Birkin Hermes From Luxury to Profitability: Embodiment of the Investment Strategy in Luxury

Abstract

Luxury in the third millennium has become a symbol of consumer identity, no longer exclusive to a specific class but accessible to all. One of the most prestigious luxury brands, Birkin Hermès, is renowned for its exceptional craftsmanship and unique marketing strategy. Each model is handcrafted in Hermès workshops in France, with some designs requiring up to seven years of training to master. Limited production, coupled with rising global demand, has increased the rarity of these bags, making them an investment surpassing gold, as their value appreciates immediately after leaving the store. Birkin bags are not available to everyone; only customers with a strong purchase history with Hermès can acquire them, further enhancing their exclusivity. This strategy has positioned Birkin as both a fashion and investment icon, with resale values reaching up to 130% of the original price, outperforming traditional assets like gold and diamonds. According to Baghunter, Birkin’s value is expected to increase by 8 to 10 times in the coming decades, solidifying its status as a smart investment. Luxury brands rely on unique marketing strategies and in-depth consumer behavior analysis to drive demand. This study aims to analyze Hermès’ marketing strategies and their role in maintaining luxury goods' status, using a qualitative approach to understand consumer behavior. The study is divided into three sections: the concept of luxury, Hermès’ strategies, and findings and recommendations, providing a comprehensive view of sustainable investment in luxury products.