Handbags cost much more than men’s work bags?
Along with the iconic Birkin bag, the Hermès Kelly bag (pictured here) is also a timeless. Photo: @hermes/Instagram
By Daniel Langer, CEO of Équité
It might sound incredible, but the most expensive brands in the world may be priced too cheaply. Pricing is one of the most challenging tasks for brands. Few get it right. Indeed, our research shows that many luxury brands are priced far too low – leaving a significant profit potential on the table.
Sound wrong? Take an example that may seem absurd at first glance: the most expensive omelette in the world, the Zillion Dollar Lobster Frittata, served at Norma’s restaurant at what was then called the Le Parker Meridien New York. A decade ago, I ran an analysis with a luxury pricing tool developed for my doctoral thesis and ran it on the omelette category simply for fun. I was astounded: although the omelette sold for US$1,000 at the time, the pricing algorithm indicated, by comparing the omelette with many other categories, that the price could easily be doubled. I remember calling the restaurant management to give them a free tip: double your price, and you will probably sell more.