This article takes a marketing practitioners applicable approach to recent research posted in the Journal of Retailing, of which I rarely cover. The original piece is Consumer Perceptions of How Luxury Brand Stores Become Art Institutions.
To simplify what we can use from the research, we need to understand three things.
1.There is an abundance of rich people willing to make purchases right now.
2. Rich people dislike over-commercialization.
3. Rich people appreciate art.
Let’s face it, once a brand conforms to the usual and begins blasting promotions in your face, it’s no longer as special. Thus, the value of a premium consumer brand judged on prestige and aesthetics inherently drops in the eyes of the elite. We have seen in recent times a growth in high income spenders, and Louis Vuitton has been reaping the benefits.
Now we can comfortably say, Louis Vuitton’s competition is likely not blasting promotions at consumers understanding the principle stated above. So how is it that they are further distinguishing themselves? Have you walked into their store lately?
They don’t have stores they have galleries. Shelled in a story of its more than century old heritage and hand-made dedication, Vuitton makes an effort to distinguish their pieces from others’ products. Their stores look like art institutions, are designed by world renowned artists, and contain their products literally among-st fine art decor.
The point to take away here: Art can be valued however high you like. Because Loius Vuitton can be commoditized, it’s value does not have to drop with the flubbers of the economy like other commercial items.