many brands still struggle to engage with these audiences on key touchpoints. A Chinese customer could learn about our brands from a Key Opinion Leader or influencer on the social review app ‘Little Red Book’ in Shanghai, visit our global website or Wechat account to research the collection, decide to buy when they pass by our Travel Retail stores in Istanbul, and continue to buy via Sephora when back in China. With an increasingly global customer journey where user data sits in separate eco systems and is managed by different regions, brands need to find new ways to connect these dots and continue communications in a borderless world or risk missing out.

"Diversity and inclusion requires a commitment to long term relationships and authenticity."

While many brands have started to tap into key celebratory periods for minorities i.e. Eid, Pride due to commercial opportunities they bring, the conversation needs to move away from once a year, one-off campaigns to an ongoing conversation with these audiences across the year. After all, these audiences don’t just celebrate Eid or Pride and ‘hibernate’ for the rest of the year. This is particularly important because the consumers, especially those from diverse backgrounds, recognize when brands are not behaving authentically. We should therefore consider how we continue to engage with these communities throughout the year or support their communities and charities authentically. To successfully embrace diversity and inclusion in communications we recommend being authentic, acknowledging cultural nuances and developing borderless strategies for traveling audiences. Winning every segment of D&I is impossible, therefore by leaning into areas that reflect a DNA that are relevant to the audience. This should be done authentically and with longevity, by supporting communities with genuine intentions, the commercials will follow. Consistency is also important, however being sure to understand market context and tailor our communications accordingly is vital. Finally, brands that successfully create bespoke strategies for travelling consumers, whilst executing integrated approaches to communicate seamlessly across markets will win in the future.

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