The Truth About Luxury

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🛍️ Why We Pay More for Luxury
Insights from customercamp.co

Ever wondered why expensive products often feel superior—even when they aren’t? Whether it’s high-end wine, designer handbags, or luxury watches, premium pricing plays a huge role in shaping our perception. Let’s dive into the psychology behind Veblen Goods and how brands use it to their advantage.

Why Higher Prices Drive Demand

1️⃣ The Price-Perception Illusion: When faced with a selection of products, people often assume the most expensive option is the best. A simple wine-tasting experiment showed that participants consistently rated the pricier wine as superior—even though it was identical to the cheaper ones.

2️⃣ Status and Exclusivity: Economist Thorstein Veblen identified that some goods defy traditional demand curves. Instead of lowering demand, a higher price actually increases desirability because the product becomes a status symbol. Think Hermès bags, luxury cars, or Rolex watches.

3️⃣ The Power of Expectation: A study on pain relief found that participants who took an expensive placebo painkiller reported greater pain reduction than those who took a cheaper version—even though both were identical. Pricing shapes expectations and expectations shape experiences.

How Brands Use This Strategy

📌 Luxury Positioning in eCommerce: Brands like De Beers transformed diamonds from a commodity into a symbol of love and commitment, making them a must-have despite their high price and lack of resale value.

📌 Exclusive Buyer Journeys: Hermès doesn’t just sell handbags—they sell an experience. Customers must build relationships with sales advisors and wait years for a Birkin, increasing the bag’s allure.

📌 Aspirational Advertising: Rolex doesn’t sell watches—they sell prestige. Their ads focus on status and success, appealing to buyers who want to showcase their wealth.

 The Takeaway

Winning brands don’t compete on price. Instead, they create perceived value, exclusivity, and emotional connection that justify premium pricing. The more a product aligns with a customer’s self-image and desires, the more they’re willing to pay.

2025 Marketing Trends You Need to Know
Insights from stackedmarketer

New year, new data. But instead of the usual ad spend and platform growth talk, we found some underrated trends shaping the next few quarters.

1️⃣ Ads Annoy More Than Privacy Concerns
Users are more frustrated with ads than security risks. Mobile app users (81%) are the least tolerant, while CTV viewers (69%) are more forgiving. To stay relevant, brands should explore native ads and prioritize seamless integration.

2️⃣ Social Media is a Reputation Risk
Over 50% of brands see social media as a risky ad platform. Digital video, CTV (40%), and influencer marketing (25%) are viewed as safer options. While social media remains essential, brands should weigh risks and explore influencer-led strategies.

3️⃣ Experiential Marketing Keeps Growing
B2B and B2C experiential marketing saw steady growth in 2024. B2B brands should leverage workshops, demos, and hybrid events, while B2C can focus on interactive experiences, AR/VR, and influencer engagement.

4️⃣ Gen AI is a Core Marketing Tool
AI-driven content, strategy, and business case development are now mainstream. Marketers should integrate AI into internal processes, using it for trend analysis and campaign strategies—without losing the human touch.

5️⃣ Budget Constraints Remain a Challenge
30% of marketers fear economic challenges will impact budgets, while 25% struggle with managing too many channels. To stay efficient, teams should focus on high-ROI efforts and avoid spreading resources too thin.

The Bottom Line

2025 is about balancing ad fatigue, social media risks, experiential growth, AI adoption, and budget efficiency. Smart adaptation will be key.

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