Examining the mediating role of consumer desire for luxury: Can perceived sustainability and natural rarity evoke willingness to pay more?

Abstract

The purpose of this study is to investigate how perceived sustainability and perceived natural rarity influence willingness to pay more for luxury. The mediating role of consumer desire for luxury was also examined. Results suggest that perceived natural rarity and perceived sustainability are positively related but distinct constructs. Perceived natural rarity was found to have a significant and positive influence on consumers’ willingness to pay more, mediated by their desire for luxury. Similarly, consumer desire for luxury was also found to be a significant mediator for the relationship between perceived sustainability and willingness to pay more among consumers. This is the first paper to empirically test the relationship between perceived natural rarity and perceived sustainability. The findings provide innovative insights into the use of sustainable yet luxurious raw materials in the luxury industry, which can have significant implications for evoking consumer desires and purchasing intentions.

Keywords:

• Sustainability in luxury
• consumer desire for luxury
• perceived rarity
• consumers’ willingness to pay more

Introduction

Traditionally, luxury has been associated with status, wealth, rarity, and power, and has been linked to satisfying non-essential consumer desires (Phau and Prendergast 2000; Tynan, McKechnie, and Chhuon 2010). Luxury goods are perceived as rare, sophisticated pieces of workmanship that use premium raw materials, superior designs, and detailed craftsmanship (Brun and Castelli 2013; Phau 2003).

In recent years, the global luxury market has witnessed an ever-growing demand for luxury goods, represented by the emergence of younger generations and middle-class consumers (Agapie and SÎrbu 2020). The ease of Covid restrictions in Asian market and the financial recovering of Europe also contribute positively to the growth of luxury market (D’Arpizio and Levato 2023). In 2022, the personal luxury sector has achieved a market value of €345 billion, with an estimation of further 9–11% growth in 2023 (D’Arpizio and Levato 2023). Top performing categories, including watches and jewelry, demonstrate promising market growth, contributing to approximately €12 billion market value in 2022 (D’Arpizio and Levato 2023).

Contemporary consumers’ consumption for luxury is found to be influenced by multiple factors such as the social media communications (e.g., Kong, Witmaier, and Ko 2021), perceived value for luxury (e.g., Kautish and Sharma 2018; Jain 2020) and brands’ awareness of sustainability practices (e.g., Kunz, May, and Schmidt 2020). In particular, sustainable luxury is recognized as an emerging element of “new luxury”, emphasizing a business’s efforts in reducing environmental impact in manufacturing, retailing and disposal processes (Kunz, May, and Schmidt 2020). From consumers’ perspective, it was found that millennial consumers are increasingly conscious of sustainability issues in luxury, and they are willing to pay extra for environmentally sustainable products (Lim et al. 2023).

With increasing public concerns about current environmental issues, luxury brands have faced criticism for unethical practices including excessive consumption of natural resources and issues related to animal abuse (Conti, 2018; Rolling et al. 2021; Rovai and Phau 2003). Brands like Burberry, Hermès, and Tiffany Co. have come under scrutiny for unsustainable raw material sourcing (Chan et al. 2020), while Gucci, Dior, and Saint Laurent have been accused of frequently using leather and fur from rare animals (Chan et al. 2020). These unsustainable behaviors could diminish consumer desire and harm brand image, making it a more pressing concern in the luxury sector compared to other industries (Friedman 2010; Hashmi 2017). Consequently, luxury businesses should carefully consider the impact of increasing consumer awareness of environmental issues, particularly in the selection of raw materials and natural resources for their products (Hanson-Rasmussen and Lauver 2018; Teah, Sung, and Phau 2023).

The adoption of naturally rare and nonrenewable materials such as exotic animal skins has received much attention and criticism from social media and international press. The growing public interest in sustainability also creates a dilemma for luxury businesses: finding a balance between implementing sustainable practices while maintaining the rarity of natural materials to preserve the luxury allure for consumers (Kapferer and Michaut-Denizeau 2014; Phau 2003).

In recent years, luxury brands such as Yves Saint Laurent and Louis Vuitton have begun transforming their practices by using eco-friendly raw materials like organic cotton, ethically produced silk, and natural fibers, while Prada and Burberry announced their commitment to replacing the use of endangered natural resources like animal leather and fur, starting in 2020 (Prisco 2019). Some luxury businesses have introduced eco-friendly limited editions using superior raw materials to embody both sustainability and natural rarity (e.g., Maman Larraufie and Lui 2018; Dekhili, Achabou, and Alharbi 2019).

There have also been investigations into the compatibility between the concepts of sustainability and luxury rarity, but with inconsistencies in findings. Campos Franco, Hussain, and McColl (2019) and Nash, Ginger, and Cartier (2016) found that the two concepts complement each other as they both symbolize product durability and provide higher value. In contrast, others believe luxury rarity and sustainability represent different universes (e.g., Dekhili and Achabou 2016; Kapferer and Michaut 2015). Particularly, natural rarity has been found to be positively associated with luxury brand desirability by enhancing perceptions of quality and uniqueness (Parguel, Delécolle, and Valette-Florence 2016; Wang, Sung, and Phau 2021), while sustainability information appears to negatively influence the perceived quality of luxury products (Dekhili and Achabou 2016; Dekhili, Achabou, and Alharbi 2019).

Moreover, contradictory results have emerged regarding the influence of natural rarity and sustainability on eliciting luxury desires and actual purchasing intentions, such as willingness to pay more for luxury. Some authors suggest that naturally rare and luxurious materials initiate consumer desires and justify the premium price of luxury products (Dubois, Jung, and Ordabayeva 2021; Kapferer and Valette-Florence 2021).

Other authors assert that rarity and expensiveness can no longer define luxury (Mundel, Huddleston, and Vodermeier 2017; Thomsen et al. 2020). For many consumers, "unconventional luxury" involves ecological factors and sustainable practices, evoking desires (e.g., enjoying clean air and water, experiencing a moment of silence in nature; Mundel, Huddleston, and Vodermeier 2017). Consumer desire for luxury is an important contributor to the willingness to pay a premium (Kapferer and Michaut 2014, Kapferer and Valette-Florence 2021). Hence, the potential influences of natural rarity and sustainability on consumer desires also open a pathway for the current study to understand consumers’ willingness to pay more for luxury. The above comparison between natural rarity and sustainability raises theoretical questions: what continues to motivate consumers to pay more for luxury products? Can natural rarity and sustainability coexist in the luxury realm?

As such, the aims of this study are to understand whether (1) perceived natural rarity and perceived sustainability are related concepts in luxury and (2) consumer desire for luxury could have a positive mediating effect on the relationships between perceived natural rarity, perceived sustainability, and willingness to pay more.

Relevant literature and hypotheses development

Relationship between natural rarity and sustainability in luxury

The term ‘natural rarity’ is used to indicate the limited availability of goods due to shortages of natural and raw materials in production (Catry 2003; Kapferer and Valette-Florence 2016). Traditionally, luxuries were often handmade and are perceived as rare pieces of craftsmanship using only high-quality raw materials, with sophisticated design (Kapferer and Valette-Florence 2018). Rarity messages are more appealing to luxury customers because they address individuals’ need for uniqueness, which can stimulate a desire to be one of the happy few to own it (Aggarwal, Jun, and Huh 2011; Goldsmith, Griskevicius, and Hamilton 2020). Maintaining rarity is also viewed as a critical success factor for luxury businesses. Luxury products containing precious materials are highly sought by luxury consumers as they symbolize authenticity, craftsmanship, and status (Brun and Castelli 2013; Goldsmith, Griskevicius, and Hamilton 2020).

The concept of sustainability was initially proposed in the 1970s to combat various social and environmental issues such as climate change, energy shortage, deterioration of the ecological environment, and exploitation of natural resources (Guercini and Ranfagni 2013). Sustainable manufacturing practices aim at minimizing environmental damage by using the least natural resources while optimizing the product efficacy of the company (Nordin, Ashari, and Rajemi 2014).

Luxury and sustainability seem to differ in many aspects. Luxury symbolizes excessiveness, superficiality, and the pursuit of personal pleasure (Dean 2018; Tynan, McKechnie, and Hartley 2014), while sustainability is often associated with moderation, altruism, and collectivism (Naderi and Strutton 2015; Waris, Dad, and Hameed 2021). Furthermore, sustainability practices concern social justice and the adequate use of natural resources, while luxury businesses are often criticized for raising social inequalities and depleting rare and natural resources. Finally, the luxury sector is also accused of animal cruelty issues such as mistreatment of animals to obtain skins and furs. Hence, the production of luxurious and prestigious products is also contrary to the idea of animal welfare within the realm of sustainability (Dekhili and Achabou 2016).

A more recent debate on luxury sustainability considers the compatibility between sustainability and natural rarity (e.g., Dekhili, Achabou, and Alharbi 2019; Campos Franco, Hussain, and McColl, 2019). Some authors believe that sustainability and luxury rarity share important characteristics such as durability, reflecting the selection of natural resources that would last throughout time and thus decrease product disposal rate (Campos Franco, Hussain, and McColl 2019; Kunz, May, and Schmidt 2020). It is believed that luxury brands are able to benefit the environment through encouraging moderate consumption and promoting the reasonable use of natural resources in production (Hashmi et al. 2017). The promotion of using sustainable but naturally rare materials enhances the durability of luxury goods, which is fundamental to preserve brand prestige and esthetic craftsmanship (De Angelis, Amatulli, and Zaretti 2020).

The second characteristic is exclusivity, which reflects the carefully chosen materials used in production. For example, compared with cotton, alternative natural fabrics such as lyocell, flax, and hemp are not only perceived to be rarer and more luxurious, but they can also be bio-based and biodegradable, significantly reducing adverse environmental impacts (Donato, Buonomo, and Angelis 2020). Hence, there is potential for both natural rarity and sustainability to coexist in luxury production through the ethical use of naturally rare resources that are high in durability and exclusivity (Cervellon 2013; Hennigs et al. 2013). Based on the preceding discussion, the following hypothesis is presented:

H1: Perceived sustainability and perceived natural rarity are distinct but positively correlated constructs

Consumer desire for luxury

Consumer desire for luxury refers to personal incentives surrounding luxury consumption as to whether a product is worth getting or having (Hennigs et al. 2016). Consumers’ enduring desire for luxury largely derives from the pursuit of value and status, that is, ‘respect, admiration, and voluntary deference afforded by others’ (Anderson et al. 2015).

The concept of desire in luxury goes far beyond limited supply and perceived rarity; it recognizes the importance of human involvement and establishing a close relationship with customers (Kapferer and Valette-Florence 2018). In comparison to everyday consumption, consumers’ desire for luxury is associated with pursuing “pleasure and indulgence of the senses through objects or experiences that are more ostentatious than necessary” (Kapferer and Valette-Florence 2016; Okonkwo 2016).

Consumer desire for luxury is a meaningful construct because it taps into the subjectivity of luxury, that is, luxury should be successfully perceived and recognized by consumers based on the functionality, price and benefits (Hudders, Pandelaere, and Vyncke 2013; Banister, Roper, and Potavanich 2020). Research has found price is a barrier to entry that can build desire for luxury products (Kapferer and Valette-Florence 2021). Further, consumer desire for superior quality has a positive influence on luxury perceptions (Parguel, Delécolle, and Valette-Florence 2016; Wang, Sung, and Phau 2021) and their willingness to pay premium for luxury products (Kapferer and Valette-Florence 2021). Brand desirability also moderates the association between consumers’ brand commitment and brand equity, which further confirms the important role of desires in luxury purchasing (Kapferer and Valette-Florence 2018; Kim et al. 2012). Following an integrative understanding of luxury desires, the question arises of how natural rarity and sustainability affect consumer desire for luxury, which may further influence on consumers’ purchasing intentions.

Willingness to pay more for luxury

Consumers’ willingness to pay more (WTPM) reflects consumers’ actual purchasing intentions to make the necessary (monetary) sacrifice to acquire certain products or services (Koschate-Fischer, Diamantopoulos, and Oldenkotte 2012). A consumer’s willingness to pay a higher price is found to be a strong indicator of overall perceived value (Kiatkawsin and Han 2019) and brand loyalty (Naeini, Azali, and Tamaddoni 2015). Consumers’ WTPM is also a significant predictor for brand purchasing behavior (Siew, Minor, and Felix 2018).

Hudders, Pandelaere, and Vyncke (2013) and Lee et al. (2015) suggest that product uniqueness, brand value and perceived quality are important and direct antecedents of a consumer’s WTPM for a brand. In particular, researchers support the view that unique brand characteristics influence both consumers’ brand preferences and their willingness to pay a higher price (Siew, Minor, and Felix 2018; Sandra and Alessandro 2021). WTPM is also an important indicator for brand love, brand credibility and brand luxuriousness in luxury consumers (Dwivedi, Nayeem, and Murshed 2018).

According to equity theory, consumers seek to establish an equitable deal, and thus they attempt to adjust level of input in relation to the favorable outcomes and overall value they expect to receive (e.g., perceived rarity, perceived luxuriousness; Naeini, Azali, and Tamaddoni 2015). Specifically, luxury purchasers show more positive emotions and desires to pay for a premium price than those who have never purchased luxury brands for the benefits of status (Kim, Park, and Dubois 2018), rarity and exclusivity (Kim 2018).

Although research findings are still very limited, recent studies have shown that consumers’ attitudes, values and norms for sustainability can function as significant contributors to sustainable luxury purchase behaviors (e.g., Athwal et al. 2019; Eastman and Iyer 2021). Other factors such as consumers’ self-expression of sustainable perceptions may also influence luxury consumptions (Dekhili, Achabou, and Alharbi 2019). Sustainable practices may enhance consumers’ perceived value through the increased positive perception on durability and exclusivity, and may subsequently exert an influence on willingness to pay more for luxury brands (Maman Larraufie and Lui 2018; Sandra and Alessandro 2021).

Underlying theory

Commodity theory

According to the Commodity Theory, the value of a commodity amplifies when availability of products is limited (Brock 1968). The Commodity Theory was first proposed by Brock (1968) to explain the presence of scarcity principle. That is, consumers have an increased interest and preference for possessing somethings that is rare and hard to obtain. Consumers often use scarcity signals as heuristics cues to simplify their assessment of a product’s quality (Gierl and Huettl 2010; Stock and Balachander 2005), and price information (Suri, Kohli, and Monroe 2007).

In luxury literature, the commodity theory and scarcity principle are thought to be closely related to both the concepts of rarity and exclusivity, which suggested that unavailable and inaccessible products or services generally have more value than common goods (Cialdini 2009), and it is often used by marketers to increase the subjective desirability of products (Jung and Kellaris 2004). The strategies of limiting production quantity either due to natural rarity or virtual rarity are found in various product categories such as automobiles, collectables such as coins, watches, and jewelry to trigger perceived luxuriousness among consumers (Amaldoss and Jain 2005; Jang et al. 2015).

In particular, scarce messages addressing “limited quantities” are more appealing to customers because they evoke individuals’ sense of urgency to purchase the rare products while increasing the product’s value perceptions and perceived uniqueness (Aggarwal, Jun, and Huh 2011; Eisend 2008). In this situation, the decrease in product availability would increase consumers’ perceived value and desirability of the product (Aggarwal, Jun, and Huh 2011; Lynn 1991).

Social signalling theory

Luxury means different things to different people and consumers are motivated to buy luxury goods for different reasons. According to social signaling theory (Berger 2017; Nelissen and Meijer 2011), some consumers buying luxury because of its rare and exclusive properties to symbolize wealth, power and high social status (Corneo and Jeanne 1997; Vigneron and Johnson 2004). Social signaling theory suggested that brand prestige and expensiveness of luxury goods can be regarded as social cues to indicate status, identity and social stratification (Vigneron and Johnson 2004). For example, the upper classes “decorated” themselves with jewelry and clothes made from rare and exotic material to signal uniqueness and status (Amaldoss and Jain 2005). Conspicuous consumptions of rare or uncommon goods are used as means to enhance unique self-image among others, and signally effect provides an essential explanation for the main motivations of luxury purchases (Berger 2017; Nelissen and Meijer 2011). Since an individual’s social status is invisible in many cases, status signaling brands can be used as an indicator of one’s social standing over others (Ordabayeva and Chandon 2011). Consumers may infer the social status of other people from the prices of the products these people own (Leigh and Gabel 1992; Sengupta, Dahl, and Gorn 2002).

In luxury consumption, social signaling theory provides an explanation for consumers’ desire to signal high social status in luxury consumption (Berger 2017; Nelissen and Meijer 2011). Individuals with high needs for social approval and social status typically perceive higher-priced commodities as means to communicate social image and brand prestige to others (Jin, Park, and Yoo 2017).

Role of natural rarity on desire for luxury and willingness to pay more

Signaling theory captures the underlying mechanism on how rarity effect evokes desires and willingness to pay for luxury (Gierl and Huettl 2010). Specifically, product rarity signals brand commitment of producing limited product quantities, which enhances quality and value perceptions to potential consumers (Goldsmith, Griskevicius, and Hamilton 2020; Gupta and Gentry 2019). Rarity messages addressing naturally scarce aspect of luxury goods appeal to individuals’ desire for uniqueness, which can stimulate consumers’ desire to own it due to limited supply (Aggarwal, Jun, and Huh 2011; Hamilton et al. 2019). Based on the proceeding discussion, the following hypothesis is presented:

H₂: Perceived natural rarity has a positive and significant influence on consumer desire for luxury

The use of naturally rare fibers particularly animal hair added specific characteristics such as warmth, suppleness, fineness, and finally mystique (Muthu and Gardetti 2016). The limited production and unique characteristics of using naturally rare materials and exotic fibers also stimulates positive luxury perceptions among consumers, which may subsequently contribute to purchase intentions (Kapferer and Valette-Florence 2018; Wang, Sung, and Phau 2021). The ultimate goal is to maintain brand desirability and perceived luxuriousness, as well as ensuring their products still holds high levels of dream value and premium pricing (Riot, Chamaret, and Rigaud 2013; Kapferer and Valette-Florence 2016). Lastly, researchers support the view that higher perceived rarity leads to higher levels of brand desires, which subsequently contribute to both consumer preferences and the willingness to pay a higher price for the brand (Kim 2018; Park, Eom, and Spence 2022). Specifically, consumers from collectivist culture display greater affections toward the use of valuable and luxurious materials to symbolize uniqueness, social identity and status (Chan, To, and Chu 2015).

While the use of luxury and naturally scarce material create inevitable attractions to luxury consumers, the current trend of sustainable luxury consumption has placed a great challenge for the traditional implementation of natural rarity strategies in luxury. Further, in the recent years, many luxury manufacturers have outsourced their productions to low labour-cost countries, such as India and China (Canham and Hamilton 2013). In these manufacturing facilities, the brands are produced in large quantities and they are no longer relying on naturally rare resources to achieve promising financial outcomes. To enhance rarity perceptions and brand desires, international managers employ virtual rarity tactics such as limited-editions and exclusive brand events (Kapferer and Valette-Florence 2018), focusing on building social influence and brand popularity among peer groups of consumers from collectivist culture such as China, Russia, Thailand and Turkey (Singh, Shukla, and Schlegelmilch 2022). Hence, it is important to understand the role of natural rarity on consumer desires and willingness to pay when mass production and affordable luxury are taken place. As such, there is a need for current research to explore how contemporary consumers perceive natural rarity in luxury. Based on the proceeding discussion, the following hypothesis is presented:

H₃: Perceived natural rarity has a positive and significant influence on consumers’ willingness to pay more.

H₄: The relationship between perceived natural rarity and willingness to pay more is positively mediated by consumer desire for luxury.

Role of perceived sustainability on desire for luxury and willingness to pay more

Product sustainability is not traditionally treated as a determinant for luxury desire, nevertheless it affects many sectors including luxury businesses (Kapferer and Valette-Florence 2021). In the contemporary marketplace, consumers typically look beyond traditional luxury offerings when assessing the benefits of luxury. In particular, luxury consumers are displaying great interest in business sustainable practices through social media report, which subsequently influence their thoughts on brand image, consumer desire and purchase intentions for luxury goods (Dubois, Jung, and Ordabayeva 2021). Contemporary consumers have demonstrated increasingly complex luxury consumption behavior considering the environmental costs and sustainable framing of luxury goods (Sun, Bellezza, and Paharia 2021).

Sustainable strategies contemplate the preservation of the environment (Pawłowski 2008) and are focus on innovation, productivity and efficient use of resources. Sustainable business behaviors include implementing innovative strategies to minimize reliance on natural resources, using alternative energy sources to reduce waste and pollutants, and encouraging eco-friendly behaviors such as recycling and erecting barriers to contamination (Pullman, Maloni, and Carter 2009; Sharma 2021).

Sustainable supply chains and environmental preservation drive luxury firms to redefine their sourcing, manufacturing and distribution processes. Sustainable and ethical practices also open new opportunities for luxury firms to foster productivity, innovation and increase brand value, which ultimately ensure a luxury brand’s long-term success (De Angelis, Adıgüzel, and Amatulli 2017; Kapferer and Bastien 2012). Specifically, the promotion of using sustainable materials enhance the durability of luxury goods, which is fundamental to preserve brand prestige and esthetic craftsmanship (Carcano 2013).

Contemporary consumers demonstrate more complex and sophisticated motivations for luxury purchases and luxury desires. According to the Signaling Theory (Griskevicius, Tybur, and Van den Bergh 2010), luxury consumers may choose to take sustainability actions for reasons other than concerns for environmental impact. Sustainability initiatives can also be triggered by factors such as pursuit for status, feelings of exclusivity and achievement, as well as the pride of engaging in prosocial behaviors (Kapferer and Michaut-Denizeau 2014; Osburg et al. 2021). For instance, luxury consumers purchasing expensive items expect more than rarity; they also have a desire for exclusivity (Kim 2018; Yeoman and McMahon-Beattie 2006). Enjoyment of exclusivity for sustainable product is an important emotional factor for luxury desire as it reflect consumers’ feelings that they themselves are unique (Kim 2018). Based on the proceeding discussion, the following hypothesis is presented:

H₅: Perceived sustainability has a positive and significant influence on consumer desire for luxury

Given the ever-growing environmental and societal pressure, the integration of sustainable and ethical practices has not only become essential for luxury industry, it is also increasingly demanded and valued by contemporary consumers (e.g., Amatulli et al. 2018; Lim et al. 2023). Previous studies also propose that consumers are willing to pay premium for sustainable luxury products that fulfill their dreams for luxury brand prestige and social power (Dekhili and Achabou 2016; Osburg et al. 2021).

In marketing practice, luxury brands (such as Gucci and Hermès) have focused on developing productive processes with low environmental impact together with the use of recycling and of sustainable materials (e.g., Gucci’s eco-friendly packaging). Further, the adoption of sustainable and rare materials (e.g., vegetable leathers; bio-textiles) also add on the uniqueness of its constitutive resources, and thus produce positive influence on luxury value (Sestino, Amatulli, and De Angelis 2021). Alternative natural fabrics such as lyocell, flax and hemp are not only perceived to be rarer and more luxurious, but they produce less environmental damage as the raw materials (e.g., wood) can grow without harmful chemicals such as pesticides and fertilizers (Dekhili and Achabou 2016).

Luxury firms incorporating sustainable elements reinforce the perception of durability of natural perceived product quality, which affect consumers’ purchase motivation and thus affects consumer’s purchasing decisions (Sandra and Alessandro 2021; Tan et al. 2022). Sustainable practice also enhances brand value and brand awareness, contributing to brand desires, which further contribute to consumer’s willingness to pay premium prices (Goebel et al. 2018). Hence, it is essential to recognize sustainability as a distinctive element of corporate brand identity (Guercini and Ranfagni 2013), as well as understanding how it affects consumer desires and willingness to pay for luxury. Based on the proceeding discussion, the following hypotheses are presented:

H_6: Perceived sustainability has a positive and significant influence on consumers’ willingness to pay more.

H₇: The relationship between perceived sustainability and willingness to pay more is positively mediated by consumer desire for luxury.

These relationships are presented in the Conceptual Model in Figure 1.

Figure 1. Research model.

Methodology

Sample and data collection

This study focuses on consumers who were born in Australia or live in Australia for at least five years. A total of 487 participants were recruited to complete a self-administered survey through online consumer panel Qualtrics. Before proceeding with the questionnaire, participants were asked to respond to the screening question “What is your country of birth?” Only Australian born participants or individuals selected “living in Australia for five or more years” were included in further analysis. Additionally, attention check question “If you pay attention, please select strongly agree” was also included to identity unmotivated respondents. 46 participants were excluded due to unsuccessful attention check or missing data, leaving 441 participants for further analysis. The sample was comprised of fifty-four percent female and forty-six percent male, with a mean age of 46 years (SD = 16.75).

Stimuli

The signature wallet from British luxury brand Ettinger was selected as the product stimulus to test the model. Luxury wallet from less well-known luxury brand was chosen for its relevance and capacity to evoke both sustainability and natural rarity while minimizing the influence of brand familiarity.

To assess content and face validity, two focus group interviews (n = 12) were conducted to assess the appropriateness of product categories. Participants were recruited through a snowball method involving individuals with relevant industry experiences and knowledge for luxury marketing.

The focus group interviews consisted of a general discussion of the current status of rarity and sustainability in luxury purchases, followed by the consideration of definitions and examples of natural rarity and perceived sustainability in luxury industry. Next, research design and research purposes were revealed to guide the selection of appropriate stimuli for this study.

For each group interview, participants were provided with a list of 8 luxury brands and product categories for them to identify the best representations of stimuli based on the scope of this study. Luxury wallet was selected based on the discussion of relevance to the current study. Focus group interview questions and brand descriptions are listed in Appendix A.

Product stimuli and their descriptions were based on real releases and marketing campaigns administered by the luxury brand. Stimuli descriptions for rarity emphasized on limited natural resources (e.g., the use of naturally rare cork oak). Perceived sustainability is elicited by using statement stressing the use of sustainable materials in production process. The whole questionnaire took approximately 25 to 30 min to complete. Stimuli descriptions are presented in Appendix B.

Pilot study

A pretest (73 student sample) was conducted to assess the appropriateness of the selected brands and scale items.

The student sample completed the online pretest questionnaires through the Qualtrics platform and received course credit for their completion. Stimuli descriptions and scale items are provided in Appendices B and C. The purpose of the pretest was to examine the reliability of adapted scale items. All scales have shown appropriate levels of reliability before proceeding with further testing.

Survey instrument

The survey instrument incorporated three existing scales to measure Perceived Sustainability (PSUS), Consumer desire for Luxury (DES) and Willingness to Pay More (WTP). Scale items were adapted individually to ensure they suit the context of selected product category. Perceived sustainability was measured by adapting a five-item scale from Hamari, Sjöklint, and Ukkonen (2016). Consumer desire for luxury was measured by adapting the eight-item brand desirability scale from Kapferer and Valette-Florence (2016). Willingness to pay more scale adopted three items from Franke and Schreier (2008) examining consumers’ purchase intentions for the luxury good. In additional, perceived natural rarity (PNR) was assessed by developing a three-item scale in accordance to the definition of natural rarity proposed by Catry (2003) and Kapferer and Valette-Florence (2016).

All scales were reviewed to ensure acceptable levels of reliability as indicated in the original studies. Scale items were measured on 7-point Likert scales ranging from 1 (Strongly Disagree) to 7 (Strongly Agree). At the end of the survey, demographic information was recorded for each respondent. Scale items used in this study are summarized in Appendix B.

Results and analysis

Preliminary results

Descriptive statistics including means, standard deviations and inter-correlations were presented in Table 1. All main measures including PSUS, PNR, DES and WTP have shown positive and significant correlations.

Table 1. Means, standard deviations, and intercorrelations among study measures.

Measures	PNR	PSUS	DES	WTP	M	SD
PNR	–				4.717	1.368
PSUS	0.557***	–			4.117	1.455
DES	0.421***	0.622***	—		3.689	1.780
WTP	0.352***	0.609***	0.657***	—	3.312	1.732

Note. PNR: perceived natural rarity measure; PSUS: perceived sustainability measure; DES: consumer desire measure; WTP: willingness to pay more measure.

*** p<.001.

Reliability check

Prior to conducting factor analysis, each scale was checked for reliability level. All four scales demonstrated excellent levels of Cronbach’s Alpha: Perceived Sustainability (PSUS; α = 0.968), Perceived Natural Rarity (PNR; α = 0.921), Consumer Desire for Luxury (DES; α = 0.985), and Willingness to Pay More (WTP; α = 0.955), indicating acceptable levels of consistencies and internal reliability.

Confirmatory factor analysis

A confirmatory factor analysis (CFA) using maximum likelihood estimations have been conducted to assess model fit, as well as further verifying the dimensionalities and relationships among PSUS, PNR, DES and WTP. Results of CFA indicated that items loaded substantively on their corresponding factor with no clear evidence of significant cross-loadings in our sample, supporting H1. The test of measurement model produced adequate model fit (Vandenberg and Lance 2000; Kline 2011): χ²(140)=369.133, p=.000, RMSEA = 0.061, GFI = 0.920, AGFI = 0.892, TLI = 0.978 and CFI = 0.982.

Convergent validity is indicated by AVE all above 0.50 (Fornell and Larcker 1981). The discriminant validity was examined by relating the square root of each construct’s average variance extracted (AVE) with the off-diagonal correlations. The AVE values were above 0.8, much higher than Fornell and Larcker (1981) recommendations. The composite reliability and internal consistency have exceeded the threshold value of 0.7, which are deemed satisfactory. Table 2 presents the results of validity of the measures.

Table 2. Assess the validities and collinearity issues of variables.

Variables	CR	AVE	PNR	PSUS	DES	WTP	DV	VIF
Perceived natural rarity (PNR)	0.92	0.73	–				0.85	2.07
Perceived sustainability (PSUS)	0.78	0.66	0.56	–			0.81	2.23
Consumer desire for luxury (DES)	0.77	0.62	0.42	0.62	–		0.79	2.17
Willingness to pay more (WTP)	0.95	0.96	0.35	0.61	0.66	–	0.92	2.56

Note: AVE: average variance extracted; CR: construct reliability; DV: discriminant validity shown by square root of variance shared. Off diagonal factors are correlations.

In addition, collinearity issues were also considered by using the Variance Inflation Factor (VIF) for each construct. According to Shrestha (2020), VIF values between 1 and 5 indicate the absence of problematic multicollinearity. As shown in Table 2, VIF values of constructs were all within the suggested range.

Common method bias

In order to check the presence of common method variance (CMV), Harman’ single-factor test was adopted in this research. Results showed that the first factor (PSUS) accounted for 44% of the variance, which is below the threshold of 50%, suggesting the absence of significant issue for CMV.

Further, common method bias was also checked in accordance with Kock and Villadsen (2015)’s guideline on VIF. Any VIF values above 3.3 may suggest the presence of common method bias. The VIF values in this research ranges from 2.17 to 2.56, indicating the appropriateness of data are adequate for further analysis.

Hypothesis testing

Structural equation modeling (SEM) using AMOS version 23 were used to test the mediation effects. Hypotheses were tested for both direct and indirect effects of perceived sustainability and perceived natural rarity on willingness to pay more in the presence of consumer desire for luxury. According to Preacher and Hayes (2008) findings, a significant mediation effect is present when there is a statistically significant indirect effect of the independent variable on the dependent variable through the mediator (p < 0.05).

Accordingly, the results in Table 3 indicated that PNR had a significant and direct effect on DES (β = 0.688, SE = 0.055, p < 0.01), supporting H2. PNR had a significant but negative direct effect on WTP (β= −0.066, SE = 0.037, p < 0.01), rejecting H3. Further, PNR also had a significant indirect effect on WTP through DES (β =0.085, SE = 0.022, p < 0.01). This indicated the significant mediating role of DES in the association between PNR and WTP; hence H4 was supported.

Table 3. Results of the mediation analysis.

Path relationships	Path coefficient (β)	SE
Direct effects
PSUS → WTP	0.155**	0.040
PNR → WTP	−0.066**	0.037
Indirect effects
PSUS →DES →WTP	0.443**	0.023
PNR →DES →WTP	0.085**	0.022

Notes.

** p < 0.01.

Lastly, it was found that PSUS had a significant and direct effect on DES (β= 0.562, SE = 0.040, p < 0.01), supporting H5. PSUS also had a significant and direct effect on WTP (β = 0.155, SE = 0.055, p < 0.01), supporting H6. Further, PSUS also has a significant indirect effect on WTP through DES (β= 0.443, SE = 0.023, p < 0.01). This indicates the significant mediating role of DES in the association between PSUS and WTP; hence H7 was supported.

Discussion and implications

Relationship between perceived natural rarity and perceived sustainability

Firstly, our results clearly demonstrates that perceived natural rarity and perceived sustainability are distinct but positively correlated constructs. It provides an insight to further understand the converging meanings of rarity and sustainability and how to utilize them in luxury practice. This finding also untightens the current paradox of how to keep a balance between sustainability practice and natural rarity in luxury practice (Dekhili, Achabou, and Alharbi 2019; Kapferer and Valette-Florence 2021). It should be noted that perceived natural rarity and sustainability are not traditionally considered as compatible concepts in luxury literature. Sustainable strategies are considered about the efficient use of resources and the preservation of the environment (Guercini and Ranfagni 2013). The main goal is to encourage sustainable business behaviors such as reducing waste and pollutants in production processes and minimizing reliance on natural resources (Pullman, Maloni, and Carter 2009).

On the other hand, the use of naturally rare materials (e.g., luxury animal hairs) seem to pose great threat to sustainability as it can lead to animal killing and mistreatment which aggravate the extinction of hair-producing animals (Gardetti and Muthu 2016). The use of naturally rare animal furs and leather may also lead to poaching and illegal fiber trading (Joy et al. 2012; Gardetti and Muthu 2016). Our finding demonstrated positive relationship between the two, which opens the potential benefits of combining natural rarity and sustainability in luxury marketing. Specifically, the promotion of using sustainable but naturally rare materials is found to enhance the durability of luxury goods, which is fundamental to preserve brand prestige and esthetic craftsmanship (Kapferer and Valette-Florence 2021).

Hence, it is important for luxury firms to incorporate sustainable elements and natural rarity, as well as recognizing sustainability as a distinctive element of corporate brand identity and brand desirability (Guercini and Ranfagni 2013). Taking advantage of a new business opportunity, it is therefore critical to investigate the converging meanings of luxury rarity and sustainability in luxury brands.

Role of perceived natural rarity in luxury

The current findings suggested that perceived natural rarity still plays an important role in triggering consumers’ willingness to pay more, through the mediating effect of consumer desire for luxury. In luxury consumptions, it was found that people would place more value on rare products with superior materials and esthetic craftsmanship, as it demonstrates self-distinctiveness in a social context that reinforce social status and a positive self-image (Tak et al. 2020). Kapferer and Valette-Florence (2016) also demonstrated the effectiveness of using rarity strategies to enhance luxury perceptions and evoke brand desirability among consumers.

Results are also consistent with recent studies conducted by Wang, Sung, and Phau (2021) demonstrate the positive influence of natural rarity on both social value and emotional value, indicating the potential usefulness of implementing natural rarity strategies to evoke consumer desire and luxury purchase intentions. It is also worth noticing that natural rarity adds unique aspect to craftsmanship and esthetics, conveying both symbolic and social value (Caniato et al. 2009; Hudders, Pandelaere, and Vyncke 2013), which may contribute to consumers’ willingness to pay more for luxury products.

Role of perceived sustainability in luxury

A positive mediating effect of consumer desire for luxury was found on the relationship between sustainability and consumers’ willingness to pay more. The recent incorporation of sustainability to luxury is a source of debate. Luxury and sustainability seem to differ in many aspects. Luxury symbolizes excessiveness, superficiality and the pursuit of personal pleasure (Dean 2018), while sustainability is often associated with moderation, altruism and collectivism (Naderi and Strutton 2015; Waris, Dad, and Hameed 2021). Further, sustainability practices concern about social justice and the adequate use of natural resources, while the luxury businesses are often criticized for raising social inequalities and draining rare and natural resources. Other authors propose that sustainable luxury products are compatible with luxury brand prestige and increased social power (e.g. Achabou and Dekhili 2013; Beckham and Voyer 2014). The complex and contradictory nature of sustainability and luxury can also produce conflict in thoughts and behaviors among luxury consumers.

Our findings support the notion that successful environmental initiatives would boost consumers’ willingness to pay more for luxury products. This is consistent with Hennigs et al. (2013) and Carcano (2013) findings suggesting that the sustainability practices have a positive influence on consumers’ brand desires through enhancing dream-imbued image of luxury products. However, it should be noted that there are existing research supporting the opposite point of view. For example, some authors (e.g., Dekhili and Achabou 2016; Maman Larraufie and Lui 2018) argue that luxury buyers of expensive products are not particularly concerned about the sustainable aspects of luxury production; some consumers even express a negative attitude toward sustainable luxury products (e.g., Janssen et al. 2014).

Others (e.g., Achabou and Dekhili 2013) found a negative association between the luxury perceptions and the presence of recycled fibers. According to the consistency theory (Festinger 1957), when there is inconsistency and perceived divergence between two pieces of information (e.g., luxury versus sustainability), people can either rationalize their behavior to reduce psychological discomfort (e.g., ignore sustainability issues), or they can change and act consistently with their beliefs, values and perceptions (e.g., abandon unsustainable luxury purchases). Therefore, the contradictions in results may due to the differences in respondent characterizes, age groups and education backgrounds. The inconsistent results of sustainability in luxury can also be related to the selections of sustainability materials and ethical approaches in the study designs. Hence, it is important for future research to adopt multiple product categories with diverse demographic populations to validate the current results.

Theoretical contributions

First, our study provides clearly demonstrated the overlapping and differentiating characteristics of natural rarity and sustainability through preliminary results and theoretical designs. Specifically, our results also fill a knowledge gap in previous literature by comparing the effects of natural rarity and sustainability within one experimental design. Our results provide an understanding on the differentiated functions of rarity and sustainability, as well as opening the possibility of combining the two in luxury practice to maximize consumer desires and purchase intentions. It provides valuable directions for future research to reconsider the relationship between rarity and sustainability in luxury. That is, natural rarity and sustainability should not be treated as mutually exclusive concepts, they can be regarded as complementary attributes to maximize the efficiency of luxury branding.

Second, our research is the first paper specifying the mediating role of consumer desire and how it affects the relationship between natural rarity, sustainability and consumers’ willingness to pay more. The incorporation of consumer desire enhances our understanding on how natural rarity and sustainability exert their influences on consumers’ actual purchase intentions, which has meaningful implications in luxury marketing practice. Given the complexity found in the literature regarding how environmental and social sustainable behavior and rarity affect consumer desires, and the ambiguity underlying the phenomenon of luxury purchases involving prosocial behaviors (Luomala et al. 2020), results of the current paper unveil the needs for a more complex model to further test how luxury desires are affected by sustainability (Kunz, May, and Schmidt 2020).

Further, our study unveils the current controversies regarding the compatibility between luxury and sustainability for stimulating desires and evoking purchase actions. Our results demonstrated the important status of sustainability in luxury through consumer lens, suggesting that luxury brands should make an effort to select sustainable materials of excellent quality in order maintain brand desirability and brand status.

Managerial contributions

Limited research has investigated the interactions between natural rarity and sustainability in terms of eliciting desires and actual purchasing intentions such as willingness to pay more for luxury. The current study thus provides meaningful managerial contributions on understanding the influence of natural rarity and sustainability from consumer perspectives to warrant luxury practice.

According to previous research, the association between sustainability and luxury demonstrate increasing complexity, and that sustainable luxury products seem to either strengthen or lessen consumers’ willingness to pay more depending on consumers’ feelings and desire for luxury goods (e.g., Cervellon and Shammas 2013). Our findings support the conjunctive use of natural but sustainable materials to evoke desires and purchase intentions. This opens the possibility of introducing sustainability as a path to integrate advanced innovations into luxury production processes, foreseeing the additional values presented by luxury sustainability practices, and revealing the purchasing motivations of green products among luxury consumers.

Further, the adoption of sustainable and rare materials (e.g., vegetable leathers) also add on the uniqueness of its constitutive resources, and thus produce positive influence on luxury value (Cervellon and Shammas 2013). For example, compared with cotton, alternative natural fabrics such as flax and hemp are not only perceived to be rarer and more luxurious, but they exert much less pressure on environment because it only requires modest amount of fertilizer (Dekhili, Achabou, and Alharbi 2019).

Overall, our studies support the view that sustainability and luxury can be compatible through the enhancement of consumer desires for luxury. In particular, our findings demonstrate that “sustainable luxury” has become an integral part of luxury brand images, as it is associated with how consumers express their desires and values in a justifiable way with social and ecological concerns (Hashmi 2017).

Notably, these findings highlight the current complexity and tension in regards to individuals’ distinct pursuits of meanings and benefits of luxury. Therefore, luxury brands need to respond to increasing consumer awareness, in the selection of raw materials used for their products (Kim and Ko 2012).

Limitations and future research

Future research should consider to use multiple product categories (e.g., luxury shoes, bags, watches) to further validate the current results. Further, this study involves primarily Australian consumers, with an average age of 46. Previous research suggests individuals’ green consumption behaviors are affected by demographic factors such as such as sex, age, education, family size and family income (Xiao and Li 2011). It is thus important to explore the differences between green consumers to identify their characteristics through market segmentation tools. It can be particularly interesting and useful to compare the potential differences on rarity and sustainability perceptions across multiple countries. Hence, it can be particularly important to replicate the current studies among different populations with diverse demographics to reach a meaningful valuable conclusion.

This study clearly demonstrates the prevalence of natural rarity and sustainability on enhancing consumer desires and willingness to pay more. Subsequent research should consider to extend the current findings by including potential mediators and moderators such as brand attitude, brand attachment and perceived luxuriousness, which have been shown to play critical roles in predicting luxury brand perceptions and purchase intentions (e.g., Hennigs et al. 2013; Kautish and Sharma 2018).

Disclosure statement

No potential conflict of interest was reported by the author(s).

Appendices

Appendix A. Focus group interview questions

Generic questions:

1. What was your recent luxury purchase?

2. From which brand

3. What was the product /service category?

4. Do you have desires to purchase luxury products?

5. Think back and tell us why you decided to buy it.

6. What were some of the motivations for your purchase?

7. Was it worth purchasing the item? Are you willing to pay more for your purchase?

8. What are some of the benefits you derived from that purchase? Were you happy with your purchase/ were you regret? Why/ Why not?

Questions for rarity and sustainability:

1. Introduce the conceptualisations of sustainability and rarity respectively.

2. Do you think a brand’s sustainable practice is important for your luxury purchases?

3. Do you think it is important for luxury brands to keep maintaining rarity?

4. Do you think product rarity is important for your luxury purchases?

5. Do you have desire for luxury products, is the desire associated with rarity or sustainability, or any other factors?

6. Do you think sustainability and rarity are compatible concepts? Or are they mutually exclusive? Discuss the reasons

7. Select product/service categories that can utilize both rarity and sustainability in their marketing communication.

8. Luxury Wallet (Ettinger):

   Description: This picture shows the signature wallet from Ettinger, one of England’s most renowned luxury manufacturers. This luxury wallet is limited edition, with an annual release of 500 pieces. Made with traditional British craftsmanship using eco-friendly, sustainable vegan leather and recycled plastic, this wallet is as exclusive and unique as it can get.

9. Luxury bags (Hermès bags):

   Description: Hermès bags are the most sought-after and prestigious bags globally, known for its timeless design, exceptional craftsmanship, and exclusivity. Hermès carefully controls the production and distribution of Birkin bags, making them highly exclusive and difficult to obtain. Regarding the Birkin bags, Hermès goes to great lengths to source only the best quality materials. This includes leathers such as calf, alligator, and ostrich, which are selected based on their exceptional beauty, durability, and rarity. However, these premium materials are expensive and meticulously inspected to ensure they meet Hermès ‘high standards”.

10. Luxury ingredients (white truffles):

    Description: “White Truffles are the rarest and most prized truffles in the world. Hailing primarily from the Piedmont (Piemonte) region of Italy, these culinary gems have the most pronounced and fragrant aromas of any truffle species. This makes them the most highly sought-after truffle variety on the market and due to extremely limited supply and availability, also makes them the most expensive truffles in the world”.

11. Luxury shoes (Tengri):

    Description: Tengri is one of England’s most renowned luxury shoemakers. Made with traditional British craftsmanship using the rare breed yak from remote Khangai region of Mogolia, this pair of shoes is as exclusive and unique as it can get.

12. Luxury scarf

    Description: This picture shows the newly launched luxury winter scarf from Fendi, one of Italy’s most popular luxury fashion brands. This winter scarf is limited edition, with only 1000 pieces released globally. Made with renowned Italy craftsmanship using extremely rare milk animal fur, this luxury scarf is as exclusive and unique as it can get.

13. Luxury fashion shoes (Prada)

    Description: “Prada for adidas Limited Edition - an homage to timeless classics that transcend generations – is offered in exclusive limited editions of 700 pieces, both footwear and accessories numbered with a unique serial”.

14. Diamonds (red and white diamonds):

    Description: “A red diamond is a diamond which displays red color and exhibits the same mineral properties as colorless diamonds. Red diamonds are commonly known as the most expensive and the rarest diamond color in the world, even more so than pink or blue diamonds, as very few red diamonds have been found”.

15. Luxury fashion clothes (Burberry)

    Description: “Burberry’s five heritage styles are reprised season after season. There is the Kensington, Chelsea, Waterloo, Camden and Paddington, each with a slightly different silhouette and length – some with soft raglan shoulders, others sharper, sleeker. You can also add custom embroidery, monogramming and vintage linings, using Burberry’s Trench Bespoke service – available at the brand’s London flagship store”.

Feedbacks

1. Showing participants the generated stimuli descriptions

2. What do you think of the research design?

3. Examine the appropriateness of phrases and wording for evoking sustainability and rarity.

4. Are there anything else that you may think that are interesting to look at?

5. In association with the concepts of consumers’ desire, sustainability and rarity

6. Or for the general research in regards to consumers’ luxury perceptions

Appendix B.

Stimuli descriptions

This picture shows the signature wallet from Ettinger, one of England’s most renowned luxury manufacturers. This luxury wallet is limited edition, and is made with traditional British craftsmanship and naturally rare and sustainable cork oak.

Appendix C.

Scale items

Table

Scales
Perceived sustainability (Hamari, Sjöklint, and Ukkonen 2016)
SUS1 Buying this wallet helps save natural resources.
SUS2. Buying this wallet is a sustainable mode of consumption.
SUS3. Buying wallet is ecological.
SUS4. Buying this wallet is efficient in terms of using energy.
SUS5. Buying this wallet is environmentally friendly.
Perceived natural rarity (Kapferer and Valette-Florence 2016)
PNR1. This wallet is naturally rare.
PNR2. This wallet is naturally scarce.
PNR3. This wallet uses high quality raw materials.
Consumer desire for luxury (Kapferer and Valette-Florence 2016)
DES1. I desire this wallet as it is unique of its kind.
DES2. I desire this wallet as it is produced in small series and not in mass.
DES3. I desire this wallet as it is sophisticated.
DES4. I desire this wallet as it is original.
DES5. I desire this wallet as it keeps its exclusive character.
DES6. I desire this wallet as it has a great history.
DES7. I desire this wallet as it endows class to those who use it.
DES8. I desire this wallet as it is a renowned leader in its category.
Willingness to pay more (Demirgüneş 2015)
WTP1. I will continue to buy this product If its prices increase somewhat.
WTP2. I will buy from this product, even if competitors charge a slightly lower price.
WTP3. I have so much confidence in this product for assessing the benefits of it.