In last week’s feature article, we defined approachable luxury as “value created by reducing one or more barriers to entry (price, availability, others) while preserving one or more luxury attributes (materials, artisanship, design, heritage, others)”. We also described four main pathways to approachability:
Impulse-level purchase from a luxury maison.
Entry-level model from a luxury manufacturer.
Lower-end sibling brand.
Reduced cost structure.
Image: VanderWolf Images / Shutterstock
In this article, we’ll provide a framework for evaluating approachable luxury: three questions you can ask about any purchase. Then we’ll apply that framework to two examples.
The psychology of luxury retail
I’ll come back to this topic in the future, because it’s a rich area for exploration. But for now, the key point is this: there are at least two good reasons that luxury maisons charge such high prices for their goods.
One reason is that they must do so, because they have such high cost structures.
The other reason is the Veblen effect, which is a topic I’ll undoubtedly return to on multiple occasions (honestly, it could be its own newsletter). A Veblen good is “a type of luxury good for which the demand increases as the price increases, in apparent contradiction of the law of demand, resulting in an upward-sloping demand curve”. If you think that sounds like the Holy Grail of retail, congratulations: you now understand, in broad strokes, the last few decades of growth of the luxury industry.
The excellent Tanner Leatherstein (the nom de web of Volkan Yilmaz) explained both these reasons at once—along with how they relate to one another, and to psychology—in one of his leather dissection videos:
Brands like LV, which position themselves as modern luxury labels… engineer an aura around the products and their logos. They’re not just selling a bag. They are selling a symbol of status. That illusion is reinforced through prominent logos and high prices that signal exceptional value even when it’s not immediately visible on the product itself. Those high prices enable the brands for extravagant spending on celebrity campaigns, fashion shows, and those ever-evolving, temple-like storefronts—all designed to keep that image elevated. This model heavily relies on human desire for status and recognition. It’s expensive and carries risks because the core product is the perception which must be accepted by society; otherwise everything is smoke and mirrors.
A framework for considering approachable purchases
In considering an approachable luxury purchase, ask yourself three questions about how and why you’re paying less for something than you might:
What remains luxurious? What about the product and/or the experience of purchasing and owning it is just as luxurious as its more expensive brethren or competitors? Are these product attributes the most important qualities to you?
What becomes cheaper? What did the vendor change to bring down the price? Is it something that you may be able to live with, like a scarcity of high-end boutiques, or a lack of overhead from expensive luxury branding? Or is it something more consequential to you, like lower-end materials, less artisanal production, or the like?
What are the consequences? What are you trading away? Durability? Will the product last for years, or even a lifetime? Service? Will the manufacturer be around to repair the product in years to come? Sustainability? Where do the materials come from? Who performs the labor? Ritual? For many, the story of how they bought a thing is an important part of their joy in owning it; does the shopping ritual give you that joy? Status? Will others notice your purchase, if that’s something you care about?
This framework can help you look at any approachable luxury product and make an informed decision. If you can ask yourself these three questions about an approachable luxury product and honestly be comfortable with the answers, then you’re onto something.
Applying the framework
With our three questions in mind—what remains luxurious, what becomes cheaper, and what are the consequences—let’s take a look at two of the products mentioned above—both examples of the “impulse-level purchase from a luxury maison” pathway to approachable luxury—as illustrations of how to use this framework.
Hermès fragrances (various) (starting at $120 / 75 €)
Image: Hermès
What remains luxurious? The Hermès name, obviously. The Hermès shopping experience, if bought in an Hermès boutique. Buying into Hermès’ olfactory world, which has a rich heritage.
What becomes cheaper? The cost of goods itself. Fragrance can be produced at industrial scale with minimal human intervention. A reasonable guess for the cost of goods of a bottle of Hermès fragrance would be $15–30 (13–25 €).
What are the consequences? Status; unless you’re around a scent savant or an Hermès super fan, no one will know what you’re wearing. Purchasing experience; if you buy Hermès fragrance at a department store counter or a duty free store… the experience is what it is.
The verdict. If you like the scent, if you enjoy the in-boutique purchasing experience, or if it simply makes you happy to be wearing Hermès, go for it. For many, it can be a small luxury indulgence. But if there’s any evidence that Hermès fragrances are materially superior to less expensive competitors, it’s not obvious. Mixed.
La Beauté Louis Vuitton (various products) (starting at $160 / 140 €)
Image: Louis Vuitton
What remains luxurious? As with Hermès, the name and the shopping experience. But there’s also the branding—generally speaking, no one is going to “see” the brand of fragrance you’re wearing, but with la Beauté, Louis Vuitton has gone to some lengths to incorporate their motifs into the products and their containers. And one presumes that with the association of her name (and order of chivalry), Dame Pat is ensuring that the products are high-quality.
Louis Vuitton hasn’t yet disclosed all the details of their approach to sustainability for la Beauté, but this quote from one of their designers was refreshing to read, and gives one hope:
Whenever possible we chose products that are refillable rather than discarded when they’re empty. We selected materials such as brass and aluminum to minimize the use of plastic and increase the lifetime of the products. Our approach is anchored in durability and quality, aligned with our desire and commitment to sustainability. These are objects to be used daily, to be kept for years and enjoyed again and again.
What becomes cheaper? Again, as with Hermès, the cost of goods. Even if la Beauté is high-quality by industry standards, it’s still manufactured at scale.
What are the consequences? So far, Louis Vuitton is restricting access to la Beauté products: only some of their boutiques and their online shop. You may not find it convenient to try.
The verdict. This is a win for Louis Vuitton. Pat McGrath is legendary—the only make-up artist to ever be named a Dame Commander of the British Empire. And the branding is excellent—it’s well-executed and not at all trop, which is refreshing. Recommended.
What this means for you
If you’re considering an approachable luxury purchase:
First, ask yourself what pathway the product follows. Is it an established luxury brand offering an impulse-level purchase, an entry-level model, or from a lower-end sibling brand? Or is it an approachable luxury vendor with lower cost structures? There are no wrong answers here—just be informed.
Second, ask yourself the three questions: What remains luxurious? What becomes cheaper? What are the consequences? There are no truly wrong answers here, only tradeoffs, with one glaring exception: if the only luxury attribute preserved is the logo, it’s not approachable luxury, it’s logowashing.
Discussion
Can you name an approachable luxury purchase you’ve made that you felt good about a year later? What remained luxurious? What became cheaper?
