David Rosenthal: belief

Transcript context

…Yes, and art is exactly the right way to put it. There is no utility to these displays. These displays, much like any advertising that you see of Hermes today, it's not about the product, it's about how you feel. I think this is an interesting place to revisit this idea that we talked about on the LVMH episode of luxury versus premium, where premium means you pay more and you get more utility out of a given product. I pay for a bigger storage space on my iPhone and I get more utility out of that. I can store more photos. Luxury means you pay more literally because it doesn't create more utility. It is either more pleasing to you intrinsically for the feeling, or it's an extrinsic signal where you are signaling to others that you have the means to spend on this item, even though it doesn't provide more utility. It's a despite rather than a because. Art does fall on this spectrum. Art is like luxury taken to its logical extreme. It has actually zero utility. A Birkin bag is a piece of art, but at least it also carries your stuff around. Luxury products are this interesting midpoint between extreme functionality but also artwork. When you buy an air mass product, you aren't just buying the product, you're buying a piece of art a piece of their heritage, a feeling that connects you to the maker and the place it was created. You're trying to buy a piece of Hermes' heritage and reputation, and hoping to adopt it as a part of you, as a part of your identity. You are seeking whether it's conscious or not to let other people know about this too. You're not necessarily trying to signal it to everyone, but you do want to signal it to the right people who would appreciate it. There's this genius aspect to what Hermes is doing and what Robert's doing with the arts like these window displays. The Luxury Strategy book talks a lot about this. When you're selling luxury items, they can't just be art. They need to have some utility to them. You will never see any of these brands, Hermes included, become art galleries. They're not selling paintings, but it's critical for luxury brands to have a connection to the arts. I think you realize this before anybody of like, the windows in our stores are these portals into this world of dream and art. You'll come in and you'll buy a scarf that you'll wear. You'll buy a bag that you'll use. Maybe you'll buy a tie, maybe you'll buy a wallet, homewares, furniture, or any of the other things over time that they sell. That will have utility, but it's connected to this dream. Yes, you're taking a piece of that dream with you, and it's almost a daily reminder of the dream that you're now participating in. The key insight is that by adopting art as a critical piece of the bundle that is your product. It enables you as the seller to completely switch tracks to disconnect from any evaluation of value.…

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