Is Luxury Really for the Rich, or Is It for Those Who Want to Look Rich?

Did you know luxury brands use questionable psychological tactics for their marketing strategies? Customers are often influenced by luxury marketing to purchase objects when ordinarily, they wouldn't put their money towards them. Luxury brands project the idea that their brand is “the best of the best, the finest quality, or one of a kind,” but in reality, their marketing centers around a mirage of exclusivity and scarcity.

In the Journal of Business Research, professors in marketing, Kapferer and Valette-Florence write, “Luxury high price is not about tangible benefits. Price is simply not a cost or quality cue. It also is a source of satisfaction or pride. Price is value, meaning it reflects a personal, financial, and cultural ability to pay a lot for a non-necessity.” More simply, price is often defined by how much a customer is willing to pay for a product as opposed to products’ true quality. And in the context of Luxury, this is especially the case. In fact, the quality of luxury has been decreasing over the years

Before, designer brands were hand-made with the best materials. For example, the average Dior dress had 20 yards of fabric and weighed a ton. But, as the world has leaned towards globalization, craftsmanship has been exchanged for cheap labor. Luxury brands have outsourced production to manufacturing facilities where workers are not only being treated poorly but paid horrific wages. Despite the shift in quality though, the price has remained the same, and in many cases, it has increased. Is this an injustice? Well, the truth is that some customers see it as a fair transaction. Given the all-consuming world of social media, luxury retailers continue to test how much a customer will pay. Luxury retailers are finding more and more that as long as there's a logo or is capable of being shown off on social media, many customers will gladly pay for it.

So, if people aren't demanding a higher-quality product, and all they care about is how good they look in a photo or post, there's not much of an incentive for these luxury brands to create high-quality pieces in fashion and cosmetics.

What's most compelling and questionable about luxury marketing is how it targets customers. Most people are under the impression that luxury brands target the wealthy. However, in a very large way, those who aspire to be wealthy are also a targeted demographic. If you have a customer who craves more perceived status than what they possess, they will pay a higher price to get it. On the other hand, a customer who is confident and satisfied with their “status” might actually have more price sensitivity to luxury items. They have less demand for the type of validation that luxury brands offer.

For instance, have you ever noticed that luxury hire snobby sales associates because people associate the brand with being worth more and high-status? However, most luxury products are available in department stores and are sold by sales associates who don't know much about the products. Nevertheless, many sales associates in these departments come across as very aloof as if they are associated with the brands. But more often than not, it's deliberate.

According to a new study published in the Journal of Consumer Research, customers who are rebuffed by snobby salespeople are often even more willing to buy afterward. This brings us back to the original point that customers value the experience of being included most of all. “A study by Harris Group found that 72 percent of millennials prefer to spend more money on experiences than on material things.” This seems like an indicator that customers are drifting away from luxury items, but in reality, this change presents an opportunity to luxury brands. Through marketing, events, and customer service, they are able to curate the experience of being included into the elite. They are able to curate the experience of validation.

Of course, if there is a luxury item, you truly desire there is no issue with buying if its feasible for you. However, some things to consider when selecting a luxury item are the following questions: “Is this something I would ordinarily spend money on if I did not know it belonged to this certain brand?” and “Does this product have utility, meaning will it continue to serve a purpose?”

With these questions, remember Luxury brands are not entitled to your business. Our value is not defined by our proximity to luxury brands. A high-value person has a positive impact on those around them and is beautiful inside and out.