While there’s the widespread availability of affordable goods and services, many of us continue to pursue luxury. It may not seem logical to others, but to some, they prefer to spend their hard-earned money on luxury items and services.
Why so? Are the most expensive things in life always better? Is designer clothing always of better quality?
Take the Bvlgari watch prices for example. Although they’re on the luxury side, the brand has a huge following who would be willing to spend that much. Ask them why and they’re likely to tell you that they’re paying for the name of the brand and the quality it has to offer.
In this article, we are covering the reasons why people are willing to spend big on luxury items.
Why Are We After Luxury?
Consumers buy branded products for plenty of reasons—from having brand loyalty to wanting to fit into society or portray a certain image.
Quality: Over time, consumers develop loyalty and trust in brands that consistently provide high-quality products and experience. They are essentially emotionally-attached to them, which prompts them to spend more on their products and services.
Confidence: Additionally, there are also people who are investing in expensive items, hoping that would provide good quality and experience. They buy a brand new, high-end laptop hoping that it works efficiently as well as luxury bags, watches, and other items, hoping they would last for several years.
Authenticity: Another reason why people are more willing to pay full-price for authentic products is that counterfeit ones just don’t cut it, regardless of how they seemingly look identical. The memory or feeling that comes from purchasing genuine luxury goods is part of the reason why we are after authenticity.
Social Acceptance: While it may sound absurd, people are also predisposed to buy brands because they think these luxury products will contribute to greater social acceptance, allowing them to fit in society and trends. This much is true in fashion.
Investment: For those who can afford it, investing in luxury goods provides an attractive alternative to investing in traditional options such as real estate, stocks, and bonds. They grow in value over time, while offering the benefit of instant gratification.
Are Luxury Items Worth It?
While they come with a hefty price tag, it can be justified by their quality, production costs, and brand value, to name a few. They are also often produced in limited quantities, making them more appealing to those who can afford it.
Quality: We can’t stress enough that branded items are often better than non-branded or counterfeit ones. With branded clothes, watches, and bags, high-quality materials are used to ensure their longevity and durability.
Production Costs: Most famous brands are in Europe, where labour costs are higher, and the materials and technology are strictly controlled. These factors are reflected in the price tags of their products.
Brand Value: Aside from the materials and labour, you’re also paying for the brand’s name and their reputation. It’s why it’s not impossible to find branded products that are significantly pricier than other products within the same range.
Limited Production: Luxury brands intentionally keep their products in limited quantities to increase their value and maintain a level of exclusivity. Another reason is that most luxury brands today are still assembled and finished by hand. This much is true for watches.
Throughout its 180-year history, Swiss luxury watch brand, Patek Philippe, is known to have only produced less than a million watches. Such small-scale production explains why luxury watches earn a high retail value.
Why do we pay hefty prices for brands? Is it better quality or to associate yourself with the stature of the brand in society? It’s maybe a combination of both.
It’s not hard to understand why people are excited by the thought of buying luxury goods—there is a sense of prestige and quality attached to them and they offer a possibility of investment returns. Luxury brands charge a lot for their products because there is already a market for it.
Would you buy yourself a luxury item? Why or why not? Let us know in the comment section below. Don’t forget to share this article with your friends, too!