Sustainable Luxury: The Effect of Corporate Social Responsibility Strategy on Luxury Consumption Motivations

Abstract

Luxury, generally associated with hedonism, excess, and ostentation, has been often considered as incompatible with Corporate Social Responsibility (CSR), which is generally associated with sobriety, moderation, and ethics. Nevertheless, increased interest in sustainability has led more and more luxury companies to integrate CSR into their marketing strategies. The present chapter helps to advance knowledge on the compatibility between luxury and sustainability by (a) describing cases of luxury companies involved in CSR activities and (b) empirically testing whether consumers might react positively to luxury companies’ CSR initiatives. Our results show that consumers’ reactions to luxury brands’ CSR initiatives depend on whether consumers mainly buy luxury goods for internal (i.e., for their individual tastes) or external (i.e., related to their willingness to show status) motivations.

Appendices

Appendix A: Experimental Study Text

Incipit. Thank you for your participation! In this survey we are interested in studying how people feel in certain situations. All your responses will remain anonymous and confidential. Please read the instructions on the screen carefully, as you will be asked to do different things throughout the survey. We would like to emphasize that there are no right or wrong answers, as we are simply interested in your opinions.

When you are ready to begin, please click >  in the bottom right to proceed.

Q1. Please indicate on a scale from 1 to 7 why you would buy a luxury product:

(1) Mainly for an “internal” motivation, related to my individual style and my taste;

(7) Mainly for an “external” motivation, related to my economic and social status

Experimental Scenario Internal CSR. SHINE is a luxury brand that has recently developed the following initiatives, an ethical and an economic one.

• Concerning the ethical initiative, the company offers to its employees a series of working benefits for them and their children.

• Concerning the economic initiative, the company has bought a software able to optimize the manufacturing process thus reducing internal production costs.

Experimental Scenario External CSR. SHINE is a luxury brand that has recently developed the following initiatives, a philanthropic and a legal one.

• Concerning the philanthropic initiative, the company has donated money to help the building of a new pediatric hospital.

• Concerning the legal initiative, the company has acquired a certification attesting the traceability of its raw materials, thus having now the opportunity to put this certification on the label of its products.

WTB. Now please indicate, on a scale from 1 to 7 (1 = Strongly disagree; 7 = Strongly agree), your level of agreement with the following statements regarding your intention to buy a jacket from the brand previously mentioned, after knowing the initiatives this brand has developed:

WTB_1. I would purchase the jacket from this brand. (1 = Strongly disagree; 7 = Strongly agree)

WTB_2. I would consider buying a jacket from this brand. (1 = Strongly disagree; 7 = Strongly agree)

WTB_3. The probability that I would consider buying a jacket from this brand is high. (1 = Strongly disagree; 7 = Strongly agree)

Man_Check. On a scale from 1 to 7 (where 1 = “Not at all” and 7 = “Very much”), to what extent do you perceive as visible and observable from outside the company (that is from people who are not part of the firm, such as consumers) the initiatives developed by the brand and previously described?

(1 = Not at all; 7 = Very much)

Incipit. Now we are interested in learning more about you. Please note that all the answers you provide will be kept anonymous.

Age What is your age?

Gender What is your gender?

Debriefing. This is the end of the study. Thank you for your participation!

The objective of this research was to identify how the presence of activities related to corporate social responsibility influences consumers’ willingness to buy luxury products.

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Appendix B: Experimental Study Results

In order to check our manipulation we conducted an analysis of variance (one-way ANOVA) on the manipulation check score, in which the type of CSR initiative (0 = internal, 1 = external) served as the independent variable. Results indicated that the manipulation was successful at 10% of significance level, meaning that on average participants recognized internal CSR initiatives scenario as less visible as those in the external CSR initiatives scenario (M_internalCSR = 4.31, SD = 1.56; M_externalCSR = 4.74, SD = 1.52; F(1,157) = 3.00; p = .08).

Then we proceeded to test our hypothesis. We dummy-coded the CSR variable (0 = internal CSR condition, 1 = external CSR condition) and employed Model 1 in the PROCESS SPSS Macro (Hayes 2017). The measure of luxury consumption orientation served as the moderator in the relationship between the type of CSR initiative and WTB. The results showed a significant and negative main effect of type of CSR initiative on WTB (b = −.92; p = .03), which suggests that internal CSR initiatives (coded as 0) increase WTB compared to external CSR activities (coded as 1). On the contrary, the effect of luxury consumption orientation on WTB was not significant (b = .001; p = .99). Of greater importance, the interaction between type of CSR initiative and consumers’ luxury consumption orientation was significant (b = .27; p = .03).

In order to more closely inspect the effect of the CSR initiative type on WTB at different levels of the moderator, we employed the Johnson-Neyman “floodlight” approach (Spiller et al. 2013) aiming at deeper exploring the moderation relationship. The results revealed a significantly negative effect of type of CSR initiative on WTB for luxury consumption orientation values lower than 1.30 (b_JN = −.58, SE = .29, 95% confidence interval: −1.15; −.001, see Fig. 6.2), but not higher values. This suggests that internal CSR initiatives significantly affect WTB, but only for consumers with low luxury consumption dispositional motivation, namely those with an internalized motivation.