Luxury Brand Diversity Programs Won’t Prevent More Culturally Insensitive Mistakes

Furniture World News Desk on 3/25/2019

Over the last several months, Burberry, Gucci and Dolce & Gabbana have been caught, tried and convicted in the court of public opinion for the crime of cultural insensitivity. These are only the most recent examples of brands guilty of a spate of similar outrages. In this 24/7 connected world, everyone is on high alert and ready to respond viscerally when brands go against the prevailing cultural winds.

Such missteps can cost brands money through boycotts and misspent product development and advertising costs. But more costly by far is the potential loss of trust and loyalty of consumers.

In no consumer category is the price for violating consumer trust so high as in the luxury sector, where the brand’s elevated value lies primarily in its reputation. If a brand tarnishes that reputation, it is in real danger of losing its “luxe.”

Among the latest perpetrators were Burberry with its hangman-noose hoodie ties evoking images of suicide and Gucci with its seemingly racist blackface “gooliwog” sweater. In response to consumer backlash, both companies promptly apologized and pulled the products out of their line.

However, these offenses are so blatant, it is hard to reconcile that with the fact that the hands of many experienced, talented and highly-trained people touched those designs through the course of their development. How could they get out the door?

Dolce & Gabbana offends an entire culture

Perhaps more subtle to some, but grossly more offensive to an entire culture was Dolce & Gabbana’s “Eating with Chopsticks” commercials. To promote its planned Shanghai fashion show, it released three ads over Weibo, the Chinese social media network, showing an Asian model trying to eat Italian food with chopsticks.

The ads were originally meant to be funny, since you can’t eat cannoli or pizza with chopsticks, but the Chinese didn’t see the humor. Quite the opposite. Immediately people called the ads disrespectful, racist and sexist. Per the usual script, the commercials were pulled within 24 hours and Domenico Dolce and Stefano Gabbana posted an apology video to Weibo.

But then news leaked that on @stefanogabbana’s Instagram account, he defended the ads to another user @michaelatranova, saying that the problem wasn’t the ad, but the people viewing them. The interchange subsequently got offensive with the “poop emojis” thrown about. Gabbana claimed his account was hacked, but nobody was buying it.

Immediately retailers and online websites pulled Dolce & Gabbana products and models and celebrities backed out of the planned fashion show, which ultimately was cancelled.

How much the company has lost over this fiasco has yet to be determined, but it is sure to be big. The Los Angeles Times reportedthat London-based Brand Finance estimates it would cut Dolce & Gabbana’s brand value by 20% from its current estimate of $937 million.

Whatever the final cost, the Chinese market is a critical one for most luxury brands. Dolce & Gabbana has many fences to mend.

Diversity problems at luxury brands

These blatant examples of cultural insensitivity hint at a deeper problem rooted in luxury brand culture. In a knowledge memo from Wharton talking specifically to the Dolce & Gabbana misstep, Carlos Torellia, business administration professor at University of Illinois, said the answer was to:

“Change your management practices to hire people who bring diversity–that really deep understanding of the culture that you cannot gain through a briefing.” But just hiring for diversity means nothing if brands don’t use that diversity effectively.

In all three cases above, it is hard to believe that no one in each company recognized the blunder and saw it for what it was or could be construed to be. For the Dolce & Gabbana ad, it stands to reason that if just one Chinese national reviewed the films beforehand, the whole debacle could have been avoided. But since the ads were recorded in Mandarin, there was obviously some cross-cultural perspective at hand.

But the culture in luxury brands doesn’t seem predisposed to listen when the message goes against the grain. All too often people in the fashion business are afraid to speak truth to power, or if someone dares, the powers that be don’t listen. That has to change. But it seems fashion culture is better at telling than listening.

A call for kinder, gentler luxury brands

Milton Pedraza, president of The Luxury Institute, calls on luxury brands not only to “listen and learn,” by talking to their diverse customers, but to “give voice to their people,” in order to avoid future errors.

“Brands needs to create a positive purpose and be able to be creative and innovative in positive ways,” he continues. “Brands that act like bullies, predators and are insensitive will be punished dearly by empowered consumers and other constituents. A culture of not just being yourself as a brand, but your empathetic, trustworthy and kind self is a requirement to succeed in business.”

Luxury brands’ next-generation customers expect no less. “Luxury brands forget that the younger generation is super-sensitive to slights and trigger-happy over social media with their displeasure,” Mickey Alam Khan, editor of Luxury Daily, warns.

“Too many such transgressions and they have lost this generation’s trust and business, because millennials and GenZ expect brands to adhere to their values.”

No publicity is bad publicity

Following the recent spate of bad choices, some observers have cynically suggested that the outrage in the press and on social media may be the intended consequences rather than the unintended ones. It led Salon’s Rachel Leah to ask in an article, “Are brands under fire for offensive designs doing it on purpose?”

In a Twitter-post response, New York Times fashion reporter Elizabeth Paton gives the brands the benefit of the doubt, but follows with the observation that luxury brands are “neurotic to a fault about controlling their public image, which is what makes these repeated design missteps all the more bizarre.”

So bizarre these missteps that it looks increasingly like publicity for the sake of publicity may be the goal. Luxury Daily’s Alam Kahn says, “It’s either their pursuit of notoriety–commit the act and say sorry later, or don’t even bother, like Benetton in the old days–or a surprising blitheness to market reaction,” he says and adds, “It looks like there is less adult supervision over visual messaging in this Instagram age.”

Danger in the street

Burberry and Gucci at least have instituted formal diversity and inclusivity programs, including training and bringing in multicultural voices. But despite luxury brands’ efforts to prevent more cultural transgressions, there is danger looming as luxury brands move further into street culture.

“Luxury brands were known for setting trends, but adoption of vagabond streetwear and casualization has flipped the model,” Alam Kahn believes. “Luxury marketers are now directly taking their cues from the mass market in their pursuit of revenue scale and so-called appeal to millennials and GenZ customers.”

As a result, further outrages against one group or another and concomitant backlashes are likely to occur with more not less frequency. “In trying to be edgy and creative in street culture, luxury brands can go too far and make mistakes,” warns Pedraza.

The late, great Karl Lagerfeld has a word of advice for brands moving too fast onto the street trend. “Trendy is the last stage before tacky.” And tacky is always tasteless and too easily bordering on vulgarity, which is the opposite of luxury, as Gabrielle “Coco” Chanel famously said.

Luxury brands must get back on the high road to define taste and class, as in classy, that crosses all cultural boundaries . While diversity and inclusivity is necessary for luxury corporate cultures, all the talk about it in relation to the consumers would be largely unnecessary if luxury brands assumed their higher calling and followed Vincent Bastien and Jean-Noël Kapferer’s prescription in their seminal book The Luxury Strategy.

Specifically, Bastien and Kapferer distinguish the luxury strategy from the fashion one. “The luxury strategy aims at creating the highest brand value and pricing power by leveraging all intangible elements of singularity- i.e. time, heritage, country of origin, craftsmanship, man-made, small series, prestigious clients,” they write.

By contrast the fashion strategy does away with all those classic luxury touchpoints in favor of selling something that is “fashionable, which is to say, a very perishable value.”

Hangman’s ties, golliwog sweaters and Asian models eating Italian food with chop sticks reflect fashion, not luxury strategies. And luxury strategies are what made these brands great in the first place and the only thing that will keep them great in the future.

Advice to Dolce & Gabbana, Burberry, Gucci and all the rest: Don’t just treat the symptoms of the diversity and inclusivity problem, as important as they are, but apply a lasting cure. Return to the higher principles and timeless standards of taste required of all brands that claim the title of luxury.

More about Pam Danziger: Pamela N. Danziger is an internationally recognized expert specializing in consumer insights for marketers targeting the affluent consumer segment. She is president of Unity Marketing, a boutique marketing consulting firm she founded in 1992 where she leads with research to provide brands with actionable insights into the minds of their most profitable customers.

She is also a founding partner in Retail Rescue, a firm that provides retailers with advice, mentoring and support in Marketing, Management, Merchandising, Operations, Service and Selling.

A prolific writers, she is the author of eight books including Shops that POP! 7 Steps to Extraordinary Retail Success, written about and for independent retailers. She is a contributor to The Robin Report and Forbes.com. Pam is frequently called on to share new insights with audiences and business leaders all over the world. Contact her at pam@unitymarketingonline.com.