CAN A PRODUCT BECOME LUXURY JUST BY FOLLOWING THE FORMULA?

Luxury. This term represents a sense of sophistication, uniqueness, and ambition. However, what exactly qualifies a product as luxury? Is it the product's design? Is it the high price tag? Is a limited production and hard-to-access distribution strategy what determines a luxury product?  It may be assumed that meeting the criteria of premium materials, high-end branding, celebrity endorsements, and limited supply would be enough to classify any product as luxury. Is this formula always working, though? The case of the Apple Watch Edition (Gold) reveals that the answer is significantly more complicated.

 

The Gold Watch That Didn’t Shine

When Apple first released its smartwatch in 2015, it came with an exclusive Apple Watch Edition made of 18-karat gold that cost between $10,000 and $17,000 USD. Elegant packaging, upscale advertising, and wearing it by celebrities like Karl Lagerfeld and Beyoncé were Apple's attempts to break into the luxury watch market with this model. Surprisingly, a few years later, Apple quietly discontinued producing this model, deciding not to continue with the product line.

 

What went wrong?

Despite Apple’s global brand strength, several factors contributed to the downfall of its luxury watch:

1. Heritage Deficit in High-End Industry: Luxury involves more than mere price tag, hugh quality materials, and advertisemnts; it requires a heritage as well. Brands such as Rolex and Hermès have established their identities over the course of decades, and in some cases, centuries. Apple, while recognised for its innovation and desirability, did not fulfil the expectations of luxury buyers regarding a narrative of generational craftsmanship 

2. Technology ≠ Timelessness: Luxury timepieces are frequently inherited, maintaining or even appreciating in value over time. On the flip side, tech gadgets such as the Apple Watch can swiftly become outdated when new models are introduced with far superior functionalities and features. Therefore, regardless of the quality of the external materials, the internal components degraded just as quickly as those of any smartphone.

3. Luxury Consumers Are Sophisticated: High-end customers prioritise value, rarity, artistry, and emotional resonance over mere price tags. Apple's product in this case appeared more as a technological novelty encased in gold rather than an embodiment of enduring luxury.

So, How Can We Tell If a Product Is Luxury?

The luxury equation involves multiple factors that require careful consideration. Craftsmanship, narrative, legacy, exclusivity, and emotional value come together to define authentic luxury.

Luxury is not solely produced; it is developed through careful cultivation.

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The Key Insights for Future Business Leaders

When considering the launch of a luxury brand, evaluate the following question:

• Does the product provide enduring value?

• Am I establishing a legacy or merely following a trend?

• Are my customers engaged on an emotional level with my narrative?

 

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Raffles Jakarta offers business and MBA programs designed to equip students with the skills necessary to navigate complex market realities, encompassing areas such as luxury branding and digital transformation. Start your journey with us today!​