And in the words of the great DJ Khaled: 'Congratulations, you played yourself'.
Background: Hermés is the luxury goods company that was founded around 185 years ago. It's famous for its Birkin bag (i.e. the bag Drake's been stashing for years to give to his 'future wife').
What happened: There is intense demand for this bag. Mainly because Hermés actually caps production on them. And usually, this just adds to Hermés' exclusivity and allure.
What else: The company's results for the last 3 months show sales were down around 5.4% for the period due to capacity constraints. And this news sent shares down 5% - their lowest since 2016.
💡 Exclusivity can often be used as a great marketing tool, particularly when it comes to luxury brands.
💡It can lead to urgency (i.e. not enough supply to fill demand), which drives that familiar FOMO feeling. And, when we finally get our hands on the product...we feel special 🤗.
💡 But the downside? It reduces the quantity of bags produced (and subsequently, the amount of revenue). So now, the company is facing tension between exclusivity and revenue.
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