Is the product being sold at a premium price point? It appears to be a deliberate strategy employed by luxury brands.

Astute consumers have increasingly noticed that more and more news headlines are focused on the prices of luxury goods.

For instance, Vogue website reported on June 26th about Louis Vuitton 's new men's creative director, Pharrell Williams, launching a yellow crocodile skin Speedy handbag with a headline that read, "Millionaire Handbag! Pharrell's Louis Vuitton Speedy Handbag Always by His Side, Valued at One Million Dollars?"

Recently, HYPEBEAST , a trend media outlet, published an article titled, " Bottega Veneta 's Latest Plastic Woven Cabat Handbag Will Cost You $10,000."

Two months ago, Highsnobiety , another trend media outlet, wrote an article on the price of CHANEL 's F1-themed T-shirt, causing a stir on the internet. The specific price was revealed in the article, and Highsnobiety put in considerable effort to obtain the exact price of this popular T-shirt.

The article mentioned that a $1000 Prada Group white vest is now being overshadowed by a new expensive fashion item in the city – the Chanel F1 Formula 1 T-shirt, which is a small embroidered T-shirt with a four-figure price tag.

The piece then traced the T-shirt's popularity process, starting with it being showcased as part of Chanel's F1-inspired 2023 Spring/Summer collection in late May, which sparked discussions on social media. Many key opinion leaders (KOLs) were seen wearing the T-shirt at the Monaco Grand Prix on May 28th. When consumers tried to buy the same T-shirt, they were surprised by the price.

The article teased further, "So, how much does Chanel's F1 T-shirt actually cost?" Various videos indicated that the retail price for the F1 T-shirt was around $4,500, but some TikTok influencers claimed it could go up to $10,000. Another video stated that the shirt's price was €5,345.

Highsnobiety finally confirmed the price with Chanel, revealing that the F1 T-shirt is priced at $4,450. "For a simple T-shirt, that's a significant amount of money! And that's the standard version; the beaded version of the Chanel T-shirt is priced at over $6,000."

It seems that creating hype around the price of a simple T-shirt is a big deal. This practical discussion appears to have shattered the filter carefully crafted by luxury brands over the years, focusing on craftsmanship and ideology.

Nonetheless, in the era of interactive social media, luxury brand prices have become one of the most engaging topics in the fashion world, capturing readers' attention and encouraging active participation in discussions. Based on my experience, price-sensitive Chinese consumers, in particular, pay significant attention to luxury product prices.

On the platform Little Red Book, a post from July 22nd asked, "Chanel's 2023 new bags are here! Are the prices real?" and received nearly 2,000 likes and comments. The price of the Chanel 22 handbag, which was listed at ¥68,800, surprised many users.

It is only natural for consumers to care about prices, as they are directly related to their consumption decisions and offer insight into a brand's perceived value.

However, it's worth noting that luxury brands have not historically placed prices in such prominent positions. In the past, before luxury brands ventured into e-commerce and social media platforms, finding the price of a product was not easy for consumers.

Luxury brands often refrain from displaying prices on their official websites for several reasons. One is that these brands often sell unique or limited-edition products that are challenging to price. Additionally, many of these brands cater to high-end clientele who may not be price-sensitive. Finally, by not displaying prices, these brands can create a sense of exclusivity and luxury, attracting their target audience.

During that time, fashion magazines played a crucial role as information mediators, providing insights into fashion trends and movements, and sometimes discreetly disclosing price information. Observant readers of fashion magazines might notice that product brand names and prices were sometimes included in the captions, while some limited-edition products were marked as "price upon request."

Back then, prices had little significance within the fashion content ecosystem. They were secretive and required consumers to visit the stores to learn the specific prices, making it less of a focal discussion topic. Luxury brands hoped to sell to customers who didn't bother to check price tags.

However, in the past decade, with the commercial expansion of luxury brands, a broader target audience of new wealth and the middle class, and the fundamental transformation of information dissemination through the internet, prices have gradually become central to the conversation.

Platforms like Little Red Book have accelerated the flow of information. Fashion magazines are no longer the sole source of price information, as shopping experiences and word-of-mouth have bridged the information gap. Brands now openly display prices on their official websites and even offer online purchasing options, enriching consumers' channels for information access and allowing them to make informed decisions before visiting physical stores.

For the middle-class consumers, the abundance of information channels has made the luxury consumption experience more relaxed. By obtaining product and price information in advance, luxury brands no longer seem inaccessible. Discussing and engaging with prices have become rational expressions rather than embarrassing taboos.

One could say that the transparency of price discussions has driven the middle-class consumer force to join in luxury consumption, contributing to the exponential growth of luxury giants' business over the past decade.

The prominence of luxury goods' pricing reached its peak during the three years of the pandemic. Faced with the indiscriminate impact of the pandemic on the market, luxury brands collectively made decisions to increase prices, citing rising supply chain costs. Initially, the market accepted the price increases during this extraordinary period. However, a series of significant and aggressive price hikes by top luxury brands like Chanel in the following three years drew market concerns.

When looking back at the luxury industry during the three years of the pandemic, "Chanel price hikes" might be the most widely recognized industry change, with no other brand daring to match the frequency and magnitude of price increases. While Chanel continued raising prices despite consumer surprise, complaints, attention, and discussions, the brand's performance steadily climbed, creating a unique phenomenon in the industry. This prompted both the mass market and the fashion industry to contemplate and scrutinize luxury pricing mechanisms.

The market gradually recognized the true intention behind the price increases. It was not solely due to a superficial rise in supply chain costs but rather a deliberate commercial strategy to differentiate the brand. The radical price increases of the past three years have established a unique business strategy for Chanel.

The pricing issue has consistently generated discussions around Chanel, engaging not only those who buy the products but also those who are interested in the brand. As prices rose, people seemed more eager to buy, especially among those seeking luxury goods without considering price tags.

If we take a look at the luxury market during the past three years, Chanel's aggressive price increases might be the most widely recognized industry change, with no other brand daring to match the frequency and magnitude of price increases. While the mass market appreciated Chanel's continued dedication to its pricing strategy, it also caused concerns.

Looking back at the luxury industry during the pandemic years, "Chanel price hikes" might be the most visible industry change. No other brand has matched Chanel's frequency and magnitude of price increases. While consumers expressed surprise and complaints, their continued price hikes made Chanel's performance soar, creating a unique phenomenon in the industry. This also prompted both the mass market and the fashion industry to contemplate and scrutinize luxury pricing mechanisms.

The market gradually recognized the true intention behind the price increases. It was not solely due to a superficial rise in supply chain costs but rather a deliberate commercial strategy to differentiate the brand. The aggressive price increases over the past three years have established a unique business strategy for Chanel.

The pricing issue has consistently generated discussions around Chanel, engaging not only those who buy the products but also those who are interested in the brand. As prices rose, people seemed more eager to buy, especially among those seeking luxury goods without considering price tags.

The prominence of luxury goods' pricing reached its peak during the three years of the pandemic. Faced with the indiscriminate impact of the pandemic on the market, luxury brands collectively made decisions to increase prices, citing rising supply chain costs. Initially, the market accepted the price increases during this extraordinary period. However, a series of significant and aggressive price hikes by top luxury brands like Chanel in the following three years drew market concerns.

If we review the luxury industry during the pandemic years, "Chanel price increases" might be the most widely recognized industry change, with no other brand daring to match the frequency and magnitude of price hikes. While Chanel continued raising prices despite consumer surprise, complaints, attention, and discussions, the brand's performance steadily climbed, creating a unique phenomenon in the industry. This prompted both the mass market and the fashion industry to contemplate and scrutinize luxury pricing mechanisms.

The market gradually recognized the true intention behind the price increases. It was not solely due to a superficial rise in supply chain costs but rather a deliberate commercial strategy to differentiate the brand. The aggressive price increases of the past three years have established a unique business strategy for Chanel.

The pricing issue has consistently generated discussions around Chanel, engaging not only those who buy the products but also those who are interested in the brand. As prices rose, people seemed more eager to buy, especially among those seeking luxury goods without considering price tags.

In essence, high prices themselves have become a proactive marketing tool for luxury brands. In addition to Chanel's adept handling of pricing issues, Balenciaga also stirred the market by revealing a complete price list for its high fashion collection shortly after its 52nd Balenciaga haute couture collection release.

According to the brand's official website, a red chiffon half-skirt is priced at €100,000, composed of 800 ribbons and taking 160 hours to complete. The mole fur coat is priced at €40,000, the Spencer jacket at €70,000, and the matching skirt at €60,000. The Coup de Vent black and gray checkered coat is priced at €40,000, and a pair of coated leather pants costs €25,000.

The collection also includes some expensive accessories, such as the Regata gold-plated custom sunglasses priced at an astonishing €20,000, the golden brass Rivoli pendant at €20,000, and the Opera Pump pants and shoes priced at €15,000.

Reportedly, the Balenciaga haute couture collection can only be pre-ordered at the brand's boutique located at 10 Avenue George V, Paris. This exclusive boutique accommodates only 12 customers a day, with one customer served at a time.

For such scarce and expensive haute couture collections, the purpose of disclosing prices is largely to generate discussions and interest in the market. At the same time, the brand aims to redefine luxury goods and even haute couture through a sense of contrast.

In contrast to luxury goods that may appear expensive and labor-intensive, these seemingly ordinary daily clothing items, like Bottega Veneta's imitated denim pants or flannel checkered leather jackets and Balenciaga's daily-style haute couture, tap into consumers' desire to flaunt their ability to spend lavishly on seemingly insignificant items.

Recently, luxury brands have released the most basic logo white vests. Prada's 2022 Autumn/Winter triangular emblem vest is priced at $1,000. Loewe's logo vest became one of the hottest items in the second quarter of this year, and Saint Laurent launched a ribbed vest for $550 on July 25th. Despite their ability to maintain their shape, people are well aware that they are still just white vests.

The author of Highsnobiety noted that one of the most intriguing aspects of fashion is that it is not always meaningful. One minute, you might come across an eccentric collaboration project involving Crocs clogs and MSCHF giant yellow boots, and the next minute, JW Anderson releases a handbag resembling a frog. Untrained eyes might not fully comprehend the intentions behind such product releases, but they provide joy for fashion enthusiasts.

In today's era, fashion continues to evolve in both commercial and cultural aspects, making prices difficult to be governed by a fixed mechanism and not solely determined by traditional factors like craftsmanship or labor. Fast fashion maximizes imitations of luxury goods, while luxury brands derive inspiration from everyday items. The transformation of social productivity has broken the certainty of pricing mechanisms.

The rebellion of Bottega Veneta's plastic handbags lies not only in using everyday plastic materials to subvert the brand's classic leather tradition but also in its counterintuitive pricing.

Luxury brands are seemingly generous in demonstrating their investment in brand value and culture through lavish marketing budgets. However, those few winners who outperform the market subtly reveal that high prices don't need justification; the high price itself is the reason.

In 2021, a study published in the Journal of Business Research by Joel-Noël Kapferer and Pierre Valette-Florence showed that the pursuit of high quality is not the driving force for consumers to buy luxury goods, but high prices are crucial in driving consumer demand for luxury brands.

The study suggests that high luxury prices are unrelated to tangible benefits, and price is not a clue to costs or quality. It is, in itself, a source of consumer satisfaction or pride. Prices reflect individuals' financial and cultural capacity to pay significant amounts for non-necessities.

The role of prices is to showcase the cost paid by individuals to establish a connection with a prestigious brand. High quality, craftsmanship, and sustainability, while accepted by society as supporting factors for high prices, are not as critical as the expensive price itself.

Classical economics follows the principle that higher prices lead to lower demand, but luxury goods behave differently. Buying high-priced luxury goods can satisfy consumers' psychological needs for status and uniqueness. Purchasing luxury items makes consumers feel like exclusive members of a tribe.

"Luxury goods are like the Janus with two faces: one face looks inward, seeking self-reward in the form of high quality, pleasure, hedonism, and great experiences. The other face looks outward, seeking social recognition and exclusivity. Only the latter is nurtured by high prices. One of our direct conclusions from the study is that the luxury industry must use this second face to maintain its continuously rising price policy."

In other words, aggressive price increases do not diminish demand for luxury goods, provided brands have the courage to maintain high-price policies, like Chanel, making consumers believe it represents high prices.

Luxury brands appear to demonstrate generous investments in brand value and culture through lavish marketing budgets. However, those few winners who outperform the market subtly reveal that high prices don't need justification; the high price itself is the reason.

In 2021, a study published in the Journal of Business Research by Joel-Noël Kapferer and Pierre Valette-Florence showed that the pursuit of high quality is not the driving force for consumers to buy luxury goods, but high prices are crucial in driving consumer demand for luxury brands.

The study suggests that high luxury prices are unrelated to tangible benefits, and price is not a clue to costs or quality. It is, in itself, a source of consumer satisfaction or pride. Prices reflect individuals' financial and cultural capacity to pay significant amounts for non-necessities.

The role of prices is to showcase the cost paid by individuals to establish a connection with a prestigious brand. High quality, craftsmanship, and sustainability, while accepted by society as supporting factors for high prices, are not as critical as the expensive price itself.

Classical economics follows the principle that higher prices lead to lower demand, but luxury goods behave differently. Buying high-priced luxury goods can satisfy consumers' psychological needs for status and uniqueness. Purchasing luxury items makes consumers feel like exclusive members of a tribe.

"Luxury goods are like the Janus with two faces: one face looks inward, seeking self-reward in the form of high quality, pleasure, hedonism, and great experiences. The other face looks outward, seeking social recognition and exclusivity. Only the latter is nurtured by high prices. One of our direct conclusions from the study is that the luxury industry must use this second face to maintain its continuously rising price policy."

In other words, aggressive price increases do not diminish demand for luxury goods, provided brands have the courage to maintain high-price policies, like Chanel, making consumers believe it represents high prices.

In conclusion, the focus on luxury goods' pricing has transformed the way consumers interact with luxury brands. Prices, which were once hidden and difficult to access, have now become a central topic in the fashion world, thanks to the era of interactive social media.

Luxury brands have embraced this transparency, using pricing as a leveraging tool. Today, prices are not merely the outcome of a set of fixed conditions; they have become a crucial element in constructing luxury goods. By offering rich information channels, luxury brands cater to the needs of middle-class consumers, making luxury goods more accessible and enabling rational discussions about pricing.

Therefore, the transparency of price discussions has stimulated a surge in luxury consumption by the middle class, driving exponential growth for luxury giants over the past decade.

This research has raised concerns and debates among both the general public and the fashion industry. Chanel, in particular, has become a representative example of a brand that dared to continuously raise prices and stand as a symbol of high-priced luxury. The focus on pricing has transformed the way consumers interact with luxury brands, driving a surge in luxury consumption by the middle class and contributing to the exponential growth of the luxury industry over the past decade.

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