In Defense of Luxury Goods

How Louis Vuitton, Tiffany, Burberry, Prada, & More Define the World of Marketing

Since their inception many years ago, luxury goods from the likes of Louis Vuitton, Tiffany, Burberry, Prada, Gucci, and more have been under almost constant fire from those unwilling or unable to spend ~$500 on something that fits in their pocket. Of course, for those who can (and do), there is a bit of a disconnect between why, if they can afford it, they shouldn’t spend their money on something that makes them happy and those who can’t even begin to spend that kind of money on something they can find at Wal-Mart for $5.

Sure, from a logical point of view, the products offered by luxury retailers like Versace probably aren’t quantifiably “worth”  their price tags. No pair of sunglasses, however stylish they may be, are really valuable enough to justify a $200-$300 investment in something that will inevitably be replaced at some point within the next few years. In terms of the way that they make the person feel, however, the price tag may be a bargain after all. Luxury goods are about the experience. These companies aren’t selling the products, but rather the status, confidence, and excitement that comes from unwrapping a tiny blue box or a new leather wallet. As noted earlier on the blog, Tiffany’s blue box carries with it an entire arsenal of positive emotional connections that have the potential to both create and inspire happiness in each and every one of its customers.

Louis Vuitton doesn’t sell products. It sells a ticket into the world of Louis Vuitton and all of the tiny, exciting extra things that come with it. Buying a scarf from Burberry or a purse from Coach or a wallet from Prada has little or nothing to do with the items themselves. They’re high quality products, but if you were to reprice the items based on quality alone, you’d probably find that something that costs $50 from Nautica and something that costs $500 from Gucci aren’t really two worlds apart aside from the name. But, with Nautica, you don’t quite get the experience that you do from, say, Louis Vuitton or Versace. It doesn’t make you feel special and it most certainly doesn’t bring you into a world that’s as exciting as the one that is associated with all of the celebrities and powerful people that have been a part of the world of Louis Vuitton. 

Marketing is about creating experiences that make people happy. Sure, a Burberry scarf may cost $350 but, for the people who buy it, it makes them happy. In a world in which so many decisions are made solely on the basis of quantifiable and measurable numbers, fewer and fewer companies have kept the idea of experience as close to heart as luxury brands. If you were to make a list of companies that really and truly care about creating an experience, somewhere on the list you’d find Apple, BMW, Mercedes-Benz, Swatch, and all of the above luxury retailers. All of their products cost more, but they care. And that caring is worth a lot of money to a lot of people.

Experience can be qualified, but not quantified. An excel spreadsheet alone can’t tell you how to make your customers feel better. It can tell you where you’re spending too much, too little, what’s working and what isn’t. But, at the end of the day, it can’t show you how to make people happy. Marketing, if done correctly, can.

Of course, making people happy isn’t as simple as abandoning excel in favor of emotional connections and feelings that make people a part of a whole new world. But, you can safely say that it probably has something to do with the same experience that has propelled each and every one of these companies to the top of the world in terms of branding. Each one has a great product - and that helps. But, more importantly, all of them are committed to creating great experiences. And those experiences, at the end of the day, are exactly the things that set success apart from failure. In a world of ever more choices by the day, if a choice makes a person happy, they’re apt to make it again and again. If it doesn’t however, they can move on to something new - something that will make them happy. It should be you.