THE AGENCY DE LA MODE x FASHION SUPER-INTERN’s Post

🎯 A lack of solid brand IDENTITY is key to the luxury market slowdown. Money follows culture, not the other way around. Humans naturally define themselves based on what they buy, where they go, who they see etc. It's the culmination and pattern in these behaviors that makes up who one believes that they are. In fact, "identity" translates from 2 Latin words to literally mean one’s "repeated beingness,” and it’s precisely this persistent consistency that has been forgotten by brands as they attempt to relate to their audience. Ultimately, luxury brands lost their way when they started chasing temporary trends, instead of just focusing on telling their own unique brand story. As a result, their UVP is less concrete and defined, customers can’t connect, and the end product looks the same whether it’s Dior or Zara (even luxury craftsmanship and ethics is up for debate these days). So then, what is the incentive in purchasing luxury if it does nothing for the wearer in terms of cultural cache? This is the real issue brands need to address, instead of “market conditions.” One only needs to look at the positive performance results coming from Hermes and Prada/Miu Miu, amid the greater luxury slowdown, to realize that identity is the real issue at play here. And to add to this, @shrimptoncouture made another key point on Instagram that the luxury slowdown is actually because the “luxury experience” we’ve come to expect has all but disappeared. This too, I believe, is responsible. Read more here: https://lnkd.in/edH8WYk8 #Luxury #Fashion

I noticed that the luxury slowdown has been analyzed from the geo-political, macro-economic and market growth angles. But the problem is cultural. Luxury lost its soft power. Luxury’s soft power kept its value and price together. Price made something more desirable (the Veblen effect) and no one questioned the price thanks to perception of value. This value was material, but mostly cultural and social: when an item sold too well or too quickly, a luxury brand would discontinue it. Cynic is a man “who knows the price of everything, and the value of nothing,” noted Oscar Wilde. He might have as well been describing today’s luxury market. Seemingly overnight, luxury products’ price unbundled from their perception of value - their desirability - and turned them into commodities. Luxury exists in the social and cultural exchange system, not in a market segment. It is glib to think that a different market growth strategy will save luxury. Luxury doesn't need a new competitive strategy, it needs a new cultural strategy. Where, exactly, is the value? Luxury is a game of identity. Identity is what differentiates luxury strategy from strategy of premium and mass brands. Identity commands value perception, and prevents cost-per-wear and price-value calculus. It also makes a brand incomparable: premium and mass brands communicate how they are better/cheaper/faster than competition. Luxury brands don’t. (Or, at least, those luxury brands that retained their incomparability do not: Hermès sales are up 11.3 percent in the Q3 of 2024. Bottega Veneta and Brunello Cucinelli have also grown, as did Prada.) The list is short. Luxury brands literally lost the plot. Instead of doubling-down on identity, most luxury brands doubled-down on creating more products. Without identity, a product is commodity. Without identity, a brand is a glorified production facility. A lot of luxury brands organized themselves as commercial entities fiercely focused on their own efficiency, cost-cutting and bottom line. This growth strategy made a lot of them forget who they are, what they stand for, and the role they play in culture. Read the full analysis on The Sociology of Business: https://lnkd.in/e34H9c7m

“Luxury is a game of identity. Identity is what differentiates luxury strategy from strategy of premium and mass brands. Identity commands value perception, and prevents cost-per-wear and price-value calculus.” Spot on!

"Just because you're expensive doesn’t make you a luxury brand." I brutally offended a prospective client yesterday with this home truth. Why is it that many expensive products still fail to resonate with luxury consumers? It comes down to one critical truth: price is only one element of a luxury experience. Luxury isn’t just about price, it’s about desire, identity, and exclusivity. True luxury brands don’t rely on eye watering price tags alone to signal their value. Instead, they create environments of unforgettable experiences that elevate the client's sense of self and belonging. Think about it. A £10k handbag is just a bag without the allure of exclusivity, the storytelling of craftsmanship, and the emotional connection it builds with its owner. This is why real luxury brands excel. They don’t sell products; they sell status, culture, and a lifestyle. So, the question is: Is your brand merely expensive, or does it provide a luxury experience? If you’re ready to train your teams how to influence and sell to high-net-worth clients and luxury consumers and create unforgettable experiences, click the "Visit My Website" link in my bio.

2 reasons luxury brands make you feel like an imposter... You probably know the feeling of treating yourself to something fancy... a Gucci bag, a stay at the Four Seasons— But have you ever wondered: “𝘋𝘰 𝘐 𝘳𝘦𝘢𝘭𝘭𝘺 𝘣𝘦𝘭𝘰𝘯𝘨 𝘩𝘦𝘳𝘦?” Turns out, you’re not alone. Impostor syndrome from luxury consumption is real. You might be wearing a Rolex or carrying a Chanel purse, but still feel insecure being around those who’ve been part of that world for years. A lot of us feel like we’re pretending when we indulge in exclusive experiences. Here's what's going on: Sometimes we feel like we haven't earned our luxury purchases, leading us to feel less authentic. So, could luxury retailers do anything to help consumers feel more comfortable? Sure. For instance, they could focus on craftsmanship or experience (instead of status).  When you see a luxury item as a work of art built to last, you'll feel like you made a smart, well-deserved choice. But do brands really want to do this? I can think of a couple of reasons why they wouldn't: 1. 𝗘𝘅𝗰𝗹𝘂𝘀𝗶𝘃𝗶𝘁𝘆 is what makes luxury desirable.    Because not everyone has access, it's more appealing when you have access     2. 𝗜𝗻𝘀𝗲𝗰𝘂𝗿𝗶𝘁𝘆 𝗱𝗿𝗶𝘃𝗲𝘀 𝗱𝗲𝗺𝗮𝗻𝗱. The more unsure we feel, the more we turn to luxury products to validate us. Think luxury products are the key to feeling confident? Think again. P.S. Should luxury brands help consumers feel less like imposters? What do you think? P.P.S If you're the kind of person who wants to see the original research: Goor, Dafna, Nailya Ordabayeva, Anat Keinan, and Sandrine Crener. "The impostor syndrome from luxury consumption." 𝘑𝘰𝘶𝘳𝘯𝘢𝘭 𝘰𝘧 𝘊𝘰𝘯𝘴𝘶𝘮𝘦𝘳 𝘙𝘦𝘴𝘦𝘢𝘳𝘤𝘩 46, no. 6 (2020): 1031-1051.

Here's a truth we don't talk about much in the luxury market but should: Status sells. INSEAD Professor David Dubois whose done extensive research into consumers' motivations for luxury purchases said, “Consumers’ enduring desire for luxury largely derives from the need for status, that is respect, admiration and voluntary deference afforded by others.” But that status can be expressed in a myriad of ways beyond sporting a logo handbag. For example, what Dubois calls "non-consumption behaviors," i.e. experiential luxuries, can yield equally high-status benefits. Read about it in my latest The Robin Report article with Chris Gray, Psy.D. The Buycologist Chandler Mount Affluent Consumer Research Company #luxuryconsumption #luxurypurchases #consumermotivation #status #conspicuousconsumption #quietluxury #affluentconsumers https://lnkd.in/eXhzHpbb

One of the most common misconceptions about luxury is with regard to its cost. In a press interaction, American designer and brand owner Calvin Klein said, “The price tag doesn’t have to be steep for something to qualify as a luxury product”, debunking the common myth that luxury, by its very definition, has to be expensive. (article attached for full read) In today’s times, millennials hustle through their lives wanting to be able to experience an elevated lifestyle. There is a growing understanding that world class quality, design and craftsmanship comes at a price but it need not be sickeningly expensive. Value for money is no longer defined by cheap or discounted products but “price worthiness”. Brands and marketers are therefore striving to offer consumers the best of functionality, quality and design for a lot less making luxury more achievable. Other segments including SUV cars, premium two-wheeler motor bikes, beauty and skin care products, Health food and such others are witnessing better quality products being offered at a premium but achievable price. In this dynamic market, the challenge for brands will be adjusting their marketing strategies to align with evolving patterns of consumer engagement. We will see more brands enter the affordable luxury space either through brand extensions by incumbent luxury brands, international brand entrants or new home grown D2C brands creating waves in the affordable luxury space. The economic indicators support the trade up and premiumisation that is being witnessed in several categories. There is a need gap in this growing segment of aspiring customers who want to experience the best things in life, and want to do so Now! https://lnkd.in/gTEvhE97

Time Has Become The Ultimate Luxury... The luxury market has reportedly been declining since 2008, down 2% in 2024 alone. As we watch the industry pivot to reinvent the concept of luxury, an evolving image of cultural aspiration is emerging. The recent chapter of luxury has been called "quiet", high quality items without flashy displays of wealth; a trend in response to the post-pandemic economy. What appears to be the next wave of luxury is an evolution of this concept rooted in creating meaning: an in-group identity for those who get it. This evolution of luxury feels like it's not unrelated to two things. Firstly, there is an undeniable social rebellion against "elitism" -- from the recent election's political villainizing of "elites", to the eat-the-rich sentiment clouding the coverage of one particular CEO's recent murder. Secondly, consumers today have a different relationship with trends. As a result of algorithmic influence, everyone has to participate in trends, from consumers to brands. There is no longer room in culture to project cool, or elite status, through avoidance of trends and association with bleeding edge "things". The social algorithms simply wouldn't know what to do with you. These cultural shifts are at odds with an industry that was arguably born out of selling exclusivity. As example, underneath the absurdity of Balenciaga’s Crocs heels is a visible shift within a category known to distance itself from the mass market, now instead selling the ability to bring elevated and distinct taste to an existing mass moment. What culture is responding to in luxury isn't just a quieter aesthetic, it’s also marketing inspired by the idea that time is the ultimate luxury. Miu Miu's recent resurgence of reading pop-ups in New York and Milan exemplify an appetite for more thoughtful, intentional luxury: a celebration of things that require time and effort in an age of instant gratification. Not a surprising tactic considering over the Summer a study validated that Gen Z values luxury simply to "showcase an accomplishment, not as a status symbol." For campaigns across categories, there is a clear opportunity to move beyond the product by curating meaningful experiences that treat the user's time and intention as its own luxury.

Altagamma Observatory 2024 & The Luxury Shame Andrea Guerra – Prada Group CEO: “It was a huge mistake to raise prices so much.” The Altagamma Observatory 2024, one of the most anticipated events for insights into the global luxury market, took place in Milan on November 13. Among the many revelations, a candid remark from Andrea Guerra, CEO of Prada Group, stood out: “It was a huge mistake to raise prices so much.” Indeed, this striking admission highlights a pivotal moment for the industry, sparking discussions about the balance between exclusivity and accessibility in luxury fashion. Altagamma Observatory 2024 offered an in-depth view of the luxury industry’s evolving challenges and opportunities. Specifically, experts and industry leaders shared insights into the current market climate, highlighting missteps and urging a reevaluation of strategies. After Altagamma President Matteo Lunelli’s opening remarks, Stefania Lazzaroni, General Director of Altagamma, presented insights into market trends and future forecasts through the Altagamma Consensus 2025, which leading financial analysts developed. Then, Claudia D’Arpizio and Federica Levato, Senior Partners at Bain & Company, unveiled the Altagamma-Bain Worldwide Luxury Market Monitor. Consequently, Industry leaders, including Laura Burdese (Bvlgari), Patrick Chalhoub (Chalhoub Group), Alfonso Dolce (Dolce & Gabbana), Andrea Guerra (Prada Group), Pier Francesco Nervini (Global Blue), and Marco Piscitelli (Molteni Group), discussed the research findings. President of the Altagamma Foundation, Matteo Lunelli emphasized the significance of the Altagamma research as an international benchmark. Then, he painted a picture of an industry at a crossroads, marked by global uncertainties such as geopolitical tensions, wars, and inflation that have caused consumers, especially the middle class, to lose purchasing power. Also, the slowdown in China and a change in the USA with the Trump election will cause a potential 10-20% increase in duties. But both markets are crucial for Italian products. So, 2025 will be a year of transition, and recovery expected in 2030. Lunelli’s key factors: Know-how, creativity, technological innovation, sustainability. In conclusion, he advocates for collective action through partnerships, and collaborations. Read our full report on the blog: https://lnkd.in/dK5tyC69

Luxury isn’t bought—it’s desired. And the brain is wired to crave it. Many believe luxury products are chosen purely for their superior quality. While quality matters, the truth is the decision often begins in the mind, not the wallet. A high price tag doesn’t just represent cost—it signals status, uniqueness, and a sense of achievement to the buyer’s brain. Behavioral neuroscience sheds light on why luxury captivates us: 1. Scarcity Equals Value Think about the frenzy for limited-edition sneakers or an iconic Hermès bag. The brain perceives scarce items as more desirable. That “Limited Edition” tagline? It triggers FOMO (Fear of Missing Out), making the product feel irreplaceable. 2. Emotional Resonance Luxury brands excel at storytelling—connecting their products to heritage, exclusivity, or craftsmanship. This taps into the brain’s emotional centers, making the purchase feel deeply personal and meaningful. 3. Social Identity Luxury is about self-expression. Buyers aren’t just acquiring a watch or a car; they’re investing in an identity—one aligned with success, elegance, and exclusivity. If you’re in the business of creating premium experiences, here’s how you can leverage these insights: 1. Focus on storytelling: Showcase the craftsmanship or legacy behind your product. 2. Highlight exclusivity: Use scarcity as a strategy, but keep it authentic. Create emotional connections: Show how your product enhances the buyer’s personal story. 3. When a limited-edition Birkin bag sold out in hours, it wasn’t just the craftsmanship that drove sales—it was the exclusivity. Buyers knew they had a once-in-a-lifetime chance to own a piece of that collection. What drives your customers to choose premium? How are you leveraging psychology to elevate your brand’s desirability? Let’s exchange insights—drop your thoughts in the comments below. Follow me for more strategies on luxury marketing and consumer psychology!