Opinion: The brand is more important than the product

At a recent luxury summit in Venice, Italy, one panel talk in particular stood out. “Brand is more important than the product,” Alberto Galassi, the CEO of Ferretti Yachts, highlighted on stage. Regular readers of my column will note that this is a point I have also made for years. Yet, when I regularly audit many luxury brands, an estimated 90% of them have relatively generic positioning. In other words, the brand is not differentiated in the eyes of clients. This often sharply contrasts with an internal view of being unique. The reason for the mismatch? The internal focus is often on the products. Many brands are satisfied if they believe their products have different designs, materials, or features. For many luxury brands, the products themselves are often perceived as the centerpiece, the reason clients come and purchase. Iconic handbags, bespoke suits, limited-edition watches, and even yachts command attention and drive desire. Yet, in today’s hyper-competitive and social media-influenced market, it’s not the product alone that captivates consumers. The true essence of luxury lies in the story behind the product — in other words, what the brand stands for and its values. The brand story is what transforms a well-crafted and beautiful object into a symbol of culture, identity, and desire. This phenomenon is rooted in human psychology: people crave meaning, connection, and a sense of belonging. Only when a luxury brand presents a compelling and authentic story does it create extreme value. Success stories Consider the success of brands like Hermès, Chanel, Louis Vuitton, and Patek Philippe. Their products are undoubtedly exquisite, crafted with the finest materials and impeccable attention to detail. However, what truly sets them apart is their precise brand story, including the legends and myths that surround them. The Hermès Birkin is the most iconic handbag in the world and a piece of fashion history because of its origin and connection with the iconic Jane Birkin. Chanel’s No. 5 is more than a fragrance; it is an olfactory masterpiece with a century-old legacy that evokes the story, personality, and allure of Coco Chanel herself. Louis Vuitton inspires extraordinary journeys through each of its products. This was recently embodied in its iconic Core Values campaign, which featured Roger Federer and Rafael Nadal, and will culminate in the opening of the first Louis Vuitton hotel in Paris in 2026. Meanwhile, a Patek Philippe timepiece expresses the idea that you never actually own a Patek Philippe; you merely look after it for the next generation. This story of heritage and enduring value elevates the watch from a functional accessory to a treasured part of your own legacy. These examples show that brand storytelling goes far beyond advertising or marketing campaigns. When done right, a marketing campaign expresses the brand story, but it is never the story itself. This is where many brands fail to bring their brand values across. Their core values are often too vaguely defined, too interchangeable, and too product-focused. A marketing campaign expresses the brand story, but it is never the story itself. Instead, brands need to think more precisely about the role they play in their clients’ lives and the emotions they want to evoke, and then build the brand story around these elements. It’s not about the products A luxury brand devoid of a differentiating, client-centric story risks becoming a commodity. In an era where clients have more choices than ever before, the brand story becomes the critical differentiator and creator of extreme perceived value. It’s the story that creates an emotional connection, fostering brand loyalty and justifying premium prices more than anything else. The role of the products is critical, too; don’t get me wrong. The product is an expression of the story; it’s never the story itself. The product is an expression of the story; it’s never the story itself. The pushback I often get is that quality and craftsmanship are important. And I agree with that. However, in luxury, those are expected. No one buys a luxury item, independent of the brand, if the quality and craftsmanship are not excellent. They are a given. But they are not the value-creating differentiator — the story is. Moreover, the social media age has dramatically amplified the importance of storytelling in luxury. Social media platforms like Instagram and WeChat have become essential tools for brands to share their stories, engage with consumers, and create a sense of community. These platforms enable brands to showcase the inspiration and passion behind them. Luxury clients, particularly millennials and Gen Z, seek authenticity and transparency. They want to know the origins of their purchases, the artisans who crafted them, and the values the brand stands for. Over the last three to five years, one of the most dramatic shifts in luxury has been the transition to a reality where the ability to create cultural capital is becoming the most critical success factor. The brand story is at its core. When analyzing the performance of the most successful brands, they all share the ability to convey a differentiating brand story. In contrast, many of those in decline have category stories that are too focused on the product. At the luxury summit, Andrea Guerra, the CEO of Prada, made an important comment: a long-term view is critical in luxury. Brand stories should never be reactions to trends or attempts to please audiences; rather, they should be the expression of long-term core values, able to inspire clients and create desirability. For many brands today, it could not be more urgent to refocus on brand storytelling. They must recognize that while the product may attract attention, it is the story that captures hearts. Brands that master the art of storytelling will not only survive but thrive, creating lasting emotional bonds with audiences beyond the materiality of their products. This is an opinion piece by Daniel Langer, CEO of Équité, recognized as one of the “Global Top Five Luxury Key Opinion Leaders to Watch.” He serves as an executive professor of luxury strategy and pricing at Pepperdine University in Malibu and as a professor of luxury at NYU, New York. Daniel has authored best-selling books on luxury management in English and Chinese, and is a respected global keynote speaker. Daniel conducts masterclasses on various luxury topics across the world. As a luxury expert featured on Bloomberg TV, Forbes, The Economist, and others; Daniel holds an MBA and a Ph.D. in luxury management, and has received education from Harvard Business School. Sign up for his masterclasses at the Jing Academy. Follow him: LinkedIn and Instagram. All opinions expressed in the column are his own and do not reflect the official position of Jing Daily.

Opinion: The brand is more important than the product

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Published May 27, 2024

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Opinion: The brand is more important than the product