Luxury brands must inspire as recession risk rises
As recession risks loom large over the global economy, luxury brands are facing unprecedented challenges in maintaining consumer loyalty and perceived value.
Over the past two years, many brands within the industry have implemented significant price hikes, often without improving quality or adding perceived value. This has led to a loss of trust and alienated even the wealthiest consumers.
Younger generations, in particular, feel uninspired by many luxury brands, signaling a deeper crisis in how these companies communicate with their most important audiences for future growth.
This disconnect is particularly dangerous during economic downturns and periods of uncertainty, when consumers become more selective about their spending. Just as the industry was starting to recover from the self-inflicted wounds of the last two years, the threat of a recession, fueled by the trade war and tariffs, has sparked panic in many boardrooms.
Ferrari and Porsche have already announced price increases, and I expect many other brands to follow suit in the coming weeks.
However, when brands raise their prices simply to offset higher costs and margin losses without first strengthening their value proposition, these increases are likely to backfire — much like what happened when many brands became overconfident after the pandemic.
How to raise prices in times of uncertainty
Obsessing over how to create extreme value is not just the prerequisite for raising prices; during times of volatility and uncertainty, it becomes a critical mission. In these periods, storytelling becomes the single most important lever for creating perceived value in luxury.
A compelling brand story connects emotionally with clients and inspires them to see your brand as extraordinary. This makes storytelling a key area of investment, even in the face of economic pressures.
Unfortunately, many brands fail to optimize their storytelling because they focus too much on product features, rather than on how their narrative resonates with clients’ aspirations and emotions. On top of that, many brands see storytelling as just a marketing task, akin to creating a new advertising campaign.
I can't stress this enough: brand storytelling is not advertising. It’s about clarifying and expressing the core value of a company — the one reason why people should care. It’s about clarifying the “why” and highlighting what sets a company and its brand apart — not from a product standpoint, but from its core ethos. It’s answering the question: What are we really selling? Once the story is defined from the client’s perspective and the brand’s role in their life is clear, only then can you create a campaign that brings that story to life.
However, many brands don’t execute this well. Many simply follow the crowd, falling into the same of sameness, while others will make their brand stories overly complex or fragmented. In an attempt to appeal to everyone, they end up saying too much — and, as a result, appeal to no one.
A different approach to storytelling #
Instead, brands should focus on a singular point that truly matters to the client. This should be client-centered, not product-focused, as the latter weakens its emotional impact.
To inspire clients in uncertain times, luxury brands must simplify their storytelling and amplify its emotional resonance. This requires refining the brand story to evoke desire and aspiration while addressing deeper psychological needs like belonging, inspiration, or self-expression.
When my team and I do this for our clients, the process takes at least three months and is ultra-systematic. Too often, companies rush this exercise or fail to invest adequately, leading to disastrous results. A brand is a company’s most valuable asset and deserves to be treated as such. In luxury, the majority of value is unlocked through storytelling, so it’s essential to make this a priority.
From 4Ps to 4Es #
Storytelling is also central to my 4Es of luxury, which stands for Emotion, Experience, Engagement, and Exclusivity. This model replaces outdated concepts like the 4Ps of marketing (Product, Price, Place, and Promotion), which was developed in the 1960s to sell mass-market products — the opposite of what luxury is about.
The 4E framework requires companies to build a client-centric ecosystem around a compelling brand story, focusing on what truly drives value in luxury.
Emotion is about crafting stories that spark desire. Experience involves creating immersive interactions that make clients feel unique. Engagement means building ongoing dialogues with clients through personalized touchpoints, which are key to fostering loyalty, advocacy, and long-term relationships. Lastly, exclusivity ensures your brand stays aspirational by maintaining scarcity or making clients feel valued.
Amid economic uncertainty, these pillars become even more essential, distinguishing brands from competitors facing similar challenges. Brands must inspire their clients emotionally by delivering a brand story that is simple yet powerful enough to evoke desire and aspiration. Crafting this story is an art that requires incredible precision, but it is crucial for success.
Even without the erosion of their investments and a grim economic outlook, today’s luxury clients still demand more inspiration than ever. In turbulent times, luxury storytelling is a matter of survival — don’t let it become your weakness.
https://jingdaily.com/posts/trade-war-and-tariffs-why-luxury-brands-must-inspire-as-recession-looms
