When people are looking for a new watch, car, necklace, pair of shoes, or even a Citrine Yellow Cashmere and Wool Tiffany Cushion, the price will naturally give the item a higher intrinsic value.
This higher price must mean the product will give us a superior consumer experience, right? Why else would I opt for the Tiffany option over the Yellow Remi Cushion from Kmart? While this positive causation between price and perceived superior quality is partially true, it’s not the definitive factor that influences one's purchase decision.
While a perfectly nice and durable pillow can be purchased for under $15, some consumers will inevitably purchase the $1,250 Tiffany option. Despite the pillow serving the same function and likely being thrown on the floor every night before bed. So why do we as consumers often opt for the higher-priced item, despite serving no considerable functional advantage? The brand.
In one of our previous blogs we discussed a psychological concept called the Halo Effect. This concept encapsulates the consumer experience when purchasing from a luxury brand. If our initial impression of the brand is positive, we’ll likely continue this perception to other areas of the business subconsciously. If the shop looks fancy, the staff are all in suits, and the price tag is steep, it has to be a good quality product, surely?
Branding wields a powerful influence on consumer behaviour, without it, a product cannot really achieve a positive association or emotional attachment. At its core, luxury branding is about cultivating a unique identity that extends far beyond the product itself. Do you think your product will beat your competitors simply because it’s the best quality? Think again.
Many luxury brands masterfully craft a narrative that evoke emotions, aspirations, and a sense of status or exclusivity. It’s this narrative that allows brands to price their items higher. Creating a T-shirt brand and selling them for $450 each does not guarantee that they'll sell well. People may associate high prices with luxury, but it is not that simple.
The allure of luxury branding lies not just in the product's functional attributes or aesthetic appeal, but in the promise of an elevated consumer experience and an affiliation with the distinct community the brand perceives to be.
There’s a reason Gucci can get away with charging $800 for a basic white T-shirt. Their visual style, language and branding create the perception of status and wealth. The brand is recognised by everyone as expensive, and when you see one of their stores, they encapsulate luxury and make many of us want to be associated with it. They aren’t just selling a material object, they're selling the ability to associate yourself with their status.
In simple terms, we buy what we want to be, and luxury brands are the ones selling it. We aren’t buying to meet the basic life requirements, but rather the symbolic value luxury brands give us to increase our self-esteem, and how we believe people will perceive us.
The question is, how do you create a luxury brand? Throwing an expensive price tag on will only get you so far, and being the highest quality product doesn’t mean you’re automatically a luxury brand. Rather it is the brand and marketing that truly separates a luxury brand from the riff raff.
Whether you're an aspiring luxury business or not, a strong brand and compelling identity are crucial if you want to stand out against the crowd. Need help standing out? Come talk to Beans.
Let us do the thinking for you.