From $500 Balenciaga logo t-shirts to $800 Christian Dior sneakers a question that’s often asked is why luxury designer brands charge so much. For their products some will argue it’s about the quality you get what you pay for today.
Lets take a closer look at the different factors behind the high and still rising luxury fashion prices. Luxury brand prices have always been high, but over time prices have risen at rates which far exceeds general inflation levels, a logical starting point on one of multiple influences on high prices of the growing cost.
Are luxury brands worth the money
Luxury designers tend to work with higher quality materials than your average brand would, and this has an impact on how their price. Is such a product on top of that rise in raw material, cost you to supply shortages or increases in demand ultimately affect the final prices.
Faced by consumers, many high-end brands like Hermes who live with sun also have the book with their products manufactured in European countries, meaning the overall labor and manufacturing costs are going to be greater than if the same process was to take place in Asia for example, a continent in which many other brands take advantage of some of the cheapest production costs in the world.
While material and factory costs contribute to higher prices, the prices of luxury brands charge for their items far exceed the direct costs involved in making them. In a 2009 interview with The New Yorker Lanvin creative director at the time Alber Elbaz, added context to this notion when he describes how prices aren’t solely based on the end product, but also the research and development that goes into making them.
Using a dress as an example, he said the following; I took all the bones out and I stitched, and to get there you know it took me forever, it took me six or seven dresses to make one. It’s time and it’s money, and we are not doing it in offshore countries. We pay sixty five percent taxes in France. It’s so much work doing a collection for me, is almost like creating a vaccine. Once you create the one vaccine and then you can duplicate for $9.99 but see if you can create it for $9.99, the answer is not.
Why are some brands more expensive than others
He makes a fair point if we look at high street fashion brands like Zara Topshop. They take trends that are currently caught and copy they look, to stock their shows before moving on to the next trend. In contrast to the luxury fashion example, this requires minimal research and effort which therefore helps to keep the cost of producing new ranges low. This argument works in favor of the luxury brands.
When we’re talking about the complex products, such as the hand constructed, a dress that our bail referring to however, about the simple is, you want your Gucci logo t-shirts that read for over three hundred dollars. Has that much research and development really gone into the products to justify such a price tag, probably not, but was released by the business of fashion and fashion beans both highlight the fact that the cost we’ve discussed so far are only a fraction of the total expenses required to bring products to the market. Staffing, rent, shipping and possibly the most important one marketing, all add massively.
It’s a luxury brands overall costs, a runway show can cost more than fifteen thousand per minute to stage, with some costing considerably more. Millions are spent on big celebrity endorsement deals, hats can cost hundreds of thousands to shoot and then even more to advertise them in the right places just so customers are convinced that they should spend as much on the latest sneakers as they would on the holiday.
Now that the cost related factors are out of the way, let’s keep it real. Luxury brands will also play in seemingly absurd prices on products simply to keep the prestige levels higher. Back in 2013 Burberry even announced that they would raise the prices to increase its appeal to the upper end of its consumer base in addition to attracting new wealthier customers. The more expensive something is the more exclusive, and therefore desirable it becomes, explains business of fashions Lauren Sherman.
The fact that the majority of the world can’t afford a particular products can make the idea of owning it a bit more attractive to certain consumers. This correlation between price and exclusivity also means that high-end brands are reluctant of the discounts, or lonely priced items, the mind fears or dilute the exclusivity and power of the brand.
Some brands go as far as burning stocks to prevent their excess goods from being sold at knockdown prices. In 2018 Burberry hit headlines for destroying twenty eight point six million pounds worth of unwanted stuck. In the previous year luxury brands are well aware that without price being kept at a certain level their products lose an element of exclusivity that would be difficult to replace.
A final factor to mention, which also plays a part is the human psyche, people have historically equated cost to quality. A 2008 study from Caltech found people who drank the same wine ranked as more enjoyable when they were told it cost more, even though what was actually in the glass was identical.
This could arguably be applied to fashion too. This isn’t to say that luxury brand products are the same quality as products for more affordable brands, but the price and difference between the two is likely to be far more substantial than the difference in quality.
Generally speaking, you’re paying extra for all the cost factors we spoke about today, in addition to the premiums that are set by the brand. Because they know people are willing to pay more for the exclusivity and prestige associated with them.
A LinkedIn art-school by Chris Reston summarizes the topic nicely. This isn’t word for word but essentially he said; whether you regard these brands as being overpriced or worth buying is completely your choice. Fashion has long been regarded as an art, and similarly to in the art world items are valued by what people are willing to pay for them. If you’re willing to pay top dollar for an item, and you enjoy wearing it, that no one can tell you it wasn’t worth it. In any case it never hurts to know precisely what you’re paying for.
Rolex, Gucci, Louis Vuitton – what do they all have in common?
Well, aside from being amongst the world’s most famous and sought after luxury brands, they also share their less glamorous title of being among the most counterfeited luxury brands to ever exist.
Whether you consider yourself a fan, or just have a casual interest in luxury brands, chances are you’re well aware of the existence of fake luxury items. They’re nothing new, but perhaps what you’re less in tune with is just how widespread and deceptive some of these fakes become.
Take a closer look into the rise of the luxury concert industry, how common and how close some of the things have become in, and what happens next. The act of counterfeiting existed long before any of us here today were alive. In fact, it’s often dubbed as the world’s second oldest profession.
Records dating back to ancient Greek and Roman times, for example coins usually counterfeits for an occasion, produced with government authorization. The coins had a base metal core such as copper which was then plated with a precious metal typically gold or silver in order to make it look like a solid precious metal coin. Back then punishments for making countries could have easily been death.
Nowadays, punishments have changed in a more lenient, but what remains exactly the same as the concept behind counterfeiting. find an item of value, and reproduce it. If the item is reproduced accurately, the producer and or user reap the benefits associated with the genuine article.
Unlike currency, which dates back millenniums, the majority of luxury brands we indulge in today have been around for less than 200 years. During this period, for the most part, their items have been in demand and deemed valuable, and will search qualities being
counterfeited is inevitable.
In actual fact, arguably the most notorious luxury brand signature feature Alvey’s monogram canvas, was actually created to fend off counterfeiting Louie Vuitton son George. He headed the brand after his father’s passing, created a patent in 1896 to defend against a
growing number of fakes popping up in and around France. The monogram canvas covered the brand’s trunks and the complicated nature of the pattern made it difficult to replicate at the time.
Of course, now things are very different. Within the last few decades the world has changed drastically, we live in an incredibly advanced technological era, and so naturally counterfeiters have a wide range of equipment at their disposal. Therefore, making the replication of designs more feasible than it was in the past, not only that but also the creation of more physical locations.
Why are designer brands counterfited
The introduction of the Internet, and then social media have all broken down huge barriers that previously acted as shields for luxury brands. Where in 1900 it would have been tricky to get your hands on many luxury brands, let alone reproduce them. Actually, at scale in 2020 globalization, is such that people all over the world can see and access them.
Counterfeiters can very easily get a hold of authentic items and deconstruct them in order to facilitate the production of their own versions. In many cases it seems they don’t even physically need the exact authentic item to produce a fake anymore.
So we know luxury counterfeits are out there, but just how prevalent of it 2018 is official. Global brand counterfeiting report revealed that counterfeits were responsible for losses of an estimated 98 billion dollars. In the luxury goods sector, by the end of 2020 this figure will have increased.
Without doubt, there are thousands of websites openly selling fake luxury goods. Online marketplaces are corrupt with users advertising replicas as authentic, there are forums dedicated to the buying and selling of designer counterfeits and the list goes on.
Messenger apps WeChat and WhatsApp have long been used as showrooms in which counterfeit cell is connected. Buyers on Instagram in April 2019 report from analytics firm ghost data found there nearly 20% of posts on the platform about fashion products featured counterfeiters.
At this stage the counterfeits are literally in your face, even if you haven’t noticed them you’ve definitely scrolled past a few. How close are they to the real deal anyway, well there are levels to it the lowest grades of fakes don’t really pose much of a threat. These are the types you may see for sale on street corners, or a popular beach holiday destinations just by looking at them you can tell the quality is lacking.
On the other hand, there are the one so called one-to-one counterfeits, that would fool the majority of the public. Here we’re talking about super fake designer bags, for example that can cost anywhere between several hundred and a few thousand dollars, or we might talk about and watch fake watches that have been modified to include a genuine part such as a dialogue bezel in order to make them appear more like the authentic model. Even if we ignore the top fakes for a moment, evidence still suggest the average fake is becoming closer to the real thing.
Occurrences such as one of the world’s biggest luxury consignment companies, mistakenly allowance based upon its authentication tests or established luxury brand retailers, allegedly being quote selling fake stock to customers, can only happen if fakes have become a more accurate. So what now, well, what happens next is anyone’s guess as long as there’s demand for counterfeits they will continue to be supplied and improved versions will keep coming up.
Luxury brands will fight back relentlessly, the use of RFID tags, surti locho codes and the creation of teams dedicates intellectual property management are just a few of the ways they’ve gone about this already.
Unfortunately for them, the reality of the situation is that if a fake item looks genuine but only costs a fraction of the genuine item suppressed, they’re always going to be people out there who have no issue up to for the fake whether or not that’s fair well that’s a debate for another day.