Luxury Brands : Are consumers paying for higher quality or simply the name brand?
- Personal Finance for Teens
- 31 minutes ago
- 3 min read
By : Isabell Huang
Editors: Amie Jin and Jerry Lin
Wandering around American Dream Mall, one may often encounter a seemingly more secluded sector of the shopping center – an area filled with sleek brand names and shinier floors. Although a part of the same mall, one often feels transported into a completely different world. Luxury wings in malls are one of the many tactics designer brands utilize to elevate their brand image and tap into customer psychology.
These upscale companies take advantage of human vulnerabilities that yearn for desires of self-elevated images. The ID in Freudian theory, the part of our minds that relies on primitive desires, helps to explain this mind game played by luxury brands. To start, these companies use a value-based pricing model where they allow the perceived value of their product to dictate pricing strategies. Oftentimes, businesses have the ability to control their products’ desirability through marketing tactics that target irrationality, scarcity, and prevailing consumer trends that equate higher prices with higher quality.
The first point to understand is the consumers. Every brand may hold various customer segments, but the general audience for designer brands ultimately consists of emotional beings. Thus, like any human, customers have pain points that may lead to irrational decision-making. In particular, by the second quarter of 2025, adults in America carried a grand total of $1.21 trillion in credit card debt. This consumer culture has created circles around swiping when spending, even though many may lack the financial stability to afford these goods. Many believe that the risks of this game are worthwhile if their image may be boosted. This feeling contributes to self-esteem, giving average people a taste of what it is like to feel like a celebrity or even their boss at work. Consumers also often hold the common misconception that higher prices directly lead to increased quality in goods. This is not necessarily the case; oftentimes, a watch priced tenfold lower than a Rolex performs the same function at a similar quality level.
The next component to analyze is the marketing schemes of these luxury brands. One of their main tactics include taking advantage of a sense of “exclusivity.” This works because people value having things that others may not have the chance to obtain, things that are “one-of-a-kind.” To create this stigma around a product, companies choose to offer limited-edition collections, cap their products at a certain number, or even host experiences catered to select groups. This, in turn, drives further enthusiasm in the reselling industry, racking up prices as an item becomes more exclusive. These companies also carefully choose a story to tell. Essentially, their brand image is what speaks for the company when they are not present in the room. Thus, it is key for them to have values, history, and goals that align with visible trends to grow a stronger connection with their intended audience. Moreover, this storyline may be added with the craftsmanship involved in the brand. For instance, Hermès emphasizes handcrafted Birkins, each one uniquely designed. Finally, taking the customer experience into account is one of the most powerful marketing strategies a luxury brand can use. They are selling more of a feeling than anything else. From the packaging to how the workers dress, each detail is intentional when it comes to designer brands.
What many may not realize is that there is also a hierarchy within luxury brands. This demonstrates that there will always be a higher sense of status to obtain through these materialistic symbols of wealth. This evolution of luxury goods is often pushed by the rise of technology and the influence of social media. Because of new technological advancements, the luxury market is expected to grow further in the coming years. With such extensive exposure to public opinion, people become increasingly conformist to the constructs of luxury branding. It is important to keep in mind when shopping that these goods are wants, not needs. They do not actually raise one’s status; instead, they are pulling communities down and contributing to erosion of generational wealth. The next time you place that designer bag on your wishlist, think about whether or not you would actually purchase the item if it was completely absent from social media and the internet.
Works Cited
“Average American Credit Card Debt 2025 Statistics.” Academy Bank, 2025, https://www.academybank.com/article/average-american-credit-card-debt-2025-statistics.
Fany. “Luxury Fashion: Its Hierarchy, History and Ever-Changing Face.” TFR, 14 Feb. 2022, https://tfr.news/articles/2022/2/14/luxury-fashion-its-hierarchy-history-and-ever-changing-face.
Page, Vanessa. “The Psychology Behind Why People Buy Luxury Goods.” Investopedia, https://www.investopedia.com/articles/personal-finance/091115/psychology-behind-why-people-buy-luxury-goods.asp.
Shopify Staff. “Luxury Marketing: Tactics, Tips, and Real-World Examples.” Shopify Blog, https://www.shopify.com/blog/luxury-marketing.
Voyer, Benjamin. “Is Luxury Still Worth It? Luxury Brands Try to Justify High Prices.” Forbes, 21 Jan.
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