The Commoditization of Luxury

Today, the term luxury has become ubiquitous. To attain aspirational attributes, products not traditionally perceived as luxurious are associating themselves with luxury, which confuses its meaning. The term is also lost when luxury brand managers are pressured between choosing to increase sales by reaching a wider range of customers where they lose sight of luxury’s unique values and opting to guard their brands by adhering to its exclusivity and selectivity. This article explores the pitfalls that luxury companies face in today’s competitive luxury market and how counteracting strategies may lead to the commoditisation of luxury brands. These may result in the loss of luxury brands’ positioning and differentiation in the market. Recommendations to luxury goods companies are offered, presenting different tactics to avoid negative consequences of luxury brand commoditisation and methods to manoeuvre well in business environments where industries are inevitably turning brands into commodities.