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)
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He’s probably also too rich for fancy watches to actually be a useful signal of wealth amongst his peers.
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.
>>> ...PG writing an essay about being too smart for fancy watches
Stealthy, like a submarine.
I know I’m being sold something when someone declares the science of human nature.
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.