Redefining the Essence of Sustainable Luxury Management: The Slow Value Creation Model
This chapter aims to provide the luxury industry and academia with a value creation model, the SLOW (Sustainable Luxury for Overall Well-being) that represents different types of sustainability engagement relevant to luxury industry dynamics. The SLOW mod
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Abstract This chapter aims to provide the luxury industry and academia with a value creation model, the SLOW (Sustainable Luxury for Overall Well-being) that represents different types of sustainability engagement relevant to luxury industry dynamics. The SLOW model focuses on sustainability strategies and sustainable practices of luxury goods/services companies based on a value creation model that takes into consideration both shareholder value and social value. The vertical axis is built on the luxury goods/services company’s need to manage the business with added shareholder value while the horizontal axis is built on the company’s need to create social value, as necessitated by today’s societal and environmental challenges. The four plots that represent different types of sustainability engagement in the luxury industry are Self-indulgent Luxury, Refined Luxury, Thoughtful Luxury, and Sustainable Luxury for Overall Well-being, respectively. The SLOW value creation model is a theoretical contribution that helps understand and differentiate between four different types of sustainability engagement that lead to varying degrees of shareholder value and social value. The model sets the stage for further empirical research in the sustainable management of luxury.
Keywords Sustainable luxury Value creation Value redistribution Shareholder value Social value Sustainability engagement Self-indulgent luxury Refined luxury Thoughtful luxury Sustainable luxury for overall well-being
1 Introduction Luxury and sustainability are two words one may not particularly expect to find in the same sentence at first glance. To many people, “sustainable luxury” is a term that might best be found in the dictionary under the entry for oxymoron. The word G. Hashmi (&) Business School Lausanne, Lausanne, Switzerland e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2017 M.A. Gardetti (ed.), Sustainable Management of Luxury, Environmental Footprints and Eco-design of Products and Processes, DOI 10.1007/978-981-10-2917-2_1
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luxury derives from the Latin word “luxus” and often carries with it connotations of excess and waste, and it is associated with fashion, an industry prone to fads that change quickly. Traditionally, luxury may be defined as an inessential, desirable item that is expensive or difficult to obtain. Thus, luxury goods are defined by reference to great disparities in income or wealth that is in itself a pervasive symptom of unsustainability. On the other hand, according to the Brundtland Report, sustainable development is, by definition: “meeting the needs of the current generation without compromising the ability of future generations to meet theirs” (WCED 1987). Indeed, the two concepts seem utterly paradoxical. Luxury is argued to be the polar opposite of sustainability since it is superfluous, conspicuous, and excessive devoid of any utilitarian use (Guercini and Ranfagni 2013). These facts make the term notoriously difficult to define (Doran 2013). It’s true tha
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