If you visit Canal Street in Lower Manhattan, you’ll find yourself surrounded by knockoff designer handbags. Gucci, Versace, Hermès, Louis Vuitton, Chanel—they’re all there, all available for $100 or less, some virtually indistinguishable from the real thing.

So why are people still willing to put themselves on a three-year waiting list for the privilege of paying $15,000 for a real Hermès Birkin handbag?

That’s the power of the luxury brand, says Gregory Carpenter, a professor of marketing at the Kellogg School, who studies the $380 billion luxury industry.

“We buy the luxury brand because it’s something extraordinary,” he says. “It also connects us with a particular group of people who appreciate that and admire that.”

Carpenter recently spoke about luxury brands in a two-part podcast with editor Laura Pavin. This week, we’ll delve into their conversation about what it takes for a brand to scream opulence—and whether it’s possible to create such a brand from scratch.

Build on authenticity

Unlike their copycats, luxury brands are distinguished by their authenticity. They offer customers something certifiably rare, which has been prepared according to rigorous standards.

One of the factors that confers authenticity upon a brand is heritage: companies like Hermès have been around for decades—or centuries—and create their products according to the highest standards of the craft.

Take the Stradivarius violin, for example. There are very few of these exquisite 17th century violins left, and concert violinists insist they sound superior to contemporary violins—even if blind tests reveal otherwise.

When you buy a Strad, you are not just buying the instrument, but a part of its legacy as well.

“Stradivari was a very accomplished luthier, but the real issue is that it was being played over the last three or four hundred years by the most famous violinists on earth, so it has a heritage,” Carpenter says.

Luxury can also be attached to brands with visionary founders, whose successors continue to live up to their tradition of excellence. In the documentary The Boy Who Made Shoes for Lizards, luxury-shoe designer Manolo Blahnik recounts the story of how, as a child, he fashioned tiny candy-wrapper heels for the lizards in his parents’ garden.

“Manolo Blahnik is a designer of shoes, and he’s considered a genius in the shoe industry, so the authenticity comes in large measure from his expertise,” Carpenter says. On the brand’s website, Blahnik’s sketches appear like paintings in an art gallery.

Creating luxury

But what about non-luxury brands, those without an exclusive pedigree or a visionary founder? Can they make the leap to luxury?

It’s not impossible, says Carpenter.

Take winter-wear producer Canada Goose. You probably know them from their puffy parkas, which retail for north of $1,000. And unless you are Canadian, you also may not have heard of them until a few years ago. Even though the brand has been around for a long time, its origin story is anything but luxury.

“It started in a garage in Toronto, producing winter wear for police and military in Canada,” Carpenter says. “It became sort of the staple—like the way the Jeep became the military vehicle in the United States.”

The brand was able to take the authentic heritage it did have, as well as its obvious functional benefits (the parkas are very warm in harsh winter conditions), and connect them to luxury via endorsements from athletes, Antarctic scientists … and Daniel Craig–era James Bond characters.

This makeover helped turn Canada Goose into the fastest-growing luxury company in the world in 2018 and 2019.

But recasting a heritage brand can be difficult, especially if its brand associations are hard to square with its aspirations. The recent attempt to resuscitate shoe-polish brand Shinola as a luxury wristwatch brand shows how tricky it can be to get the messaging and the product right.

You can learn more about where Shinola went wrong here. And you can listen to our primer on luxury brands here.

See you next week!

Jess Love, editor in chief
Kellogg Insight