Forbes: Is Luxury Still Worth It

The Forbes article, "Is Luxury Still Worth It? Luxury Brands Try to Justify High Prices" by Benjamin Voyer, explores the growing scrutiny luxury brands face as consumers question whether high-end prices are justified.

Since COVID-19, luxury prices have risen significantly, outpacing both inflation and high-street brands. Social media has intensified debates over the true value of luxury goods, with viral posts dissecting pricing strategies and challenging the industry's models. One of the key factors behind these rising prices is the shift from cost-based to value-based pricing. Historically, luxury brands set prices based on production costs, quality materials, and craftsmanship. Today, pricing is driven by perceived value—status, exclusivity, and brand identity—rather than actual costs.

Additionally, globalization, particularly in Asia, has influenced pricing. Brands strive for price consistency across regions to maintain margins and avoid disparities. However, as prices continue to rise, consumers are becoming increasingly skeptical about whether luxury goods still reflect the craftsmanship and quality they promise. Regular luxury buyers may notice a decline in quality, while occasional buyers may be less aware.

As consumer backlash grows, luxury brands must educate customers on their value proposition to justify high prices. Ethical concerns regarding profit margins and transparency may pressure brands to be more open about pricing strategies. Moving forward, luxury firms must carefully balance exclusivity, quality, and fair pricing to maintain their desirability and long-term growth.

Link to news item: https://www.forbes.com/sites/benjaminvoyer/2025/01/21/is-luxury-still-worth-it-luxury-brands-try-to-justify-high-prices/