Perhaps the thorniest of challenges for luxury brands in an already tough market is restoring a clearer sense of value for money after rampant price hikes and some lapses in quality left many consumers frustrated — or worse, industry experts say.
“The remedy is ultimately a return to the fundamentals of luxury: genuine craftsmanship, authenticity, quality, durability, transparency, and a certain degree of restraint,” argued Achim Berg, founder of FashionSights, an independent corporate think tank. “Brands that truly live these values — rather than simply marketing them — will be in a much stronger position once the market stabilizes and consumers become even more selective.”
Multiple observers cited a need among luxury brands to justify significantly higher prices relative to the pre-pandemic period — which explains why executives have been trumpeting efforts to improve product quality.
For example, at the Kering Capital Markets Day in Florence in April, the French luxury group’s chief executive officer Luca de Meo said of Gucci: “We are elevating quality everywhere… This quality update will be very, very meaningful… We are renewing the price architecture to ensure that perceived value and price remain aligned.”
He made similar vows talking about Saint Laurent’s leather goods business: “Quality standards will be further strengthened towards true high-end positioning.
“Investment to improve product quality and further enhance our standards when it comes to supplier selection, supply-chain quality will generate costs,” he added.
Executives from brands as diverse as Dior and Jacquemus have been talking about quality improvements over the past year or so.
“At the price of luxury, everything has to be perfect. If not, the magic is broken,” said Luca Solca, luxury analyst at Bernstein. “Luxury is a business of details.”
And now that the post-pandemic spending frenzy is over, “luxury consumers are asking for value for money again… Brands are having to prove that their products actually justify the prices being charged,” Berg said.
Jean Revis, cofounder of Paris-based luxury consultancy MAD, characterized the current discourse about quality to “more of a value-for-money catch-up” than correcting lapses.
“I don’t think brands were skimping on quality, they just mixed brand elevation and price elevation,” he said in an interview. “A true brand elevation is not just about more expensive: It’s about sending all the signals that will grow brand equity — creativity, quality of service, and of course quality itself.”
In his view, brands can justify price elevation with enhanced quality, but brands best not trumpet such measures.
“A large part of it should happen in-store, with a specific sales speech, better education of the sales associates on this topic, and probably specific trainings about it,” he said.
And while “product maintenance and after-sales is not a topic that is systematically discussed, the topics are intimately linked, and insisting on them definitely would allow associates to reassure and provide a sense of durability — a major criteria for quality perception.”
Agility Research & Strategy, a Singapore-based consultancy specializing in the behavior of affluent, high-net-worth and ultra-high-net-worth consumers, found that two-thirds of this consumer cohort agree that too many luxury brands raised prices without improving quality.
“In the U.S., that figure reaches 70 percent,” Agility managing director Amrita Banta told WWD. “Japan is the most critical market at 81 percent; China is the least at 51 percent, though even there it remains a majority view.”
Indeed, 47 percent of rich clients who buy handbags say they have purchased from brands they describe as high quality and premium, but positioned below traditional luxury brands.
“So the data does suggest some resentment or frustration, but it is expressed through sharper scrutiny, trading across price tiers and a higher bar for what justifies a luxury price tag, rather than a broad withdrawal from the category,” Banta noted.
Prices of some iconic luxury handbags rose between 50 percent and 70 percent since 2019 — and on top, many viral social-media posts have cast a spotlight on mediocre product quality, clandestine Chinese production, and what HSBC analysts dubbed “greedflation.”
“Over the past few years, price increases became so aggressive that a real disconnect emerged between customer expectations and what many brands were delivering,” according to Berg. “The Italian production and subcontracting scandals certainly did not help either — they weakened one of luxury’s core promises around craftsmanship and quality, and ultimately trust.”
Berg pointed to such Instagram accounts as Tanner Leatherstein, which dissects luxury leather goods to assess material and construction quality, and calling out shortcomings; Diet Prada, which often spotlights supply-chain issues and poor labor practice; and certain Chinese manufacturers uncovering repair scandals and supply-chain irregularities.
“It is quite damaging because it reinforces a perception that many consumers already had,” he said. “Several industry experts have told me that the sharp increase in production volumes has inevitably led to weaker control and, in some cases, lower product quality.
“It is obviously problematic when consumers start believing they can find better quality on resale platforms like Vestiaire than in the actual boutique,” he added.
Daniela Ott, founder of Agape Strategy Consulting and an expert in the resale market, said the segment gives consumers access to “better perceived value: often a stronger product, better materials and a more acceptable price.”
“Resale value has become one of the clearest tests of a product. If an item holds its value, it says something very powerful about its quality, longevity, desirability and cultural relevance,” she said in an interview. “If it does not, it raises the question of whether the product was really built to last — or whether the product and its price was mostly marketing.”
Ott cited a recent ThredUp finding that 39 percent of consumers say they would buy new apparel if they knew it had a high resale value.
Isabelle Guichot, CEO of SMCP Group, parent of the Sandro and Maje fashion chains, recently told a Faume webinar that she monitors resale prices as a key performance indicator, or KPI.
In Ott’s estimation, in 80 percent of cases, the consumer “is going for the second-hand item because it’s just a better price and value, and better quality.”
In the case of leather handbags, some consumers believe older bags were made with heavier leathers, stronger hardware, better linings or more durable finishes.
“Whether or not this is technically true, the perception itself has become a real resale selling point,” Ott said.
In her view, quality is important for all consumer cohorts.
“New luxury buyers often judge quality through the full brand experience: the boutique, the service, the packaging, the storytelling, the status around the product,” she said, noting this cohort also buys into novelty.
By contrast, buyers of previously owned items are more pragmatic and forensic. “They compare leather, hardware, lining, production year, condition and price,” in addition to the overall condition, authenticity and desirability.
Experts agree that consumers who feel betrayed by exorbitant prices and/or quality shortcomings don’t necessarily stop loving luxury. They simply move to resale platforms, vintage dealers or brands at price rungs below luxury.
“I do think brands like Polène, Coach, Zadig & Voltaire and Sezane have benefited from this, too,” Ott said, also noting that high-street chains like Cos and Zara also have “upped their game” with brand elevation strategies.
MAD’s Revis said the jewelry segment has also undoubtably benefited since it embodies “a more durable investment, and a rather safe one with the price of gold continuously increasing.”
Andreas Murkudis, who runs a namesake specialty store in Berlin, said he recently stopped carrying several designer brands — The Row, Jil Sander and Rick Owens among them — due to prices he contended are untenable.
“With the big brands selling a white T-shirt for 800 euros, it’s also a problem for me,” he said, noting having a fashion designer brother, Kostas, has given him further insights into the true costs of manufacturing apparel. For example, a woven shirt costs about 35 to 80 euros to produce, he said.
The retailer prefers to hunt down brands in Italy, Japan and further afield that offer good style, craftsmanship, finesse and fair pricing — and his customers are fully on board. “When the product is good and they feel the quality and the price is OK, then they don’t care about the brand name,” he said.
Agility’s Banta argued that affluent and HNW consumers now have a broader, more nuanced view on quality, and are paying closer attention to authenticity of origin, ethical credentials, sustainability practices and the credibility of craftsmanship claims.
“At the same time, some consumers are viewing luxury purchases more pragmatically, as assets or functional investments that should hold value, retain relevance and justify their premium price,” she said.
Banta stressed that luxury brands must make the price-quality equation more visible — and credible.
“That means reinforcing craftsmanship, material excellence, durability, after-care, provenance and scarcity in ways consumers can understand and verify,” she said. “Every price increase needs to be matched by a stronger value story, a stronger product experience and a clearer sense of integrity.”
Experts agree that luxury brands cannot cut prices of iconic products, but they can increase functionality, service, design and the quality of the buying experience.
“At the same time, brands need much tighter control over their supply chains,” Berg argued. “Apart from a few players like Hermès and some smaller specialized Italian manufacturers, most luxury companies do not fully own their production. That makes transparency and oversight even more critical — from sourcing of materials all the way to final assembly.”
“Higher upstream integration into direct manufacturing and a tighter control of the supply chain are required to support craftsmanship claims,” Bernstein’s Solca agreed. “In other words, brands need to put money where their mouth is.”