How Luxury Brands Brainwash You to Buy

Summary

Investor and Shark Tank star, Saabie, explores the world of luxury fashion brands in Beverly Hills, uncovering their tactics to target consumers. He investigates how brands like Louis Vuitton, Dior, Gucci, Chanel, and Rolex use exclusivity, price priming, status signaling, and neuromarketing to drive sales and maintain their high-profit margins. Saabie also shares insights on how these strategies can be applied to businesses to boost profits.

Takeaways

• 💼 Louis Vuitton, the world's most valuable luxury brand, uses tactics like limited stock to create urgency and exclusivity, driving up demand and profits.
• 🛍️ Luxury brands like Louis Vuitton and Dior employ personal shoppers and scarcity marketing to enhance the perceived value of their products.
• 👜 The high markup on luxury items, such as a $3500 Dior tote bag costing only $57 to make, is justified through premium pricing and brand prestige.
• 💰 Price priming is a strategy used by luxury brands to influence customer perception and willingness to pay higher prices for products.
• 👗 Gucci's use of a velvet rope and exclusive service creates a sense of status and desirability, which is key to their brand's appeal.
• 👑 The emotional sale is central to luxury brands, where the product's status symbol and the feeling of belonging are more important than the material value.
• 🎓 Understanding and leveraging neuromarketing, which studies consumer brain activity in response to products and ads, can significantly impact sales strategies.
• 🔗 Luxury brands like Chanel and Rolex focus on creating a consistent brand experience and association with specific ideas or feelings to build customer loyalty.
• 📈 High-profit margins in luxury brands are achieved through a combination of premium pricing, exclusive customer service, and a focus on repeat business.
• 🌐 The global search for Rolex watches and their scarcity in stores is a deliberate strategy to enhance the brand's exclusivity and maintain high demand.

Q & A

What is the annual revenue of Louis Vuitton?

Louis Vuitton sells over $15 billion worth of products each year.

What is the purpose of luxury brands creating a sense of urgency through limited stock?

Luxury brands like Louis Vuitton create a sense of urgency and exclusivity by limiting stock, making their products more desirable and increasing the demand.

How does the luxury brand Dior use price priming in their marketing strategy?

Dior uses price priming by setting high prices for their products, such as a $3500 tote bag that costs only $57 to make, to create a perception of premium quality and exclusivity.

What tactic does Gucci employ at the entrance of their store to create an impression of exclusivity?

Gucci uses a Velvet Rope and a doorman at the entrance of their store to create an impression of exclusivity and to manage the flow of customers.

What is the significance of the Gucci logo in terms of consumer psychology?

The Gucci logo signifies status and social standing. Consumers buy the brand and status associated with the logo, as it is often associated with celebrities and influencers.

How does Balenciaga use neuromarketing to influence consumer behavior?

Balenciaga is known for using neuromarketing, studying how consumers' brains react to their products and ads, to influence consumer behavior and create a strong brand association.

What is the main strategy behind Chanel's product presentation?

Chanel focuses on a feminine and timeless style in their product presentation, aiming to create a consistent brand image and association with their customers.

Why does Rolex claim that their watches are not available for purchase in-store?

Rolex claims that their watches are not available for purchase in-store to create a sense of exclusivity and high demand, which justifies their premium pricing and encourages customers to wait for the product.

How do luxury brands justify their premium pricing?

Luxury brands justify their premium pricing by providing an exceptional customer experience, creating a sense of exclusivity, and associating their products with high status and quality.

What is the role of personal shoppers in luxury brand stores?

Personal shoppers in luxury brand stores are assigned to assist customers, provide personalized service, and upsell higher-priced items, enhancing the overall shopping experience and increasing sales.

How do luxury brands use influencer marketing to boost their sales?

Luxury brands collaborate with influencers to leverage their existing relationships with their audience, creating an association between the influencer's popularity and the brand's products, which can lead to increased sales.

Outlines

00:00

🛍️ Unveiling Luxury Brand Tactics at Louis Vuitton

The video script explores the marketing strategies of Louis Vuitton, the world's most valuable luxury brand. It discusses how these brands target not just the rich but also the masses by using neuroscience and marketing tactics to create a sense of urgency and exclusivity. The narrator, an investor and Shark Tank participant, visits Beverly Hills to investigate the top luxury fashion brands. He uses covert shopping glasses to expose the tactics used by these brands, such as creating artificial scarcity to increase product desirability. The script details an experience at Louis Vuitton, where the narrator pretends to be a billionaire from Dubai to test the brand's customer service and exclusivity tactics. Despite the high demand and limited stock claims, the narrator manages to find the desired product, illustrating how these brands validate purchases and create a sense of urgency.

05:00

💰 Price Priming and Social Status in Luxury Fashion

This section delves into the concept of price priming, where the perception of a product's value is influenced by the environment and associations before the actual offer is made. The narrator visits Gucci and experiences the brand's use of velvet ropes and personal shoppers to create an exclusive shopping environment. The script highlights the high markup on a Gucci tote bag, suggesting that luxury brands are selling social status and the perception of being associated with celebrities and high-end fashion. The narrator emphasizes the importance of understanding what emotional sale and status a product represents, rather than just its features and benefits. The discussion also touches on neuromarketing, where brands study consumer reactions to products and ads to influence purchasing decisions.

10:00

🔗 Building Brand Association and Exclusivity in Luxury Retail

The final paragraph focuses on how luxury brands like Chanel and Rolex create strong brand associations and use exclusivity to their advantage. The narrator describes his experience at Chanel, where he is met with a consistent brand image and a focus on feminine, timeless style. He notes that luxury brands aim to link specific ideas or feelings with their brand, similar to how Volvo is associated with safety or Apple with simplicity. The script also discusses the exclusivity tactics of Rolex, where the narrator is told that the desired watch is not available for purchase, but his contact information is taken for future availability. The narrator concludes by emphasizing the importance of providing an exceptional customer experience through small, consistent touches throughout the client journey, which is a key strategy used by luxury brands to ensure repeat business and high profits.

Keywords

💡Luxury Brand

A luxury brand refers to a label or brand that offers high-quality, premium products, often associated with exclusivity, high social status, and a significant price tag. In the video, luxury brands like Louis Vuitton, Dior, Gucci, Chanel, and Rolex are discussed as examples of companies that use various marketing strategies to maintain their high-end image and appeal to consumers seeking status symbols.

💡Exclusivity

Exclusivity in the context of luxury brands denotes a deliberate limitation of supply to create a sense of rarity and urgency among consumers. The video explains how brands like Louis Vuitton manufacture exclusivity by limiting stock, making products seem more desirable. For instance, the video mentions how a specific wallet was claimed to be in high demand and not readily available, thus creating a sense of urgency to purchase.

💡Neuromarketing

Neuromarketing is the study of how consumers' brains respond to marketing stimuli, using methods like fMRI scans and eye-tracking software. The video touches upon how luxury brands invest in neuromarketing to understand consumer behavior better and craft more effective marketing strategies. Balenciaga is cited as a brand that might use neuromarketing to justify its unconventional designs and high sales figures.

💡Status Symbol

A status symbol is an item that people buy to signal their social or economic status. The video discusses how luxury brands like Gucci sell not just products but also the status that comes with owning them. The example of a Gucci tracksuit costing around $5,000 is used to illustrate how consumers are buying into the brand's status and association with celebrities and rappers.

💡Price Priming

Price priming is a marketing technique where the price of a product is set to influence consumer perception of its value. The video explains that luxury brands use price priming to establish a premium price point, which can lead to higher profits. It's mentioned that doubling prices can be a strategy to command a higher value in the eyes of the consumer.

💡Manufacturing Urgency

Manufacturing urgency is a sales tactic where brands create a sense of immediacy to encourage quick purchasing decisions. The video gives an example of how a Louis Vuitton store claimed that a popular item was the last one in stock, which is a common tactic to make consumers feel they need to act fast to avoid missing out.

💡Personal Shopper

A personal shopper is a sales associate who provides personalized service to customers, often in high-end stores. The video describes how luxury brands assign personal shoppers to customers to enhance the shopping experience and potentially upsell more expensive items, as seen when the narrator was guided to a $44,000 duffel bag while looking for a wallet.

💡Influencer Marketing

Influencer marketing involves partnering with influential people to promote products, leveraging their audience and credibility. The video suggests that luxury brands use influencers to associate their products with a certain lifestyle or status, which can influence consumer purchasing decisions. The relationship between brands and influencers is compared to how Volvo is associated with safety.

💡Customer Experience

Customer experience refers to the sum of all interactions a customer has with a brand, which can significantly impact their perception and loyalty. The video highlights how luxury brands focus on providing an exceptional customer experience throughout the client journey to justify their premium pricing and encourage repeat business.

💡Emotional Sale

An emotional sale is a transaction driven by the consumer's emotional response to a product or brand rather than purely rational factors. The video emphasizes that luxury brands sell an emotional connection and status, not just the physical product. The appeal of wearing a Gucci logo is tied to the emotional desire to be associated with the brand's image and the celebrities who wear it.

Highlights

Louis Vuitton, the world's most valuable luxury brand, sells over $15 billion worth of products annually.

Luxury brands use neuroscience and marketing to control consumer behavior.

Covert mystery shopping glasses are used to expose luxury brand tactics.

Luxury brands manufacture exclusivity by limiting stock to increase urgency and desirability.

Personal shoppers at Louis Vuitton attempt to upsell high-priced items.

Dior's $3500 tote bag costs only $57 to make, highlighting extreme mark-ups.

Price priming is a strategy used to set high price points for luxury goods.

Gucci uses a velvet rope and personal shopper to create an exclusive shopping experience.

Luxury brands sell status and social signaling, not just material quality.

Balenciaga's unconventional designs and neuromarketing strategies.

Chanel's focus on feminine and timeless style to create brand association.

Rolex's strategy of not holding watches for sale in-store to maintain exclusivity.

Luxury brands aim for repeat purchases and long-term customer relationships.

Providing an exceptional customer experience justifies premium pricing.

Luxury brands track customer purchases to offer personalized service and maintain exclusivity.

The importance of linking brand identity with emotions and ideas to drive sales.

Transcripts

this is Louis Vuitton the most valuable

luxury brand in the world each year it

sells over $15 billion worth of products

and leads the luxury fashion market with

the highest profits than any of its

competitors but what you don't see is

how these billion dooll Brands Target

the poor and not the rich and get inside

their head using neuroscience and

marketing to control the minds of the

masses and today I'm in Beverly Hills to

shop the top five luxury fashion brands

in the world and expose exact ly how

they do it and these are our covert

mystery shopping glasses so we can get

footage and expose the tactics that

these companies are using firsthand in

the store this is 10,400 this is 10,800

and I'm also going to show you how to

apply these same tactics to your own

business to dramatically increase your

profits if you don't know me I'm sa

subie I'm an investor on Shark Tank I've

generated $7.8 billion for my clients

first up is Louis Vuitton so before we

go into this store here are some of the

tactics that they are known to deploy in

store that I'm going to be keeping my

eye out for so these Brands they go

through the Most Extreme Measures to

manufacture exclusivity their Limited

stock that is all a fugazi do you really

think that they don't have the funds to

go out there and procure the goods to

make enough to sell to the demand of

course they do it is by Design they want

to keep that stock low so that it

increases the urgency for you to act now

when they do have the invent in place

and to make it more desirable in the

first place so my bodyguards and I

headed into Louis Vuitton to investigate

I told them to pretend I was a

billionaire shake from Dubai to see how

these luxury Brands would treat me

inside immediately we were met with our

first

challenge's this is all women's you're

very close two blocks we went to the all

women's store so we ventured over to the

men's store to try and buy a passport

wallet immediately we were assigned a

personal shopper to show us around the

store I found my wallet on display and

what do you know they said that this

specific item had insane demand and that

it wasn't available at this store but I

refused to give up so we drove 40

minutes to another Louis store

immediately we were greeted with another

personal shopper I told them that I

wanted a passport wallet and she

immediately brought me to their Travel

section here's where it gets juicy she

mentioned that the wallet I was after

was hard to come by and while she

checked the back of the store she tried

to sell me $1,000 pair of sunglasses as

well as a $44,000 duffel bag they ended

up having the wallet but somehow it was

the last one in stock all right so we

just cop some Louis V whatever it is

that you choose that you want they

validate that immediately that's our

most popular we've only got one more of

those in stock and it's by limiting this

Supply do things become infinitely more

desirable and why people laugh about it

and they say oh that's so extreme the

reason that they do it is because it

works and it's not just the these huge

massive luxury fashion brands think

about some of your favorite Brands think

about Apple for instance you can't just

go in there and just buy their brand new

products whenever you want it they only

have a certain amount of inventory

that's sent to each location and if you

try to call up in advance and being like

hey can I get this certain iPhone they

say I don't know we get a certain bag

sent to the store every day and we don't

even know what they're going to send and

it's the whole manufacturing of that

exclusivity is what gets people to just

rock up droves to buy their products

next up is Dior the number two luxury

fashion brand in the world these guys do

over 11 billion in sales annually and

they had this tote bag it's

$3500 and it cost $57 to make and the

internet is going completely wild about

cost less than $60 to make a $5,000 bag

so let's go on in and see what tactics

it they're going to use on us so we went

into Dior and immediately asked to see

the $57 tote bag I couldn't believe that

they sold these things for

$3500 it's an Egyptian cotton it's and

even though I don't think it was

anything special I got to respect it

because this is the very first thing

that I do when a client wires me 50K I

get on the phone with them and I tell

them immediately straight out of the

gate you need to double your prices

because you want to be selling at a

premium price point unless your business

model is to be able to service the Entre

entire market so nobody can possibly

compete with you on price then operating

at the lower end of the market is a

Fool's errand and you do not want to

play the race to the bottom because you

never win all prices are made up when it

comes to setting the price for your

product the setting matters so you want

to think about how do you actually

present that product if it's a physical

product what is the location that you've

done the product photography what is it

next to what are the models like what's

the lighting what's the aesthetic what's

the whole makeup what very few people

understand is price priming and that is

where you prime the prospect based on

the association and the area and all the

things that they are subjected to before

you actually make your offer to them

next up is Gucci everybody knows Gucci

it's the loudest fashion brand that

there is you got the Gucci belt the

loafers the jumpsuits so your boy is

about to go on him and get dripped out

in that Gucci stuff let's see the

tactics that these guys deploy we enter

Gucci and the first thing that I noticed

is the man at the door whose entire job

is to let you through their Velvet Rope

I let them know that I wanted to get as

drippy as possible so they took me to

the back of the store to all of the

clothes they offered me nothing but the

finest sparkling water and then I asked

to try on one of their tracksuits they

left me waiting for around 10 minutes my

guess is that this was a tactic to get

me to browse some more I looked at some

of the shoes the the Gucci belts and

then they called me to the changing room

to try on the Gucci tracksuit and let me

tell you this thing was ridiculous and

the entire set cost somewhere around

$5,000 you are definitely buying the

brand and status with this one we seek

social status from the schools that we

go to to the places that we work to the

type of clothes that we wear everybody

wants to Signal a certain status and we

all want to be perceived as being higher

status than the people that we associate

with a lot of business bus just sit down

they think about all the features and

the benefits of whatever it is that

they've got to sell but they don't think

about what buying their product

represents from a status standpoint and

what it signals or what type of status

does it unlock if someone buys for you

and if you think about these luxury

Brands you are not buying the material

you're not buying the cotton you're not

buying all of those specific things yes

they hop on about craftsmanship and

quality but that is how they justify the

sale that is not how they get you to buy

in the first place it is an emotional

sale they are selling you the status of

having the big Gucci logo on your

tracksuit because they know all the

rappers and celebrities influences that

it is what they're wearing and you want

to be like them and therefore this is

like a cheat code if you buy this you

are going to be like them before we dive

into what might be the craziest

manipulation tactic I've seen from any

retailer at Rolex I decided to play a

little prank on the people over at

balenciag these guys are known for their

outof pocket designs like their $1,800

leather chips bag and $4,000 tape

bracelet so I asked to try on their

biggest oversized hoodie and Kanye's

favorite the oversized cck

boots bro I almost lost it when you made

them bring out those

[ __ ] their products are so wild that

there has to be some other reason as to

why they're able to sell over $1.4

billion a year they're masters of

trolling the internet and consumers by

using something called neuromarketing

and neuromarketing is the way that

scientists study how our brains interact

with certain ideas objects and ads these

big Brands they spend millions of

dollars per year in this study and they

use crazy technology like fmri to study

the blood flow in people's brains when

they're exposed to certain products and

ads they also have all of these fake

shops and supermarkets set up where they

use eye tracking software to have a look

at what happens to people's heart rates

when they see certain products when they

see certain ads and they interact with

different store layout now I'm not

saying that you need to go through these

crazy lengths and use all this insane

technology but what I will say is the

very first thing that I do when I sit

down and I write an ad or a vsl or craft

an email is I think what is the emotion

that I'm trying to elicit I don't think

about how do I write this subject line

or what's the hook going to be you first

need to start from the place of like how

you trying to make the prospect feel

because all the masterful copy all you

putting the features and benefits people

don't remember that but they will

remember how you make them feel all

right here we are at the front of Chanel

it is the fourth ranked luxury brand in

the world let's go on in and see what

it's all about inside of Chanel I asked

to see their most popular item the

classic chenel bag and of course they

tried to use the exclusivity of these

bags against me c your Gold Hardware

this is 10,400 this is

10,800 claiming that it was a limit of

one per customer when I asked to

purchase three of them for my daughters

a few minutes later and they let me know

that miraculously that they happened to

find three of these exact bags that I

was looking for in stock and they told

me that I would actually be able to buy

all three of them because I had me and

my two bodyguards but one thing that I

noticed about Chanel that stands out

from all the other luxury Brands is just

how heavy they lean into their feminine

and timeless style everything they do

from the way the hostess greets you the

lighting in the store the products

themselves all radiate the same energy

they want to link an association with an

idea or a feeling with their brand and

it's the same thing with how Volvo pairs

their brand with security and safety or

Nike with determination and apple with

Simplicity it is simply a link between

an idea and a concept to their brand and

they keep keep hammering it in all their

communication until that link is formed

and it's the very same reason that these

Brands spend millions and millions of

dollars a year on influencers they're

taking a relationship that that

influencer already has and they're

flipping that relationship to have that

Association and that brand liking to

their brand to make more sales so you

want to zoom out and you want to think

ultimately what is that linking that I

am trying to form with my brand and now

Rolex it is the fifth ranked luxury

fashion brand in the world these guys do

over

$10.1 billion in sales annually

everybody knows it is almost impossible

to get a Rolex I have been all over the

world searching for a Time piece and I

cannot find it going in I'm going to try

my hardest to get a watch for wifey but

the thing is it's almost impossible to

actually buy a Rolex at the store that

is because they actually don't hold

anything for sale I went in with the

exact watch that I wanted in mine and

they said that it was not available to

purchase but they would take down my

phone number and call me when it was in

stock what what female watches do you

have install today I only have

exhibition I don't anything for sale

today what about it men's again I don't

have any there no watches at all for

sale everything is exhibition they claim

that it's because their watches are in

such high demand that they are unable to

keep up any inventory in store but this

is just all a fugazi to sell the

exclusivity of the brand they've learned

that they are way more more profitable

by selling the weight list than actual

watches but how are they able to justify

such a premium price tag if they won't

even sell you in store the whole idea of

charging premium prices is typically an

idea that most business owners can get

around but the thing that they don't

like to think about is what type of

servers would they need to provide in

order to justify that premium price tag

because you can't just go oh that sounds

great suby let me just charge double

triple for what it is that I've got

right now because a transaction takes

place where value exceeds price and what

I have found from having thousands of

clients all over the world providing an

incredible customer experience is made

up by having a lot of little things that

you do all throughout that client

Journey that adds up to the overall

experience that it is that they provide

and that's exactly how these luxury

Brands operate they know exactly who

your name is what items that it is that

you bought in the past because that is

the only way that you can actually get

the products that you want to buy in the

first place they're not in there to sell

you one bag or one belt they want you

buying off them repeatedly and forever

and that's how they make these obscenely

high profits so there's the strategies

to dramatically increase your profits

like subscribe and I'll see you in the

next one