On scarcity:
People don't care about supply. They care about the derivative of supply.
* Takes 18 hours to hand-make
* Artisans require 2 years of training
* Trainees are hired from a prestigious leather-making school
* Meticulous inspections that, if failed, result in the bag being destroyed
Birkin"
"The only thing Hermès wants you know about the
bag’s availability is that you probably can’t get one.”
Boutiques don't know how many they'll get. Hermes doesn't publish sales numbers.
World record: $300K diamond-studded Birkin sold in 2016 by Christie's
"Hermès makes up about "90% of Heritage's luxury accessory category’s business."
“Chanel has always done well in the secondary market, and we also sell Gucci and Balenciaga, but Hermès clearly is the leader" - Christie's
This is like Supreme (box logo sells out in <1s, bunch of other stuff sits) or Yeezy/Adidas.
Long Birkin, short/be the bankers?
[Birkin] prices by between 5% and 10% annually for a new bag.” and starts around $7K
Well used bags retain 80% of value, if in great condition 100%+ (curious whether mostly due to retail price inflation.. will hopefully find out)
That's why Hermes limits even their best clients to 2 bags per person per year (allegedly). Must have a good KYC provider :)
up to 90% of all Hermès Birkin bags sold online aren’t the genuine article.”
You'd think this is bad but I'm not sure. Some would say it costs the brand millions every year but it also reinforces the brand narrative? Wyt?
1) Tactics to drive demand
2) Winner takes all-ish market
And the resulting:
3) A bag as a store of value
* Supply is not known! Market believes demand will sustain/grow
* Participation in status games offer utility to buyers (conspicuous consumption)
* Market for Birkins is meant to be inefficient
And one on Hermes getting into digital (but keeping Birkins off the site):
ingentaconnect.com/content/intell…
This is a pretty big risk. I thought a few times while reading "I should buy some Birkins" but this risk seems not worth it unless wife really wants one.
Kind of brilliant. Like buying a breakfast with Warren Buffett.
amazon.com/dp/0749464917/…
Important that luxury !== collectible but there's high overlap. And correlation to high demand:supply ratio.
a superior class, which everyone will have chosen according to their dreams,
because anything that can be a social signifier can become a luxury."
a place that is consistent with its world."
Must maintain consistent brand narrative. Needs a physical place and a story.
that matters but also the sound of it, not only the scent of a perfume but
also the beauty of the bottle it comes in."
Ppl more likely to sell Camry and keep Ferrari during recession.
* luxury is about status and identity (e.g. membership of aristocracy)
* money is just money, itself not a luxury
* money can be used to "brute force" a perception of luxury
* but true luxury requires private consumption
Which is why luxury tends to be a better SoV