In our semiotic society, luxury brands deliver the ultimate sense of individuality and personal identity as emulated in products and services we choose.

Historically the luxury category survived by providing products which could not be had by everyone. These were distinguished by their scarcity, rarity, design excellence, classicism and cost. Luxury was the province of the rich, or a unique occasion for those who normally could not afford it. For years luxury was also the territory of those who could distinguish it. In times of recession, luxury brands pursued textbook strategies to survive: narrowing licensing, consolidating retail and messaging, reissuing heritage designs, limiting production, brand extensions.

Mass communications, marketing, media and the internet transformed the category. The earliest phenomenon was the segmentation of luxury into distinct levels spanning high-end house brands to premium luxury, with multiple gradations in between. Hijacked brands such as Hummer also entered the luxury marketplace, adopted by constituencies never imagined or solicited by their creators. More recently the category realized that consumers wanted affordable luxury, opening the market to new products like premium chocolates and coffee, that is, commodities with luxury attributes, but at the accessible price point.

Internet-based supply chain solutions enabled mass customization later in the supply side process – apparel and footwear retailers like Lands End, Converse and Brooks Brothers now offer affordable product tailored to customers unique specifications of measure and material, formerly the exclusive domain of luxury. With luxury so widely available to the mass market, demand has increased for low-tier luxury, evidenced by the $500 billion of counterfeit luxury goods trafficked yearly. The high end now demands what IHT Style Editor Suzy Menkes recently characterized as ‘extreme luxury’, aspirational products at the tipping point of price, production and quality.

A good deal of inventiveness has been observed in the creation of brand extensions in the category, which currently is experiencing a thriving market. A fine example is Bulgari, who have applied their mark to fragrance and eyewear (the first classic brand extensions of couture), a resort, a car, and a commissioned romance novel featuring a string of Bulgari pearls as the main character.

The luxury category exhibits hybrid behavior, in that their innate constraints – the expression of heritage values- cannot be easily surrendered without devaluing or transforming brand perception. Witness Gucci and Saint Laurent, once languishing, now revived, but not at the expense of their heritage. Luxury is Darwinian. The original attributes must remain, but in peaceful coexistence with all-important brand innovation.

Stanley Moss is the founder of Diganzi, the international brand consultancy. You may also be interested in reading Jack Yan’s thoughts about luxury.