In a recent MBA class I was teaching on luxury at Pepperdine’s Graziadio Business School in Malibu, I asked the students to brainstorm what creates “extreme value,” — a two-word definition that I believe describes luxury with high precision from a client perspective. Their answers included uniqueness, quality, emotional appeal, connection to history and cultural heritage, visual appeal, creating memories, limitation, and a symbol of status.
I challenged my students to “translate” these aspects even more into a client-centric benefit. Why does uniqueness, quality, etc., create value? Their answers were far more interesting and exciting as they tapped closer into the real value creation model of luxury, or what I defined as ALV (Added Luxury Value) when I first presented the concept in my doctoral thesis “Decoding Luxury.”
They came up with expressions like “you become one of the few who has access to something special,” “makes people feel connected with a moment in time,” “luxury changes someone,” “it gives you confidence,” and “it makes you feel elevated.”
Like the students in their first attempt, managers often default to the tangible, highlighting quality, craftsmanship, and heritage (hence a brand story of “we...”). However, they forget that at the receiving end there is a client, whose desirability and willingness to pay depend on the translation of the tangible into the intangible, the translation of product-specific assets into feelings (hence a brand story of “you…”).
This explains why so many brands, despite their high price points, end up in the sea of sameness. They fundamentally do the same things and have very similar ways of communicating, making them gradually losing touch with their increasingly young and discerning audiences. And by not appealing to Gen Z, many brands are putting their future at risk. Brand preferences are built early, so hoping that Gen Z will connect with them later in life (“when they grow up,” as seasoned luxury mangers often tell me) just because a brand self-centeredly talks about quality is foolish.
Therefore, it’s worth looking at a brand that is excellent in brand storytelling, Hermès, and its most iconic product: the Birkin bag. This masterpiece of luxury branding combines exceptional craftsmanship with a narrative that captures the imagination and creates unparalleled desirability, resulting in astronomical price points that clients all over the world are more than willing to meet. So, what’s the secret?
The Birkin bag is not just a bag. It is a story. Its narrative is inextricably linked to its namesake, Jane Birkin, the English actress, fashion icon, and singer. The story goes that Jean-Louis Dumas, Hermès' chief executive at the time, was on a flight with Birkin when he noticed her struggling with her then-iconic beat-up basket which she used everywhere. They talked, and she expressed her difficulty in finding a practical leather bag she liked.
Inspired, Dumas designed a bag for her — a bag that eventually bore her name. The spontaneous and intimate nature of this story, and the fact that Birkin was willing to give up her basket for the bag, created a sense of authenticity and a once-in-a-lifetime moment, essential attributes in the realm of luxury.
Importantly, the storytelling does not stop there. It extends to every aspect of the Birkin bag's creation. Every Birkin is handcrafted by a single artisan, a process that can take multiple days. Unlike many other brands that only speak in abstract terms about quality and craftsmanship, this narrative of human-centric artistry imbues each bag with individuality and uniqueness, where no two bags are ever exactly the same. It also justifies the bag's high price point. After all, customers aren't just purchasing a product; they're investing in a piece of art.
Hermès also taps strongly into cultural storytelling. Celebrities and young affluent influencers, from K-pop stars to fashion icons, are frequently seen with Birkin bags, contributing to the bag's image as a symbol of success and sophistication, especially among younger clientele. The long wait times and obscure waiting list process that favors VICs only adds to the allure. The Birkin is not just a bag but an embodiment of aspiration, a testament to the power of exclusive luxury storytelling.
The Birkin isn't merely an iconic accessory — it's a narrative that speaks of culture, art, desire, and above all, luxury. It underlines the necessity for luxury managers to think beyond the product and beyond the category. Do you have full clarity of the cultural capital your brand creates? Do you know which emotion your brand should evoke? And do you have a narrative-based brand ecosystem that is client-centric and creates extreme value?
Only then can you fully tap into the potential of your brand and only then will you be relevant for the next generation of luxury clients.
This is an opinion piece where all views expressed belong to the author.
Named one of the “Global Top Five Luxury Key Opinion Leaders to Watch,” Daniel Langer is the CEO of the luxury, lifestyle and consumer brand strategy firm Équité, and the executive professor of luxury strategy and pricing at Pepperdine University in Malibu, California. He consults many of the leading luxury brands in the world, is the author of several best-selling luxury management books, a global keynote speaker, and holds luxury masterclasses on the future of luxury, disruption, and the luxury metaverse in Europe, the USA, and Asia.
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