Customization in Luxury Brands: Can Valentino Get Personal?

Abstract

Luxury brands have started to offer consumers the opportunity to customize their exclusive products by making certain aesthetic decisions, such as the color, fabric, or cut of their products. A robust finding in the marketing literature is that consumers place a greater value on customized than on standard products because these unique products better fit and communicate their tastes, preferences, and identity. However, the majority of focal products in these studies fall outside the luxury segment. The authors demonstrate that consumers’ customization preferences differ between mainstream and luxury brands. In the luxury segment, consumers pay a premium for the designer’s expertise and the status that it can convey. As such, the consumers’ desire for self-expression can potentially erode the product’s signaling value. Through a series of four experiments, the authors demonstrate that luxury brands can benefit from customization but they can also take customization too far. Their findings suggest that brand managers should allow consumers to make fewer design decisions for luxury versus mainstream brands to preserve the signal value created by the designer.