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Luxury product packaging: an incredible parallel market

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Vuitton paper bags that sell for a few euros, empty Hermès boxes for a few dozen euros, luxury watch cases without their precious watch for several hundred dollars. Classified websites are full of this type of offer. How can we explain that objects that seem so insignificant find a buyer? From where does their value come? This article explains the role of packaging in the buying experience and analyzes why some people are willing to pay thousands of euros to get a watch box or a cardboard box. The video below, in which a luxury watch dealer explains that someone proposed $20,000 for a Patek Philippe cardboard box, sets the tone.


Summary


An integral part of the customer experience

To begin with, we need to look at packaging from the perspective of the customer experiencePackaging is an integral part of the customer experience. It must prolong the excitement of the customer who, once home, will unpack the product. It must also magnify the content. It must borrow the same luxury codes as the product itself.

Luxury brands use several strategies to transmit their values through packaging. In doing so, they also make customers want to keep the containers.

Communication

Ad for Vuitton with Alicia VikanderThe preciousness of the packaging is highlighted in the communication of the brand, for example, at Vuitton during its campaign “Holiday 2020,” where actress Alicia Vikander embraces a Vuitton box. As you can see in the picture, the packaging is the star of this ad, the only other visible code being the monogram of the sleeve.


Materials

The packaging is sometimes made from high-end or even noble materials. Watch brands are used to this type of strategy. Patek Philippe delivers its watches in exceptional wooden cases (see video below), and Breguet has custom-made cases realized for its most precious models.


Personalization

To make a package unique, what better way than personalizing it to the customer’s taste. Guerlain proposes a wide range of personalization options for the perfumes in its l’Art et la Matière line. Customers can have a message engraved on the bottle, choose the cap, change the cord around the lid, and the color of the seal with the effigy of the bee.

Guerlain l'Art et la Matière

On the Guerlain website, it is possible to personalize the bottles of the Art et la Matière collection.


Design

Design is, of course, an essential component of packaging. To stand out from the crowd, some brands go very far. Blancpain, a luxury watch brand, went very far for the release of its model for the 20th anniversary of the moon phase. They created an aluminum case reproducing the relief of the moon’s surface, especially for this occasion.

blancpain anniversary moonphase box

This solid aluminum watch case reproduced the moon’s surface and accompanied an anniversary model of the Blancpain brand.


Innovation

The packaging can also be where the brand’s innovation is expressed. They can also use this innovation to convey a message in some cases. For example, Ruinart has launched an eco-designed packaging that aligns with its CSR policy.

Eco friendly packaging Ruinart

Eco friendly packaging Ruinart 100% recyclable


Objects that allow you to have access to the world of luxury

Since packaging is an integral part of the customer experience, the customer can “live” the luxury experience through it. The packaging thus becomes desirable because it forms a whole with its content (see also the section on value below).

This desirability is expressed in particular through social networks. It is no longer necessary to own the content to enjoy the benefits of the brand. Posting yourself with a luxury brand’s packaging (who can tell if it’s empty) is enough. With desirability comes financial reward. That’s how empty packaging ends up on websites like Vinted, Vestiaire Collective, or eBay. The unboxing videos are probably not foreign to this phenomenon.

hermes box bags Ebay

A typical advertisement such as we can find on second-hand websites. This one comes from eBay and proposes to sell cardboard boxes and paper bags for prices ranging from 10€ to 40€ each.

You can find the most diverse items on second-hand websites: empty boxes, dust bags, hangers, empty perfume bottles, shoe trees, and various and varied boxes. As long as the brand or logo is displayed and recognizable, there is a demand. Hermes boxes and watch cases are at the top of the list (some of which can cost more than 1000€).

“Research” done by the British magazine Money in April 2021 claimed to establish a ranking of the most expensive luxury packaging. Watch cases occupy the top of the hierarchy. Rolex takes the first place with an average value of £160. The presence of other objects in the ranking remains rather strange: Louis Vuitton shoe box for £74, Louboutin paper bag for £54, empty Chanel perfume bottle for £54. Apart from the watch cases, we have not been able to confirm the prices of the other objects.

dust bag gucci Vestiaire Collective

A protection for Gucci handbag on sale on the website Vestiaire Collective

Nevertheless, these objects are sold on second-hand websites. Is it because they transfer some of the magic of the brand? Or is there a more prosaic explanation? We will analyze this in the next paragraph.



An item that does not have all the attributes of a new one has less value.



The value of the product is higher with the packaging

Beyond the supposed properties of packaging, there is a more prosaic reason for the craze for packaging: the value of the whole. An object that does not have all the new attributes is indeed less valuable. This is especially true in the used watch sector.

The assessment tool of Chrono24, a global platform dedicated to luxury watches, thus proposes 4 levels of completeness:

  • the watch alone
  • with the box only
  • with the papers
  • with the box and the papers (“full set”)
chrono24 appraisal process

The Chrono24 platform proposes an assessment service for watches. Four levels of completeness are taken into account to determine the price.

The price differences can be considerable; the mere presence of papers can justify a difference of several thousand Euros. But why pay several thousand Euros for documents that will remain in a file cabinet or a box that will sleep in a cellar?


The presence of the original box and papers can result in a 3167€ premium on the Patek Philippe 3940J model.


The interest of packaging lies in its capacity to increase the value of the naked object. The virtue of packaging lies in its ability to reproduce the original state, i.e., at the purchase of the new product. We, therefore, see the appearance of quite singular ads in which the product is sold with a maximum of these attributes: paper bag, price tag, sticker, and transparent plastic sleeve, …. which are intrinsically of no interest. In this respect, the ad below is quite typical. The various “papers,” including the commercial leaflets and the price tag, are well highlighted.

Patek Aquanaut full set

A Patek Philippe Aquanaut watch on sale on the website Chrono24. It is photographed with all the “attributes” of new: box, various papers and even the price tag.

The presence of the objects accompanying the new product has a potentially significant effect on the value of the set. The difference in value increases with the price of the watch. From 202€ for a Tag Heuer Monaco, the difference between a watch alone and a complete set rises to 788€ for a Rolex Submarine Date and 3167€ for a Patek Philippe 3940J.

Objects in the metaverse: the next frontier for luxury brands?

The metaverse is another field of conquest for those who cannot yet afford physical products. Beyond the crazy price of some NFTs, some luxury brands are present in the metaverse. Internet users can buy “skins” bearing the effigy of major brands. If some of them can be particularly expensive (see the examples of Nike and Gucci here), most of them can be exchanged for a few euros.

The metaverse is becoming a new entry point for a clientele willing to display themselves with branded objects.


Conclusion

Packaging is presented as a market in itself, attracting customers looking for the codes of luxury without really being able to afford them. In this respect, we observe that all kinds of packaging are sold on second-hand websites. We could not confirm most of the prices announced by Money magazine. Except for watch boxes, the prices of cardboard boxes, dust bags, and other hangers were much lower than advertised.

To understand this market, it is essential to understand the place of packaging. First of all, it is an integral part of the customer experience. As such, it transmits the brand’s codes. Secondly, its presence allows to symbolically reproduce the moment of purchase, i.e., the moment when the new object first passed through the hands of the consumer. Therefore, the packaging can undoubtedly be appreciated “on its own.” Still, the market is undoubtedly also driven by consumers who seek to gather all the elements that testify to this “birth.” This desirability of the packaging (and all the other objects that accompany it) is particularly prevalent in the luxury watch market. The difference between a watch alone and a “full set” can reach several thousand euros for specific models.

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Author: Pierre-Nicolas Schwab

Dr. Pierre-Nicolas Schwab is the founder of IntoTheMinds. He specializes in e-commerce, retail and logistics. He is also a research fellow in the marketing department of the Free University of Brussels and acts as a coach for several startups and public organizations. He holds a PhD in Marketing, a MBA in Finance, and a MSc in Chemistry. He can be contacted by email, Linkedin or by phone (+32 486 42 79 42)

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