The world of high-end luxury spending is something that is not for the faint-hearted. If you are counting pennies and worrying about the water bill, then these are not for you. However, for the well-heeled, with ample resources at their beck and call, there are a number of reasons why they choose to spend on high-end luxury brands and products.
Now in tough and uncertain times, luxury products have come under fire. At Swankk, we understand that people are hurting. However, we believe that luxury goods are not to be blamed for the situation that the world finds itself in.
Luxury prices have soared. People want what everyone else cannot afford to have. This desire to have exclusive bragging rights is at the heart of the high-end luxury goods market.
Social media influencers are all the rage against high-end luxury. So is luxury worth it in 2025 and beyond?
The Value of Luxury
Luxury goods are the perfect paradox of worth vs. value. They are super in demand and yet serve no object purpose to better one’s life. This paradox is what makes luxury goods truly unique.
For an economist, it might not make any sense. Here demand sometimes goes up as price goes up. This is the opposite of conventional economic thinking.
Now most goods and services are sold based on financial factors. People are willing to pay a small profit to the maker of a product as long as they feel that the price is not too high and within a reasonable range.
However, with higher end luxury goods then the cost of making them is often left in the background.
Price is the ultimate gatekeeper of access to things be it goods, education, residences or anything else that people tend to value.
Price sensitive people are usually niddle class and who end up spending most or all of their money on life essentials and and end up with very little spare cash to splurge on status enhancing products and services.
These customers brand loyalty is somewhat fickle. They do not want to pay several times the prices of the cost of production.
In the words of a former Chanel executive Olivier Nicolay that, ‘costs of raw materials are only part of the picture. Historically Advertising and promotional costs were also very significant. Now, many brands and conglomerates have ESG targets in sight, leading them to use volume as a tool to reach their very ambitious objectives. Increasing prices has helped boosting turnover for a few years but it will be more difficult from now on’. Nicolay went on to say that ‘The globalisation of the luxury market has created a need for price coherence, slowly bringing Asian-level prices to the West, as the reverse would be too damaging in terms of margins.’ Also, master perfumer Nathalie Feisthauer highlights the strong growth in fine and niche fragrances; this has led to ‘more competition for premium perfumery ingredients.’
Do Luxury Prices Still Deliver Quality?
Now, the question is are all expensive luxury goods really worth the money?
At Swankk we have a vast collection of luxury items and luxury brands that deliver value for money. However, this is a big question facing the whole luxury goods market. Branded brands are mostly worth the price but why? It the quality actually good or is it just an average brand with a super high price tag.
When it comes to brands they often struggle to come across with their value. For some of the major brands their quality continues to remain good.
Be it Gucci, Hermes, Fendi, Bally, Prada, Versace and other leading brands that are being sold at Swankk are producing great shoes, belts, handbags, dresses and other products.
Selling at All Costs: Marking Down Luxury Goods
For most people, pricing is the main thing that is not talked about much in the world of luxury spending.
Because these products are not cheap. Products are often sold and promoted based on quality, craftsmanship, and a host of other factors.
Also, at the lower end of the luxury goods market companies tend to go for two different strategies.
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One which is the most common is to go for massive sales. These price cuts make economic sense and for lower end brands this often times does the trick. However, sales and price cuts for luxury goods are done in a different way. They do not bank on price. They bank on being exclusive. You would never see a Gucci clickbait ad promisng 70 percent off. These brands stove to remain exclusive.
By definition they have to keep their price bar high in order to make sure that their customers continue to see them as a valuable addition.
At Swankk we see brands being valuable not for being low cost. It is their quality and their exclusivity that they offer to the discerning consumer.
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