Does anyone ever wonder about the concept of luxury by Chanel? In fact, has anyone ever thought about how these big houses keep their “luxurious” status over the years?
Earlier this year, the French giant house Chanel announced a price increase for most of their bags. This is not the first time. In fact, this marked the fourth time Chanel announced a price hike in the last 12 months. Now, some of its signature handbags now cost up to twice what they did before the pandemic in 2019.
“The point about luxury is that everyone shouldn’t be able to afford it, so many high-end brands ration their products and accessibility,” according to So Creative. Likewise, the price increase enacted by Chanel is not at all unpredictable. Even Chanel has made the statement clear for itself about the price increase:
“What has been implemented yesterday is not a price increase,” said Chanel. But rather a harmonization of the prices of our entire in-store offer. In fact, Chanel has been doing price increase since 2015. They said it was an effort “Which aims to avoid excessive price disparities between the markets where we are present.”
According to Investopedia, “A luxury item is not necessary to live, but it is deemed highly desirable within a culture or society. Luxury items tend to be sensitive to a person’s income or wealth, meaning that as wealth rises, so do purchases of luxury items. As a result, people consider luxury items to show positive income elasticity of demand, which is a measure of how responsive the demand is for a good to a change in a person’s income.”
So, basically, what that means is that even though these brands may have quality materials and handcrafted goods, their price will always go up for the sake of scarcity. To protect their luxurious “brand”, they have to make it less and less accessible for everyone.
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