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.

Having analysed almost every model of luxury branding for my PhD thesis, I ultimately decided that Dubois and Paternault’s model was being the most complete and explanatory power. D&P propose 6 attributes of luxury brands:

They are:

extreme quality
expensiveness
scarcity
aesthetic appeal
superfluousness
and time incorporation

Despite being an excellent distillation of the nature of luxury brands, these criteria are clearly insufficient to explain the full range of luxury experiences.

Superfluousness is clearly a ‘qualifying criterion’ for luxury. That which is needed cannot, de facto, be luxury. But all the other criteria are open to challenge at some level.

Extreme quality, for example can be challenged by brands whose quality is utterly questionable - TVR sportscars, for example or more pertinently, Ferrari itself.

Expensiveness is less open to debate. Even allowing that expensiveness is a relative term, both in competitive terms, and from the perspective of the individual, some luxury brands are not differentiated on price.

Examples here would be brands that pull of the trick of becoming discretionary, while being functionally similar. These are brands that attract the attention of connoisseurs by branding heavily on the basis of being ‘an acquired, specialist taste’. In spirits, for example, limited release batches, or special finishes can be luxury brands, without necessarily being more expensive. From a marketing strategy the point is to sell greater volume to heavy users rather than increase margin on individual units.

Another example would be limited release handbags, or signed copies of books, which are luxury because they require effort and expertise on the part of the brand purchaser.

Scarcity is a very marginal criterion and has been widely challenged in branding literature. In the east social ubiquity does not undermine perceived brand cachet at all. In the west the growth of masstige brands like Molton Brown cosmetics has been dramatic.

The value of aesthetics is superficially the weakest criterion. We can all think of brands who have brutal aesthetics – Bristol, Hummer cars or Toughbook computers spring to mind, but they are still luxury on other measures. These sort of brands do at least have distinctive aesthetics, though, which appeal to connoisseurs, and lean on their brand heritage – but consider Lexus. Definitely a low-level luxury brand, but with zero aesthetic appeal.

The most intriguing category is ‘time incorporation’. When people talk about craftsmanship, or discuss a designer’s style, or talk about the quality of the purchase experience, this is what they are alluding to. Luxury brands compress and distill the process of design, manufacture and ownership of a product into their relationship.
When individuals buy a Ferrari, they buy 60 years of racing heritage. When they buy Chanel, they engage in nostalgia for a bygone age.

Based on Dubois & Co’s criteria, I wonder what the world’s most luxurious brand is…Rolex? or Patek Philippe? Linn Hi-Fi?