How positioning and pricing are rapidly changing the definition of luxury

December 22, 2025

Brunello Cucinelli store on Sloane Street in London's Knightsbridge. Image credit: William Barton, Shutterstock

For years we’ve heard that the term “luxury” doesn’t stand for what it was intended: exclusive, rare, high quality. Many folks want to dump the word but have no substitute. In reality, luxury has undergone a silent divergence, with three camps catering to distinct audiences.

It all has to do with positioning and pricing: the twin levers that pull luxury in different directions.

Marking the democratization of the business, we now have brands that boast a premium positioning with high pricing. In this category I’d include Louis Vuitton, Gucci and Rolex.

Louis Vuitton and Gucci have descended to what I’d designate as designer brands: they cater mostly to an aspirational audience who buy into creative designs, transient styles and gimmickry such as the luggage-inspired cladding of Louis Vuitton’s under-renovation Fifth Avenue flagship store and the similarly LV-draped ship sitting plonk in a Shanghai shopping district.

The jury’s still out on Gucci’s recovery, but the positioning works for Louis Vuitton. Sales jump when it deploys such in-your-face tactics. Louis Vuitton accounts for a fourth of parent LVMH Group’s $100 billion in sales. But do the truly affluent and wealthy shop or buy Louis Vuitton? Your guess is as good as mine.

As for Rolex, I can already hear the gasps. Yes, the brand’s watches hold their value over the long term – a strong indicator of its value in the eyes of the beholder. But the Swiss company produces 1 million watches a year, which is hardly the definition of a true luxury brand’s limited run. Ubiquity is often the kiss of death for luxury, and yet Rolex defies that logic.

Artificial scarcity causing long wait lists is the Rolex pull, something about which French brand Hermès knows a lot, playing the game with its Birkin bags. Even Swiss watch brand Patek Philippe follows a similar waiting-game playbook, but it may have a genuine reason: only an estimated 50,000 units are produced annually for global distribution.

The second group boasts high positioning with premium pricing. I’d place Barbour and Land Rover in this category.

Barbour jackets are not exorbitantly priced – not even considered luxury at all, truth be told – and often made in Romania and Vietnam. But its core clientele in the United Kingdom – the hunting, shooting and fishing crowd swear by its products, and muckier and more tattered the better – influence other wealthy consumers and wannabes to buy into the lifestyle. It’s safe to say that the Barbour crowd has money, old and new.

The Land Rover/Range Rover lot is similarly influenced by the British heritage halo.

The Range Rover models are priced competitive to sport utilities from Porsche and a stable of other German and Italian brands. However, Land Rover Defenders are cheaper, and yet desired by the deep-pocketed who want to be prepared for an off-roading experience that is more of a feint rather than a reality.

Finally, there are brands with high positioning and high pricing. In other words, true luxury.

In their ranks I’d include Rolls-Royce Motor Cars, Patek Philippe, Cartier, Loro Piana, Hermès and Brunello Cucinelli. Their attention to quality and creativity coupled with exclusivity justify commensurate high pricing. Perception is reality and reality is perception with this cadre of brands. This cohort is what reflected original luxury’s values.

You can name several brands in each of the three buckets, and even within them, there are halo brands that can move up the luxury value/perception/reality chain.

The real line in the sand was 1984, when an executive from the construction and real estate worlds bought the bankrupt parent to the Christian Dior brand.

Not only did this executive revive the brand, but he took over several other cash-starved labels and family-run luxury firms in France, Italy, Switzerland, Germany, Spain, United States and the U.K. He resurrected and promoted them adroitly with the right mix of talent, marketing and money to amass a portfolio of 75 luxury brands worldwide, creating the world’s first and largest conglomerate.

Bernard Arnault has come a long way since, becoming one of the top 10 richest people on Earth. LVMH is one of the largest European companies worldwide.

Even Mr. Arnault and LVMH have repeatedly shifted their definition of luxury. A few years ago, when the perception was that LVMH’s flagship brands were turning street, he defined his stable of labels as “culture brands.” Then a few years later he pivoted to calling them “brands that retained their desirability over 10 years.” Now, LVMH calls itself the “world’s leading high-quality products group.”

SO, WHAT IS IT? What is luxury? I come back to my long-held definition: a luxury product or service boasts high quality, exquisite craftsmanship and genuine exclusivity with authentic heritage, earned consumer trust and evolving creativity to deliver positively memorable customer experiences. A brand or service must reflect these eternal attributes, backed by skilled talent to consistently uphold true luxury values.

LVMH, Kering, Richemont, Hermès, Chanel, Giorgio Armani and a plethora of labels across more than a dozen sectors have widened the definition of luxury to create a big tent under which brands targeting aspirational, affluent and wealthy consumers can shelter.

Companies of this ilk still consider themselves luxury even as they stretch the meaning to be more inclusive and embracing, while separating brand from country-of-origin manufacture and making quality secondary to image-building.

Long term, under pressure from financial markets for ever more quarterly growth and streetwise consumers savvier about the product versus value/price equation, these luxury brands and groups risk turning into a fourth, deadlier category: premium positioning with premium pricing. At that point, they won’t need to worry about the definition of luxury, because it won’t apply to them.

We’ll be discussing all of these issues Jan. 14-15 at Luxury Roundtable’s Luxury Outlook Summit 2026 in New York, with speakers such as Rolls-Royce Americas CEO Jon Colbeth and a host of other luxury tastemakers and leaders. Do check out our agenda and join us!

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