Very interesting. Luxury Goods are problematic. All that status (for that's what LVMH is really selling) needs to balance on a pinhead of social, political, cultural, psychological, and emotional head and tailwinds (it's a real derecho up there). The primary imperative is, like you sorta said:
"In order to keep a product highly desirable and special, you need to create a sort of undersupply."
You need to manufacture SCARCITY. Not just anyone can get it. Not just anyone with enough money can get it. Ten uber-rich women in Barneys MUST fight over THREE Gucci purses. This is primary. If you had 10 purses available, your brand is in the shitcan for decades. If you have nine, the woman who waves it off to let another have it is now the highest status female in the room, and she doesn't want it. Read Thorstein Veblen's Theory of the Leisure Class (it's fun).
(This was Nike's 2nd biggliest mistake. But did you notice that, Daan? Nike is #4 on Gen Z's list? That's promising for Nike!)
Another point I'll make about selling Luxur...Status, is that it has an Evil Twin called "my status is not needing status." Note the number one status object both groups want is: none. Especially today--I don't care what the kid wrote on that list (I have to see the raw data, ie How Was the Question Asked?) it's hard to attain peak status by buying status. It's jst one part of the pacage--maybe. It's more than a demographic; it's a social group. And it might be aging. Battling that is, of course, the job of marketing.
I know lot of young wealthy people her in Denver/Boulder area, and LVMH is definitely more of a Midwest Tell. I know men and women who think nothing of spending $800 for a plain white T, but turn their nose up at buying a Gucci purse. "You should be enough." (even tho, yeah, you just spent $800 on a t-shirt). For example, buying a $3500 purse and then casually destroying it with cheap sequines and permanent marker and memes is higher status than just owning the purse.
Finally, there's the new political climate that is going to be very hard for the purveyors of Luxury Goods to navigate. Not all rich people or their aspirational equivalents are the SAME.
Take this excerpt from Deloitte (2020, but you get the point):
Millenials and Generation Z, the current market definers, look for culturally sensitive brands. They expect retailers to be 'woke'....The use of non-sustainable raw materials in products has a negative influence on decisions by customers in their choice of brands....LGBQT+....no anorexic models....yaddayadda.
And #10 on the gen Z list? This is an example of the kind of stuff they will have to deal with while trying to appeal to the other side (alho not the best example bc this appears to be about baby bondage):
I'm not against LVMH--in fact, it's probably going to be a very good year for such brands given the Trump crowd, who will revel in non-sustainable materials and rigid social status cues. Seriusly, now is probably the best time to buy it. But LVMH won't be able to straddle the fence. And as long as Daan says the numbers are good I would NEVER argue with that. I just wanted to share some qualitative research and some observational insight while not doing any real concrete work at all. (I am a qualitative researcher and a marketing strategist newly in charge of my own portfolio--I know nothing).
Very interesting. Luxury Goods are problematic. All that status (for that's what LVMH is really selling) needs to balance on a pinhead of social, political, cultural, psychological, and emotional head and tailwinds (it's a real derecho up there). The primary imperative is, like you sorta said:
"In order to keep a product highly desirable and special, you need to create a sort of undersupply."
You need to manufacture SCARCITY. Not just anyone can get it. Not just anyone with enough money can get it. Ten uber-rich women in Barneys MUST fight over THREE Gucci purses. This is primary. If you had 10 purses available, your brand is in the shitcan for decades. If you have nine, the woman who waves it off to let another have it is now the highest status female in the room, and she doesn't want it. Read Thorstein Veblen's Theory of the Leisure Class (it's fun).
(This was Nike's 2nd biggliest mistake. But did you notice that, Daan? Nike is #4 on Gen Z's list? That's promising for Nike!)
Another point I'll make about selling Luxur...Status, is that it has an Evil Twin called "my status is not needing status." Note the number one status object both groups want is: none. Especially today--I don't care what the kid wrote on that list (I have to see the raw data, ie How Was the Question Asked?) it's hard to attain peak status by buying status. It's jst one part of the pacage--maybe. It's more than a demographic; it's a social group. And it might be aging. Battling that is, of course, the job of marketing.
I know lot of young wealthy people her in Denver/Boulder area, and LVMH is definitely more of a Midwest Tell. I know men and women who think nothing of spending $800 for a plain white T, but turn their nose up at buying a Gucci purse. "You should be enough." (even tho, yeah, you just spent $800 on a t-shirt). For example, buying a $3500 purse and then casually destroying it with cheap sequines and permanent marker and memes is higher status than just owning the purse.
Finally, there's the new political climate that is going to be very hard for the purveyors of Luxury Goods to navigate. Not all rich people or their aspirational equivalents are the SAME.
Take this excerpt from Deloitte (2020, but you get the point):
Millenials and Generation Z, the current market definers, look for culturally sensitive brands. They expect retailers to be 'woke'....The use of non-sustainable raw materials in products has a negative influence on decisions by customers in their choice of brands....LGBQT+....no anorexic models....yaddayadda.
https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/consumer-business/deloitte-cn-cb-global-powers-of-luxury-goods-report-2020-en-201202.pdf
And #10 on the gen Z list? This is an example of the kind of stuff they will have to deal with while trying to appeal to the other side (alho not the best example bc this appears to be about baby bondage):
https://www.newsweek.com/marjorie-taylor-greene-slams-sick-balenciaga-america-cant-afford-1764868
I'm not against LVMH--in fact, it's probably going to be a very good year for such brands given the Trump crowd, who will revel in non-sustainable materials and rigid social status cues. Seriusly, now is probably the best time to buy it. But LVMH won't be able to straddle the fence. And as long as Daan says the numbers are good I would NEVER argue with that. I just wanted to share some qualitative research and some observational insight while not doing any real concrete work at all. (I am a qualitative researcher and a marketing strategist newly in charge of my own portfolio--I know nothing).