Luxury did not begin with logos or influencer campaigns.
Historically, luxury was about power.
For centuries, luxury goods were reserved for royalty and aristocracy. In parts of Europe there were even laws that regulated who could wear certain fabrics, colours, or materials. Silk, fur, and gold embroidery were not simply fashion statements. They were symbols of social hierarchy.
Modern luxury brands began to emerge in the nineteenth century, particularly in France and Italy. These brands were built on craftsmanship and exclusivity rather than mass production.
Louis Vuitton originally produced handcrafted trunks for Parisian elites. Hermès began as a saddlery serving European nobility. The value of these brands was not only the product itself but the story behind it.
Luxury has always been about distinction. Not just something expensive but something symbolic.
Three core elements defined the early luxury model.
Craft mastery and exceptional materials
Scarcity and limited availability
Heritage and cultural prestige
Those principles still shape luxury marketing today.
Why Luxury Breaks the Rules of Economics
Most products follow a simple economic rule.
As prices rise, demand falls.
Luxury does not follow that rule.
In luxury markets, higher prices can increase demand because price itself signals status and exclusivity. Economists call these Veblen goods.
The logic is psychological rather than practical.
If a product is expensive and difficult to obtain, owning it signals wealth, taste, and belonging to a particular social group.
Luxury brands therefore operate under a different set of priorities.
• Margins can exceed 70 percent
• Demand is intentionally restricted through limited supply
• Desire must consistently exceed availability
One of the most famous examples is the Hermès Birkin bag.
You cannot walk into a store and buy one. Customers typically need an established purchase history and sometimes a waiting list before they are offered the opportunity to purchase a Birkin.
In luxury, the product is not the bag.
The product is the status associated with being chosen.
The Four Ps of Luxury Marketing
The traditional marketing framework of Product, Price, Place, and Promotion still applies to luxury brands. The difference is how those levers are used.
Product: Story and Craftsmanship
Luxury products are designed to communicate quality without explanation.
The product carries a story. Often rooted in heritage, craftsmanship, or cultural relevance.
Examples include:
• Artisan leatherwork from family workshops in Italy
• Watches assembled by master craftsmen in Switzerland
• Fashion houses referencing decades of design heritage
Luxury products tend to be timeless rather than trend driven. They are meticulously finished and often backed by narratives about origin and authenticity.
However, many luxury brands have diluted this principle by expanding into entry level products such as perfumes, accessories, and branded merchandise. While these products increase revenue, they risk weakening the aura of exclusivity.
Price: Strategic Theatre
Luxury pricing is rarely about production cost.
It is about positioning.
High prices reinforce status and exclusivity. Discounting undermines the perception of prestige.
This is why some luxury brands destroy unsold inventory rather than selling it at reduced prices. Maintaining brand perception is more valuable than clearing stock.
Premium brands such as RM Williams maintain pricing discipline for this reason. By avoiding discount cycles they protect long term brand equity.
However, in recent years many luxury brands have pushed prices aggressively higher. Post pandemic price increases have sometimes outpaced improvements in quality, leading consumers to question whether the value still justifies the cost.
Place: Controlled Distribution
Luxury distribution is tightly controlled.
Historically this meant flagship boutiques in prestigious retail districts such as Fifth Avenue, the Champs Élysées, or Collins Street.
The physical environment reinforces brand positioning. Luxury stores are designed as immersive experiences rather than simple retail spaces.
However, the digital era has disrupted this model.
Ecommerce platforms, resale marketplaces, and social media have made luxury more accessible than ever before. While this increases reach, it can also erode exclusivity.
The growth of luxury resale platforms such as The RealReal has added a new layer of transparency. When resale values drop, the perceived value of the brand can drop as well.
Promotion: Myth Building
Luxury marketing focuses less on direct selling and more on cultural storytelling.
Rather than buy now messaging, luxury brands use:
• Celebrity endorsements
• Cultural associations
• High fashion editorial imagery
• Long term brand narratives
Historically, royalty and aristocrats were the ultimate influencers. Later, film stars and athletes filled that role.
Today social media has democratized influence, but luxury brands still rely heavily on aspirational figures to signal status.
Promotion in luxury is less about product features and more about myth building.
The Tensions Facing Luxury Brands Today
Luxury brands are currently facing a number of structural challenges.
Overexpansion
Many brands expanded aggressively during the rapid growth of the Chinese luxury market. As economic growth has slowed, that expansion has become harder to sustain.
Overexposure
Logos and branded products became increasingly common during the 2000s and 2010s. When luxury items become ubiquitous, they lose their signaling power.
Aspirational consumer slowdown
The middle tier luxury buyer has pulled back as global cost of living pressures increase. This group previously drove much of the category growth.
Generational shifts
Younger consumers often prioritise experiences, sustainability, and individuality over visible status symbols.
For many luxury houses the challenge now is maintaining exclusivity while still achieving growth targets demanded by shareholders.
The Rise of Quiet Luxury
One of the most interesting shifts in luxury marketing is the rise of quiet luxury.
Quiet luxury rejects overt logos and conspicuous branding in favour of subtlety and insider knowledge.
A notable example is The Row, the fashion label founded by Mary Kate and Ashley Olsen. The brand avoids obvious branding, influencer campaigns, or mass marketing. Instead it relies on exceptional materials and restrained design.
The effect is that only people familiar with the brand recognise it.
Quiet luxury signals wealth without needing to shout about it.
This shift reflects broader cultural changes. Increasingly, status is communicated through taste and insider knowledge rather than visible logos.
Luxury Is Becoming Experiential
Another major shift is the move from ownership to experiences.
Luxury brands are increasingly investing in immersive environments and events.
Examples include:
• Formula 1 hospitality and brand activations
• Fashion week events and runway shows
• Luxury travel and dining collaborations
• Pop up experiences and private client events
These experiences are designed to be shared socially, amplifying the brand’s cultural relevance.
The goal is not just to sell a product but to create a moment that reinforces the brand’s prestige.
Luxury Brands in Australia and New Zealand
While Europe dominates the luxury landscape, Australia and New Zealand have produced a number of strong premium and luxury brands.
Examples include:
RM Williams, known for its heritage craftsmanship and iconic boots
Aesop, famous for minimalist design and highly curated retail environments
Karen Walker, recognised globally for distinctive fashion and eyewear
Zambesi, celebrated for avant garde New Zealand design
Deadly Ponies, known for high quality leather craftsmanship
These brands often lean heavily on authenticity, craftsmanship, and a strong connection to place.
In many ways that understated confidence aligns well with the emerging quiet luxury movement.
What It Is Actually Like to Work in Luxury Marketing
For many marketers, working for a luxury brand appears glamorous.
The reality can be quite different.
The industry is highly competitive and often underpaid relative to the prestige of the brand. The brand itself is part of the compensation.
Success in luxury marketing often requires:
• Exceptional client service skills
• Deep understanding of customer psychology
• Long term brand thinking rather than short term campaign performance
• A strong personal sense of style and cultural awareness
Many professionals begin in customer facing retail roles before moving into brand or marketing positions.
Those front line roles provide invaluable insight into the luxury customer experience.
What Marketers Can Learn from Luxury
Even if you do not work in luxury, the category offers powerful lessons for marketers.
Luxury brands remind us that:
Scarcity can increase demand
Storytelling can create emotional value
Price can reinforce positioning
Distribution control can protect brand equity
Experience can strengthen brand loyalty
Perhaps the most important lesson is discipline.
Luxury only works when brands resist the temptation to chase short term growth at the expense of long term prestige.
Once exclusivity is lost, it is extremely difficult to recover.
The Future of Luxury
Luxury marketing is entering a new phase.
The next generation of luxury brands will likely be defined by:
• Quiet design and subtle status signals
• Sustainable production and traceable materials
• Hyper personalised client relationships
• Experience driven brand engagement
The brands that succeed will be those that protect their mystique while remaining culturally relevant.
Balancing those forces will define the future of luxury.
Watch the Episode
If you want to dive deeper into how luxury marketing works and why it matters, watch the full episode of Canned featuring Ben van Rooy and Steph Quantrill.
You can also subscribe to the Canned Marketing Substack for weekly insights into marketing strategy, brand building, and industry trends.
Canned Marketing Substack
www.cannedmarketing.com
Ben van Rooy (Human Digital)
https://www.linkedin.com/in/benvanrooy/
Steph Quantrill (Cue Marketing)
https://www.linkedin.com/in/stephanie-quantrill/
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