The Psychology Behind Affordable Luxury

The Bagsnob recently alerted us to a bit of fashion insanity: Coach has put a $10,000 pricetag on its Legacy collection Alligator bag.

Those who commented on the post were justifiably shocked and befuddled, and demanded to know if the execs at Coach had lost their minds.

We, too, wondered if they'd gone off the deep end, but were determined to uncover the method behind their madness—and we found at least one good explanation on WSJ.com (Ok, maybe not good but certainly apt): Luxury brands apparently need to create high-priced anchor items in order to fool consumers into purchasing their lower-end, and hence "affordable luxury" items instead.

In other words, the lovely people at Coach would like you to covet the 10k gator bag, then satisfy your needs by purchasing a $200 Coach hobo bag instead as a sort of consolation prize.

This reasoning makes sense to us, because we've succumbed to this sort of thinking ourselves. We've certainly bought designer sunglasses or t-shirts or keychains just to get a piece of the action. And apparently, that's exactly what designers want us to do. According to the WSJ article, "accessories like sunglasses, fragrances, and logoed belts drive the sales of companies like Gucci and Louis Vuitton."

We've also been tempted to buy Marc by Marc Jacobs because it's cheap compared to Louis Vuitton, or Miu Miu compared to Prada, and well, the list goes on.

Our advice for outmaneuvering marketers is to simply know your budget, know your values and then stick to them. It's hard not to draw comparisons, but if your budget for a winter coat is $200, then don't buy a $300 designer coat just because it's on clearance at a sample sale.

But what about you? Are you swayed by the astronomical pricetags of certain designer goods? Is your frame of reference a blur because of them?