A Timeless Loyalty:

Buying Luxurious Brands without Luxurious Money

Caroline Crew, Matthew Gonzalez, Mackenzie Greene, and Stephanie Michalak

Professor Sredl
Loyola University Chicago
MARK 310-101 at 1 PM
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1.) Business Problem

How do we solve the problem of luxury cult brands utilizing the loyalty of younger

generations, specifically consumer between the ages of fourteen and twenty-five, who are

buying brands they cannot afford?

In 2017, the luxury clothing brand, Gucci, made $1.44 billion in revenue (Forbes,

2017). Even more astounding is the whopping $12 billion that Louis Vuitton, another high

end clothing company, brought in as revenue in 2017 (Forbes, 2017). These companies,

which sell high quality products, have been able to make such high profits by vastly

overpricing their products and marketing to young consumers between the ages of fourteen

and twenty-five. This practice of targeting such young consumers is unethical and potentially

threatening to the financial well-being of our future generations.

2.) Why It Is Important

Luxury cult brands understand the younger generation's obsession with image and

style, manipulating them to spend unnecessarily. These luxury cult brands know that

teenagers and young adults are attached to luxury brands. Also, they know how to market to

these generations, even though these consumers do not have the money to spend. These

brands—such as Supreme, Gucci, and Louis Vuitton—sell a lifestyle along with their

products in order to establish a timeless loyalty. Young consumers are tricked into believing

that these brands establish their identity. The loyalty to these brands is built over time, using

social media influencers such as celebrities, musicians, and reality stars--all in order to

correlate their products with a particular lifestyle. Today’s younger generation, between the

ages of fourteen and twenty-five, are extremely susceptible because they are pressured by

acceptance, personal image, and social norms.

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Luxury brands convince consumers that the money they spend is worth it for the

product and lifestyle they buy. These young people believe the material value of the products

they buy improve the overall value of their lives. Instead of young consumers saving up for

cars, homes, and education, they save up for luxury clothes that they believe establish their

identity. These brands are creating long-term detrimental effects on their consumers’

finances.

Brands are fully aware that they are marketing the “lifestyle” that comes with their

products. Brands know that the younger generations will be hooked for the entire duration of

their lives. In a capitalistic society, consumers are not saving their money, and these brands

are fully aware of this fact. Capitalism gets in the way of consumers understanding the true

value of money since they are constantly spending money—striving to achieve self-

actualization, which they never will through materialistic possessions. This creates a cult

brand. The underlying problem is capitalism.

Additionally, these luxury brands are creating and feeding off of self-esteem and

confidence issues among the younger generations, because they are so worried about

conforming to social norms in the fear of not being accepted. This could create lasting effects

based on a young person’s impressionability. Marketers understand what attracts younger

generations to buy their brands, and they continue to manipulate young consumers. Brands

are aware that these consumers are easily influenced by materialism. These brands use social

media and influencers, knowing that these channels are direct and effective means of

marketing to this age group. The reason this is such an issue is because this age group is the

future. How do they expect to buy a house or a car when they are spending unnecessarily on

brands that have much more affordable and equally practical alternatives?

3.) Who is this age group?

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The age group most susceptible to luxury cult brands are those between the ages of

fourteen and twenty-five years old--a mixture of Millennials and members of Generation Z.

This age group desires being on trend over anything else. This is something new to this

young generation, in comparison to other, older generations. The Chief Analyst at NPD

Group defines this generation as having “style on their minds” (Cohen, 2016). This validates

the argument that this generation is motivated by materialism--which luxury brands take

advantage of.

4.) What is wrong with capitalism?

Capitalism is a social and economic system practiced globally. Production and

distribution is controlled privately, rather than by a state. These producers and distributors are

motivated by profit, rather than satisfying consumers’ wants or needs. In a Southern Journal

of Philosophy article, Rachel Jaeggi explains that there are “functional, moral, and ethical”

problems with capitalism (Jaeggi, 2016). The problem with its functionality, is that capitalism

leads to dependence. Consumers grow attached to the things that they buy and identify with

these products. The moral and ethical issues are more explicitly troublesome (Jaeggi, 2016).

Brands exploit their consumers, knowing that they will buy products to establish a certain

lifestyle, which ultimately has negative and long-lasting emotional impacts. A critic of

marketing, Mark Tadajewski, writes that capitalism’s “overriding profit motive” which is

practiced by almost all companies can be “detrimental to the interests of society”

(Tadajewski, 2008). Companies functioning a capitalistic system are more concerned with

making money than satisfying their customers, which is extremely problematic.

5.) What is a cult brand?

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A cult brand is defined as a brand that has “achieved a unique connection with

customers and created a consumer culture that [they] wish to be a part of” (Fournier, 1998).

Cult brands are described as a mixture of “love and madness.” These brands strive to

symbolize a specific lifestyle and become an inherent part of the consumer’s identity. Cult

brands create cult followings by tapping into people’s inherent desire for a “greater sense of

belonging” (Villarica, 2011). Consumers are easily pressured by acceptance, personal image,

and societal norms. Brands willingly exploit this.

Additionally, brands develop a passionate community of consumers. These consumers

are convinced that they are buying into a luxurious lifestyle amongst other individuals. These

relationships allow community members to believe they are relatable to one another, leading

them to continue to buy into the community. These brands promise to deliver “consistent,

extraordinary benefits” for their consumers, tapping into their belief that the products they

buy establish their identity.

In order to create this cult following, brands know they must understand what attracts

younger generations. These brands utilize the things younger generations have access to.

Brands know that younger generations are influenced by the peers around them. This

generation is motivated by social norms and they constantly fear that they will not be

accepted. This age group is known for following the influence of their peers. Brands take

advantage of this by establishing a mindset of what is “socially acceptable” and how to fit in–

within their communities.

5b.) Who are these brands?

Luxury cult brand examples range in terms of what is being sold, although they

primarily sell clothing and fashion based products. Examples include Gucci, Supreme, and

Louis Vuitton. Louis Vuitton is the largest, valued at about $29.2 billion in 2017
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(Badenhausen, 2017). The products that these brands sell range in price, for reference, a shirt

from Louis Vuitton currently ranges from between $800 and $3,500 (Louis Vuitton, 2018).

These brands are highly fashionable and they keep up with the current trends. They each have

their own unique trademarked styles. For example, Gucci has trademarked their extremely

recognizable loafers with metal horsebit-like metal accents on the front of each shoe. These

brands are easily recognizable but are extremely expensive (Gucci, 2018).

One of the younger cult brands, in both consumer age and years open, is Supreme.

Supreme sells street clothes designed for skaters, and they are known for their famous red

box logo. Supreme is a unique brand amongst the other luxury cult brands because of its

distribution model. Supreme only drops products every Thursday, which they have named

“drop days”. On these drop days, Supreme releases their products online and in-store. This

method of having limited days to purchase with such a high amount of consumers, in

combination with having only six locations, makes these products difficult to acquire

(Supreme, 2018). Customers have been known to sleep outside the store at night in order to

secure their spots in line for the morning. Supreme’s website also constantly freezes and

breaks down from the high volume of consumers attempting to buy their products online,

frustrating consumers even further. So if you are too far from a flagship store, you cannot

make it to the store on Thursdays, or you cannot click fast enough online, you will have a

very difficult time obtaining Supreme products. Due to this strange method of selling,

Supreme consumers have taken to shopping on resale sites. Supreme products resell for

drastically more than originally purchased, with $30 shirts being resold for up to $1000 each

on online resale sites (William, 2012).

Supreme has a fantastic reputation in the young male community, and has used its

method of distribution to make their brand into a household name. By making their products
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difficult to obtain, they have simultaneously added value to their products worth, making

Supreme a highly sought over cult brand (Williams, 2012).

5c.) How do cult brands target?

The younger generation’s access to social media has become a part of their daily

routine. With the younger generation being “an impulsive group who will turn adverts off”

(Valiando Rojas, 2016), luxury brands have resorted to a more subtle but equally effective

way of marketing through social media. A Mintel Report about social media and women’s

clothing found that the number one influencer for women between the ages of eighteen and

twenty-four is social media, with “nearly nine out of 10 women [being] impacted by some

form of media when buying clothes” (Smith, 2017). So, brands market extensively over

social media to attract the younger generations.

Brands utilize social media influencers to promote their brands as a daily lifestyle.

These brands gift their products for influencers to post which followers see, creating a desire

for their products. The reasoning behind why these brands position their products with

influencers is because it becomes attainable to consumers since these influencers are

everyday people with quick fame. These influencers, such as Lil Pump, Lena the Plug, and

Arden Rose, typically fit into this age group, which immediately makes them relatable. When

influencers post luxury products as being a part of their day-to-day routine, it encourages

consumers to believe they can mirror these lifestyles.

Brands also use celebrity social media accounts to promote their products. It is

important to understand that this tactic is very different than using social media influencers,

because celebrities have much higher status. These celebrities have a much larger following,

are more widely known, and have many outlets to promote to fans. When celebrities post

about their luxurious lives, consumers are provided with something they wish they could
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attain. When a consumer purchases something that a celebrity has posted about, it

immediately connects them. This is a way brands can easily establish that artificial lifestyle

that their products provide.

Social media also allows consumers to be actively involved in a brand. Twitter is an

easy outlet to connect to a consumption community, as consumers are constantly tweeting

about luxury brands and the difficulty, yet willingness that comes with buying their products.

Along with giving their own opinions, Twitter allows consumers to quickly and directly

communicate with brands, creating a positive relationship, building a stronger bond, leading

to more loyalty.

Another aspect of the consumer that brands utilize is the habit of online shopping. The

younger generation’s access to technology shortens the buying process. They no longer have

to spend time contemplating purchases as products have become just one click away. Luxury

stores typically have intimidating environments, potentially scaring away younger shoppers.

The younger generation’s accessibility to a convenient way to shop has become habitual—

increasing the value and importance of a brand’s electronic commerce availability.

This generation has allowed materialism to take over their lives. Consumers believe

that materialistic possessions define their self-worth. Consumers buy in order to feel a sense

of identity. Additionally, consumers identify themselves by the communities associate with

the products they buy--which they can find on social media. All people are all born into

communities associated with age, social class, and geographic location. These communities

can become as specific as familial, race, and religion. However, as consumers grow older,

they get to choose certain communities they want to fit into. Consumers begin to seek

communities that also use materialism to provide the image they desire. These consumers

begin to trust that buying certain products will provide them with a luxurious lifestyle, which

they believe will elevate their self-image resulting in increased self-esteem and happiness.
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Ultimately, brands claim to fulfill these things, apparently providing a sense of belonging in a

community chosen by the consumer.

6.) Why youth is so susceptible and why do they wish to buy brands?

Luxury brands target the youth because of their susceptibility and impressionability.

Between the ages of thirteen and nineteen, an individual’s brain has more synaptic

connections than an adult, making them far more impressionable. Using this, luxury brands

have been able to program the minds of the youth with the message that their brand is

superior by using targeted advertising that implies that their products will help you live a

better life. Once this message has been repeated thoroughly, it develops in their minds that

these brands are superior and thus desirable, creating a possible lifelong follower of the

brand. While this method of developing brand loyalty by targeting the most impressionable

population is clever, it is far from ethical.

The kinds of ads these brands create focus on beautiful people partaking in glamorous

activities. They seek out celebrities with large teenage followings and photograph them

wearing their brand head to toe. The ads are typically plastered around shopping malls and

billboards, and the repetition of the brands reinforce young individuals’ positive image of the

luxury brand. These ads send the message that if you want to be like the celebrity pictured,

you should wear their brand. By continuing these ad campaigns for years, many teenagers

have been permanently manipulated into a lifelong false fondness of the brand.

Another reason brands target the youth is because they understand the young

consumer’s wish to achieve self-actualization and self-identity. The younger generation

believes that self-identification is achieved through materialism possessions they buy. The

higher end the product is, the better the consumer’s representation and reputation. Young
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people who believe that their identity is connected with how they appear are perfect targets

for luxury brands who pride themselves in selling high quality products.

The younger generation continues to be a perfect target because of their self-esteem

issues. A study from The Journal of Experimental Social Psychology by Niro Sivanathan and

Nathan C. Pettit states that, “low self-esteem is the leading factor in whether a person will

buy a products regardless of their capability to afford it.” This highlights the reason why

young adults are so susceptible to the marketing efforts of luxury brands. The study done by

Sivanathan and Pettit found that individuals tend to spend more in order to alleviate the stress

and pain from low self-esteem issues. This study really sheds light on why the age group with

the highest levels of low self-esteem and some of the lowest income levels are so susceptible

to luxury brands (Sivanathan, Pettit, 2010).

These low self-esteem issues also feed into the youths’ desire to fit in. The desire to

fit in and the need for acceptance are genetically engraved in most humans, and is noticeably

prevalent in the younger generation. Young adults tend to follow fashion trends that make

them feel more secure in society. Luxury brands benefit from this pursuit for acceptance,

because through the brand influencers that were previously discussed, they are able to set

fashion trends. They have the ability to create and control certain trends, including their

prices, which is ultimately damaging for young adults. These trends are heavily supported by

the bandwagon effect, which in this case is when people buy a product because other people

are also buying that product. The younger generation is extremely susceptible to the trends

and the bandwagon effect because they are so motivated by the need to fit in (Conner, 2013).

7.) Effects on the youth

This bad habit of buying luxury items that young people cannot afford at a young age

creates a bad habit for their future spending behavior. When they become accustomed to such
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high spending early, their brains develop an acceptance of this type of high spending for life

(Reis, 2015). This lifelong habit of overspending is detrimental to the youth because they will

have difficulty saving for bigger future purchases, such as cars, college, and houses.

8.) Solution
The younger generations who are actively buying luxury products are no longer

learning the skill of saving money. They are manipulated by capitalism and controlled by

materialism. Studies have shown that there are negative, long-term effects of buying luxury.

For example, relying on a mindset that they need the approval of others and need to be

defined by these brands. They have to learn not to be controlled by material value. This may

be difficult to move away from but consumers need to realize that their self-worth is not

defined by materialistic possessions—even though our capitalistic and materialistic society

drives us to believe this. Ultimately, consumers need to get out of the cycle of buying

luxurious brands simply to gain status to fit into their community. This way, the younger

generation can value other things that will truly define who they are and they can work on

their self-image.

The solution to our business problem is that consumers need to be truly aware that

these brands have similar, significantly cheaper and equally as effective alternatives. These

younger generations need to explore the alternatives and learn to shop affordably in order to

afford other priorities. Some alternatives include Urban Outfitters, Nike, Under Armour,

H&M, Zara, Forever XXI, which all produce items of similar quality with vastly lower

prices. Our solution comes down to young consumers becoming aware and understanding

that capitalism is taking advantage of them by influencing their poor spending habits. This

must change in order for them to be able to save money, allowing them a chance at a stable

financial future.
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