Abundant rarity: The key to luxury growth
Abstract
Although Western economies have not yet transitioned out of crisis, the luxury sector is growing again, especially at the high end. In emerging countries, the luxury sector''s expansion has reached double digits. However, as luxury products continue to penetrate global markets, the prestige of brands like Louis Vuitton has not declined at all. This seems at odds with the concept of luxury being tied to rarity and exclusivity. Thus, how can we reconcile these facts with theory? In order to capture mounting demands--not only from extraordinary people, but also from ordinary individuals--luxury brands enact virtual rarity tactics, construct themselves as art, and adopt a fashion business model while deemphasizing exceptional quality and country of origin. Rarity of ingredients or craft has been replaced by qualitative rarity. Further, the cult of the designer is a potent tool in building emotional connections with a vast number of clients. Today, brands in the luxury sector are actually selling symbolic and magic power to the masses. There exists a culture gap between Asia and the West; namely, Asian consumers feel safer buying prestigious Western brands with which individuals around them are familiar. The insights offered herein provide clues for entrepreneurs attempting to launch luxury brands.