Revealing the tactics prestige brands use to keep buyers coming back for more

From the Spring 2024 issue of Kanebridge Quarterly magazine. Order your copy here.

In the world of luxury fashion, few items evoke as much desire and exclusivity as the Hermès Birkin bag.

Conceived 40 years ago, as legend has it, after a chance meeting between actress Jane Birkin and then Hermès chairman Jean-Louis Dumas on a flight from Paris to London, the coveted rectangular hold-all now has a folklore all of its own.

From rumoured ‘pre-spend’ requirements to stories of eager customers wooing Hermès sales assistants with freshly baked cookies just to get on the waitlist, Birkin lore persists because it can be tough to fact-check anything about the bag, its pricing or the brand’s distribution and sales practices. Hermès is notoriously tight-lipped and didn’t respond to requests for comment for this article.

Hermes is rumoured to encourage ‘pre spend’ purchases before buyers can access more exclusive products. Image: Shutterstock

But this phenomenon is no accident; it’s the perfect example of a meticulously crafted strategy employed by luxury brands to create a sense of urgency and prestige around their products.

“Storytelling, a strong brand narrative and engaging customers emotionally is so important in the luxury retail space,” says Dr Edwina Luck, senior lecturer in advertising, marketing and PR at the Queensland University of Technology.

“Then this is backed up with strategies such as creating scarcity around a particular product or line, which is exactly what Hermès do with the Birkin, to further create that very real sense of exclusivity that drives the luxury sector.”

Dr Edwina Luck says clever marketing has made luxury brands appear more exclusive than ever. Image credit: Sonja de Sterke

According to global research firm IBISWorld, Australia’s luxury retail industry has grown 6.9 percent on average per year between 2018 and 2023 and is now worth more than $6.2 billion.

This is despite a trend during the pandemic for some brands such as Tiffany & Co. and Burberry to reposition parts of their business as ‘masstige’, meaning the perception of exclusivity in relatively affordable goods.

It’s a shift that has been exacerbated by the popularity of social media and overt influencer and celebrity endorsements driving such brands to a younger audience than has traditionally been associated with luxury retail.

“What all of that has done is actually make those ultra-luxury brands such as Hermès and Cartier even more exclusive,” says Dr Luck. “So, the gap is widening and as far as luxury brands and consumers are concerned, the more exclusive the better.”

Exclusivity has long been a cornerstone of luxury branding, creating a unique allure that sets high-end products apart from the mass market.

Limited production runs, personalised shopping experiences, and even the physical design of stores (think closed front doors and roped-off entrances) all contribute to the perception that these products are not just items, but experiences worth striving for.

Pre-spending — the concept that a consumer needs to build a “purchasing profile” that justifies their right to buy a certain product — is another tactic that brands use to build a deeper relationship between the consumer and the brand, creating a tiered connection that fosters loyalty and aspiration.

This initial investment, such as a scarf or a wallet, can serve as a gateway to the brand’s more exclusive offerings, such as particular product lines, limited-edition collections or bespoke fashion pieces.

“These strategies turn shopping into an event,” says Kelly Brown, co-founder of retail strategy agency, The Working Party.

“The anticipation, the thrill of securing a limited edition, the urgency of pre-spending — all these enhance the consumer experience.

“Luxury shoppers aren’t just buying a product, they’re buying a story, an experience, and a sense of belonging to an exclusive club. It’s about making them feel special and valued, which is exactly what consumers expect from luxury brands.”

Kelly Brown says Luxury buyers are purchasing more than a product.

The concept of scarcity isn’t new for high-end brands either. Enzo Ferrari, the father of the Italian luxury sports car manufacturer famously said, “Ferrari will always deliver one car less than the market demands”.

“Ferrari highlights a fundamental principle in luxury branding: the deliberate creation of scarcity,” says Jon Michail, CEO of corporate and personal brand image advisory Image Group International.

“This technique is not just about limiting supply but about crafting a positioning and image of exclusivity and unattainability that even Lamborghini could not beat.

“Scarcity creates urgency and elevates perceived “psychological” status, crucial elements for luxury brands. This perception is vital as it differentiates luxury brands from mass and mid-market options, reinforcing their unique value proposition and maintaining their premium and/or ultra-premium positioning.”

So, what’s next in the luxury sector? Experts predict luxury brands are likely to explore new and creative ways to further enhance their exclusivity and appeal.

“I see luxury brands are set to adopt more personalised and experiential techniques to enhance exclusivity and desirability,” says Brown. “A sophisticated online presence is now essential, but we’ll see luxury brands take more control over their sales channels, particularly online, by reducing distribution through online multi-brand retailers.

“This shift allows them to own the customer relationship which reinforces exclusivity and brand loyalty.”

As for the five-figure Birkin, retail insiders say only customers with an extensive purchase history with the French brand are offered the opportunity to buy one directly from a Hermès boutique.

However, pre-loved bags can often be found through online reselling websites such as priveporter.com (at the time of writing the lowest price Birkin available on priveporter.com was $AUD36,056).

According to Vogue, Hermès “boutiques have their own style offering, with infrequent deliveries and little notice as to which colourways or finishes will be available to purchase at any given moment. For this reason, customers who want a brand new bag should enquire in store and seek advice from Hermès sales experts”.

Even then, they can be hard to pin down, with Birkin bags, and the equally popular Kelly bag, subject to stringent quota systems worldwide.

Good luck.

Reporting season has once again reminded investors that a strong profit does not guarantee a rising share price, and a large loss does not always trigger a sell-off. What matters most is how each result compares with expectations and, increasingly, what management says about the year ahead. During the August 2026 season, companies offering credible turnarounds or unexpectedly strong guidance were rewarded handsomely, while those flagging weaker margins, slowing demand or greater uncertainty were punished.

The following ranking draws on Morningstar’s review of 164 ASX-listed companies and measures each company’s share-price movement on the day it reported. This captures the market’s immediate response to the earnings announcement, before subsequent economic developments, dividends and company-specific news cloud the picture. Here are the five biggest winners, and the five hardest-hit losers, of the season so far.

The five winners

1. Bapcor (ASX:BAP): +41.0%

Bapcor delivered reporting season’s largest relief rally after presenting early evidence that its troubled automotive-parts business was stabilising. Although underlying revenue fell 1.8% to $1.92 billion and underlying NPAT collapsed 85% to $10.8 million, underlying EBITDA of $152.5 million exceeded guidance.

More importantly, working-capital initiatives released $68.5 million in the second half, lifting cash conversion to 109.4% and reducing net debt by 63% to $135 million. The statutory loss was $431.6 million, largely because of non-cash impairments. Investors focused on improving operational momentum, stronger liquidity and management’s expectation of modest FY27 revenue growth.

2. Zip Co (ASX:ZIP): +18.2%

Zip comfortably surpassed its FY26 targets, sending the buy-now-pay-later provider’s shares sharply higher. Transaction volume rose 23% to $16.7 billion, while cash earnings before tax, depreciation and amortisation jumped 58% to a record $268.9 million. Statutory profit climbed 46% to $116.4 million, and the cash operating margin expanded by 4.2 percentage points to 20%.

The strongest signal was guidance for FY27 cash earnings of $340 million—around 26% growth and above analysts’ forecasts. US transaction volume increased 42.5% and now represents three-quarters of group volume, offsetting weaker customer activity in Australia.

3. CSL (ASX:CSL): +17.3%

CSL’s result was hardly spectacular in isolation, but it cleared a market bar that had fallen dramatically following earlier downgrades and restructuring announcements. Underlying NPATA was US$3.1 billion, down 2% in constant-currency terms, while operating cash flow reached US$3.51 billion.

CSL maintained its full-year dividend at US$2.92 per share and completed a A$1 billion buyback. The real catalyst was FY27 guidance for approximately 5% underlying profit growth, compared with market expectations closer to 2%. After an extended period of earnings disappointments, investors interpreted the outlook as evidence that CSL’s core plasma business was approaching a sustainable recovery.

4. Judo Capital (ASX:JDO): +16.9%

Judo Capital demonstrated strong operating leverage as its specialist business-lending franchise expanded. Full-year profit before tax rose 34% to $168.1 million, while pre-provision profit increased 42%. Gross loans and advances grew 18% to $14.7 billion, reaching the top of the bank’s guidance range and comfortably exceeding broader system growth.

Deposits increased 24% to $12.2 billion, return on equity improved by 1.1 percentage points to 6.4%, and earnings per share rose 29% to 9.9 cents. Reaffirmation of the FY27 outlook gave investors confidence that loan growth could continue without sacrificing margins or credit quality.

5. Super Retail Group (ASX:SUL): +15.8%

The owner of Supercheap Auto, rebel, BCF and Macpac reported record sales of $4.2 billion, up 3.2%, despite cautious discretionary spending. Profitability went backwards: normalised profit before tax fell 7% to $306 million and normalised NPAT declined 2.8% to $226 million as transformation spending weighed on margins. Nevertheless, the result exceeded subdued expectations, online sales grew 5.3% and membership across the group’s loyalty programs reached 13.1 million. Investors were also encouraged by positive early FY27 trading, stable gross margins and continued market-share gains. A fully franked 33-cent final dividend added to the appeal.

The five losers

1. Hansen Technologies (ASX:HSN): –21.2%

Hansen’s historic result met expectations, but investors recoiled from its outlook. The utility and communications software provider achieved an underlying EBITDA margin of 31%, exceeding its 30% target, while generating strong cash flow. However, management designated FY27 an “investment and transition year”, signalling a roughly five-percentage-point margin contraction as spending on products, sales capabilities and organisational changes increased.

Revenue had already been broadly flat, leaving investors concerned that the investment program would depress earnings before new growth appeared. Leadership changes, including the chief executive’s departure, added uncertainty. Management expects revenue growth and margins above 30% to return in FY28, but the market was unwilling to wait.

2. Life360 (ASX:360): –19.4%

Life360’s headline growth was impressive: quarterly revenue rose 38% to US$159 million, subscription revenue increased 31%, and adjusted EBITDA climbed 53% to US$31.1 million. Monthly active users reached 102.4 million and paying circles grew 27% to 3.2 million. The sell-off reflected expectations rather than a collapsing business.

Net income fell 18%, the net margin contracted from 6% to 3%, hardware shipments dropped 18%, and full-year EBITDA guidance was merely maintained. After a strong valuation run, investors wanted a larger upgrade and clearer evidence that heavy investment in advertising, international expansion and artificial intelligence would generate additional earnings.

3. PEXA Group (ASX:PXA): –17.0%

PEXA reported a 7% increase in continuing-operations revenue and 12% EBITDA growth to $152 million, accompanied by a two-percentage-point margin expansion. Free cash flow increased 39%, suggesting the core Australian electronic-conveyancing platform remained highly profitable. Investors instead concentrated on management’s warning that property-transfer volumes could decline, alongside regulatory uncertainty surrounding the fees PEXA can charge.

The company is also continuing to invest heavily in its loss-making international expansion. Morningstar considered the market reaction excessive, arguing that structural transfer-volume assumptions had not materially changed, but the combination of softer near-term activity and regulatory risk overwhelmed the respectable headline numbers.

4. SEEK (ASX:SEK): –14.3%

SEEK produced solid FY26 figures, including 10% revenue growth to $1.20 billion, a 15% rise in EBITDA and 28% growth in adjusted earnings per share. It also lifted its fully franked annual dividend by 13% to a record 52 cents. Those achievements were overshadowed by falling paid job-ad volumes and cautious FY27 assumptions.

The statutory accounts included a $201 million loss from the SEEK Growth Fund and $377 million of significant items, making the headline result considerably less attractive. Investors were particularly concerned that economic weakness could limit volumes while the company continued investing in platform integration and artificial-intelligence products.

5. JB Hi-Fi (ASX:JBH): –12.3%

JB Hi-Fi’s full-year result was broadly respectable, with group sales rising 5% to $11.1 billion and underlying earnings per share increasing 6% to $4.48. The damage came from its current-trading update. Australian sales were almost flat during the June quarter and deteriorated further in July, while earnings in the core Australian electronics business fell 3.6%.

Housing-related categories were particularly weak as higher living costs and interest rates constrained household budgets. With JB Hi-Fi entering the season on a demanding valuation, an in-line historic result was not sufficient: the loss of sales momentum prompted investors to rapidly reduce their expectations for FY27.

Overall, the season showed that share prices react less to whether profits rose or fell than to the gap between results and expectations. Bapcor was rewarded for being less troubled than feared, while several fundamentally profitable companies were punished because their outlooks failed to justify elevated valuations.