alt Hacker NewsHumans are status-seeking creatures, and status is expressed through signaling. If you're rich and so are the people around you, money alone ceases to be a differentiator. Ultra-luxury brands appeal to this by adding hoops that money alone can't clear: time, loyalty, relationships. The signal shifts from "I can afford this" to "I was invited to spend my money here."
Lines outside Louis Vuitton are more down-market, aspirational luxury - an ultra-wealthy person wouldn't be caught dead queuing on a sidewalk. Patek and Ferrari operate at the level above, where the signal isn't wealth but access. (HBS calls Ferrari's version "deprivation marketing.")
Is it a game worth bothering with? Enough people think so to sustain billion-dollar brands.
(Of course, PG writing an essay about being too smart for fancy watches - while knowing a lot about them - is its own signaling game, just aimed at a different audience)
Replies
Status is a tool for the working wealthy, but ultra-luxury brands are only appealing to a subset of wealthy people.
There’s a great number of people with 100+M and even far beyond that who enjoy nobody knowing just what kind of wealth they have. This doesn’t mean looking poor, but there’s plenty of value in anonymity.
He’s probably also too rich for fancy watches to actually be a useful signal of wealth amongst his peers.
>>> ...PG writing an essay about being too smart for fancy watches
Stealthy, like a submarine.
While the ultra rich do buy from luxury brands, they're often spending the most on unique items, such as ordering a custom yacht.
Having the most expensive item in some category, or close to it, often gets you news coverage, which is something a normal purchase can't really offer.
I know I’m being sold something when someone declares the science of human nature.
"The signal shifts from «I can afford this» to «I was invited to spend my money here.»" "the signal isn't wealth but access"
The most shocking aspect here is the mindset of these people that come to value this access, and the fact that they have to have their own self-perceived worth at some lower (i.e. improvable) level in comparison. It has to be, otherwise the value of that access can't make much sense, otherwise that association to a brand (as chosen not chooser) can't be perceived as something of value. The only (sane) question worth asking, knowing that about the people falling into this game is - do I want to count myself as one of them?