What do you buy?
By: Divyanshu
When it comes to luxury, there’s often a fine line between the value of a product and the power of the brand. The distinction shapes our perception of luxury goods, from a well-made leather handbag to a watch with complex mechanics. Luxury, as an industry, often merges these two ideas so deeply that they become difficult to separate. However, understanding where the value lies – whether in the product itself or in the brand behind it – provides knowledge about what people are actually purchasing when they invest in luxury.
What is this dichotomy?
When we talk about luxury products, a lot of the perceived value stems from craftsmanship. In this case, the appeal of the luxury good isn’t just in the name stamped on it but in the careful attention to detail, materials, and the skill required to make it.
Hermès’ Birkins are celebrated not only for the brand but also for the expertise in leatherwork. Each bag is handmade by a single artisan over a period of up to 48 hours. It’s built with the finest leather, often sourced from exclusive tanneries, which produces bags that are considered works of art. Here, the product’s inherent quality and scarcity are significant factors in its luxury status.
Take Patek Philippe, another example where the product craftsmanship speaks for itself. Known for hand-crafted complications (like perpetual calendars or moon phases), each watch is a marvel of mechanical engineering. Collectors buy these watches not just because of the Patek Philippe name, but because of the complexity and artistry that goes into each piece. Here, it’s the product that provides luxury value, exceeding trends and marketing.
On the other side, luxury is often about the brand experience and the status it confers. This intangible value comes from the association of the brand with a certain lifestyle, heritage, or elite status. When people buy for the brand, they often do so to align themselves with the image, values, or prestige the brand represents.
Louis Vuitton, while producing high-quality leather goods, primarily thrives on brand strength. The instantly recognisable LV monogram is a symbol of status and affluence worldwide. People buy Louis Vuitton to align themselves with the brand’s reputation for affluence and elegance, making the brand itself as valuable, if not more so, than the actual product quality.
Rolex is another such example. While Rolex watches are well-made and precise, the brand’s power as a status symbol is what drives much of its popularity. A Rolex is universally recognised and signifies success and reliability. People buy Rolex not just for the watch but for the lifestyle image – whether it’s a businessman, a professional athlete, or a public figure, Rolex represents “making it.” Here, the brand perception adds more to the value than the mechanics alone.
However, in some luxury products, the product quality and brand prestige work in perfect harmony. This fusion is often seen in luxury brands that have built their reputation on impeccable quality, where the brand has become a beacon of excellence because of the superior product.
When we talk about excellence, two luxury leaders always cross my mind: CHANEL and a Rolls-Royce.
CHANEL’s brand power is immense; from its iconic logo to the charm of Gabrielle “Coco” Chanel’s history, it’s seen as timeless and prestigious. However, CHANEL’s products – particularly its haute couture and handbags – are also regarded for exceptional quality. A CHANEL tweed jacket, for instance, isn’t only instantly recognisable but also made with precision and care that justifies its high price. In CHANEL’s case, consumers are buying both the product and the brand experience in equal measure.
Rolls-Royce vehicles are as much about brand prestige as they are about the product itself. The Rolls-Royce name is synonymous with opulence, and owning one places you in a certain class. Yet, each car is also carefully engineered, with hand-crafted interiors, customisations, and a driving experience that few cars in the world can match. Here, buyers are drawn to both the engineering excellence (product) and the societal prestige (brand).
Brand image over product quality?
In today’s market, some luxury brands are able to command high prices with a primary focus on branding, often catering to younger consumers drawn to the “luxury” lifestyle.
Let’s start this with Balenciaga. Balenciaga’s recent collections, especially its popular Triple S sneakers, are more about brand image than traditional luxury craftsmanship. Balenciaga has marketed itself as edgy and innovative, attracting consumers willing to pay high prices for the brand name. In this case, buyers are often drawn more to the brand identity than to the intrinsic value of the product. A troll.
Supreme started as a skateboarding brand but evolved into a luxury streetwear brand. Much of its value is tied to exclusivity and brand identity rather than product quality. A Supreme hoodie might cost several hundred dollars, not because of the fabric or construction but because of the brand’s “cool factor” and the perceived exclusivity associated with it.
Brand as a legacy vs Product as a tangible asset
Some luxury purchases are made for their investment value, where buyers hope that the product will hold or increase in value over time, irrespective of brand perception.
Heard of Château Lafite Rothschild? For some, fine wines are a luxury that combines brand legacy with a product that can appreciate in value. Château Lafite Rothschild, one of the most famous Bordeaux wines, is prized not only for its brand heritage but also for the quality and aging potential of the wine itself. In this case, buyers are purchasing a product with tangible value (quality and age-worthiness) rather than just a brand name.
Similarly, high-end antique furniture and vintage jewelry from well-regarded eras (e.g., Art Deco or Victorian) often have intrinsic value because of materials like fine wood, gemstones, and precious metals. Buyers in these markets aren’t only paying for the age or origin but for the product’s durability and aesthetic craftsmanship, which can appreciate as unique, tangible assets.
Today’s Experience Economy
Luxury brands today are increasingly focusing on the experience associated with the product, which merges the product and brand concepts into a holistic, emotional appeal.
Buying an engagement ring from Tiffany & Co. isn’t just about the diamond. Tiffany has built an entire experience around its “blue box” moment, where the ring presentation becomes part of the luxury appeal. The brand has infused the product with a sense of occasion, prestige, and romantic symbolism that adds to its perceived value.
And so when you stay at a Four Seasons hotel, you’re not just paying for a bed in a luxurious room but for the entire experience – the service, ambiance, and sense of exclusivity. Here, the brand reputation and service experience are as much a part of the “product” as the physical amenities.
What do we really buy in luxury?
Well, the decision between product and brand in luxury often comes down to what a buyer values more: tangible quality or intangible status. Some consumers look for items that are timeless, well-crafted, and enduring (product-oriented), while others are more captivated by the narrative, exclusivity, and emotional allure that come with the brand.
Ultimately, true luxury often lives at the intersection of these two elements, where product quality and brand power are seamlessly intertwined, creating a holistic experience that fulfills both tangible needs and emotional desires. In the world of luxury, what you buy may be as much about the story and status as it is about the substance and structure.
