How Luxury Brands Brainwash You to Buy

This is Louis Vuitton, the most valuable luxury brand in the world. Each year it sells over $15 billion worth of products and leads the luxury fashion market with the highest profits than any of its competitors. But what you don't see is how these billion dollar brands target the poor and not the rich and get inside their head using neuroscience and marketing to control the minds of the masses. And today I'm in Beverly Hills to shop the top five luxury fashion brands in the world and expose exactly how they do it. Are our covert mystery shopping glasses. So we can get footage and expose the tactics that these companies are using firsthand in the store.

This is 10,400. This is 10,800.

And I'm also going to show you how to apply these same tactics to your own business to dramatically increase your profits.

If you don't know me, I'm Sabri Subhi. I'm an investor on Shark tank. I've generated $7.8 billion for my clients. First up is Louis Vuitton.

So before we go into the store, here are some of the tactics that they are known to deploy in store that I'm going to be keeping my eye out for. So these brands, they go through the most extreme measures to manufacture exclusivity. Their limited stock, that is all a fugazi. Do you really think that they don't have the funds to go out there and procure the goods to make enough to sell to the demand? Of course they do. It is by design. They want to keep that stock low so that it increases the urgency for you to act now when they do have the inventory in place and to make it more desirable in the first place.

So my bodyguards and I headed into Louis Vuitton to investigate. I told them to pretend I was a billionaire sheikh from Dubai to see how these luxury brands would treat me inside. Immediately we were met with our first challenge.

This is all women's. Okay, you're very close.

Two blocks we went to the all women's store. So we ventured over to the men's store to try and buy a passport wallet. Immediately we were assigned a personal shopper to show us around the store. I found my wallet on display and what do you know? They said that this specific item had insane demand and that it wasn't available at this store. But I refused to give up. So we drove 40 minutes to another Louis store. Immediately we were greeted with another personal shopper. I told them that I wanted a passport wallet and she immediately brought me to their travel section. Here's where it Gets juicy. She mentioned that the wallet I was after was hard to come by. And while she checked the back of the store, she tried to sell me a thousand dollar pair of sunglasses as well as a $4,000 duffel. They ended up having the wallet, but somehow it was the last one in stock. All right, so we just copped some Louis V. Whatever it is that you choose that you want, they validate that immediately. That's our most popular. We've only got one more of those in stock.

And it's by limiting this supply do things become infinitely more desirable. And why? People laugh about it and they say, oh, that's so extreme. The reason that they do it is because it works. And it's not just these huge, massive luxury fashion brands. And think about some of your favorite brands. Think about Apple, for instance. You can't just go in there and just buy their brand new products whenever you want it. They only have a certain amount of inventory that's sent to each location. And if you try to call up in advance and being like, hey, can I get this certain iPhone? They say, I don't know, we get a certain batch sent to the store every day and we don't even know what they're going to send. And it's the whole manufacturing of that exclusivity is what gets people to just rock up in droves to buy their products. Next up is Dior, the number two luxury fashion brand in the world. These guys do over $11 billion in sales annually. And they had this tote bag, it's $3,500 and it cost $57 to make. And the Internet is going completely wild.

About it cost less than $60 to make a $5,000 bag.

So let's go on in and see what tactics that they're going to use on us.

So we went into Dior and immediately asked to see the $57 tote bag. I couldn't believe that they sold these things for $3,500.

It's an Egyptian cotton.

And even though I don't think it was anything special, I gotta respect it.

Because this is the very first thing that I do when a client wires me 50k. I get on the phone with them and I tell them immediately straight out of the gate, you need to double your prices because you want to be selling at a premium price point. Unless your business model is to be able to service the entire market so nobody can possibly compete with you on price, operating at the lower end of the market is a fool's errand. And you do not want to play the race to the bottom because you never win. All prices are made up. When it comes to setting the price for your product, the setting matters. So you want to think about how do you actually present that product if it's a physical product, what is the location that you've done, the product photography, what is it next to? What are the models like? What's the lighting, what's the aesthetic, what's the whole makeup? What very few people understand is price priming. And that is where you prime the prospect based on the association and the area and all the things that they are subjected to before you actually make your offer to them.

Next up is Gucci.

Everybody knows Gucci. It's the loudest fashion brand that there is. You got the Gucci belt, the loafers, the jumpsuits. So your boy is about to go on him and get dripped out in that Gucci stuff. Let's see the tactics that these guys deploy.

We enter Gucci, and the first thing that I notice is the man at the door whose entire job is to. To let you through their velvet rope. I let them know that I wanted to get as drippy as possible. So they took me to the back of the store to all of the clothes. They offered me nothing but the finest sparkling water. And then I asked to try on one of their tracksuits. They left me waiting for around 10 minutes. My guess is that this was a tactic to get me to browse some more. I looked at some of the shoes, the Gucci belts, and then they called me to the changing room to try on the Gucci tracksuit. And let me tell you, this thing was ridiculous. And the entire set cost somewhere around $5,000. You are definitely buying the brand and.

Status with this one. We seek social status from the schools that we go to, to the places that we work, to the type of clothes that we wear. Everybody wants to signal a certain status, and we all want to be perceived as being higher status than the people that we associate with. A lot of businesses just sit down. They think about all the features and the benefits of whatever it is that they've got to sell, but they don't. Buying their product represents from a status standpoint and what it signals or what type of status does it unlock if someone buys for you. And if you think about these luxury brands, you are not buying the material, you're not buying the cotton, you're not buying all of those specific things. Yes, they harp on about craftsmanship and quality, but that is how they justify the Sale. That is not how they get you to buy in the first place. It is an emotional sale. They are selling you the status of having the big Gucci logo on your tracksuit because they know all the rappers and celebrities, influencers, that it is what they're wearing and you want to be like them. And therefore this is like a cheat code. If you buy this, you are going to be like them.

Before we dive into what might be the craziest manipulation tactic I've seen from any retailer, at Rolex, I decided to play a little prank on the people over at Balenciaga. These guys are known for their out of pocket designs like their $1800 LE chips bag and $4000 tape bracelet. So I asked to try on their biggest oversized hoodie and Kanye's favorite, the oversized croc boots. Bro, I almost lost it when you.

Made them bring out those fuzzy croc boots.

Their products are so wild that there has to be some other reason as to why they're able to sell over $1.4 billion a year. They're masters of trolling the Internet and consumers. By using something called neuromarketing.

And neuromarketing is scientists study how our brains interact with certain ideas, objects and ads. These big brands, they spend millions of dollars per year in this study and they use crazy technology like FMRI to study the blood flow in people's brains when they're exposed to certain products and ads. They also have all of these fake shops and supermarkets set up where they use eye tracking software to have a look at what happens to people's heart rates when they see certain products, when they see certain ads and they interact with different stor. Now, I'm not saying that you need to go through these crazy lengths and use all this insane technology. But what I will say is the very first thing that I do when I sit down and I write an ad or a VSL or craft an email is I think, what is the emotion that I'm trying to elicit. I don't think about how do I write this subject line or what's the hook going to be. You first need to start from the place of, like, how you trying to make the prospect feel. Because all the masterful copy, all you putting the features and benefits, people don't remember that, but they will remember how you make them feel. All right, here we are at the front of Chanel. It is the fourth ranked luxury brand in the world. Let's go on in and see what it's all about.

Inside of Chanel, I asked to see their most popular item, the classic Chanel bag. And of course, they tried to use the exclusivity of these bags against me.

Caviar, gold, hardware. This is 10,400. This is 10,800.

Claiming that it was a limit of one per customer. When I asked to purchase three of them for my daughters a few minutes later. And they let me know that miraculously, that they happened to find three of these exact bags that I was looking for in stock. And they told me that I would actually be able to buy all three of them because I had me and my two bodyguards. But one thing that I noticed about Chanel that stands out from all the other luxury brands is just how heavy they lean into their feminine and timeless style. Everything they do, from the way the hostess greets you, the lighting in the store, the products themselves, all radiate the same energy.

They want to link an association with an idea or a feeling with their brand. And it's the same thing with how Volvo pairs their brand with security and safety, or Nike with determination and Apple with simplicity. It is simply a link between an idea and a concept to their brand. And they keep hammering it in all their communication until that link is formed. And it's the very same reason that these brands spend millions and millions of dollars a year on influences. They're taking a relationship that that influencer already has and they're flipping that relationship to have that association and that brand liking to their brand to make more sales. So you want to zoom out and you want to think ultimately, what is that linking that I am trying to form with my brand? And now Rolex, it is the fifth ranked luxury fashion brand in the world. These guys do over $10.1 billion in SAL. Everybody knows it is almost impossible to get a Rolex. I have been all over the world searching for a timepiece and I cannot.

Find it going in. I'm going to try my hardest to.

Get a watch for wifey.

But the thing is, it's almost impossible to actually buy a Rolex at the store. That is because they actually don't hold anything for sale. I went in with the exact watch that I wanted in mind and they said that it was not available to purchase, but they would take down my phone number and call me when it was in stock.

What female watches do you have in stock today?

I only have exhibition. I don't have anything for sale today.

What about in men's?

Again, I don't have any.

There's no watches at all for sale. Everything is exhibition.

They claim that it's because their watches are in such high demand that they are unable to keep up any inventory in store. But this is just all of fugazi to sell the exclusivity of the brand. They've learned that they are way more profitable by selling the wait list than actual watches. But how are they able to justify such a premium price tag if they won't even sell you in store?

The whole idea of charging premium prices is typically an idea that most business owners can get around. But the thing that they don't like to think about is what type of service would they need to provide in order to justify that premium price tag. Because you can't just go, oh, that sounds great, Sabri. Let me just charge double, triple for what it is that I've got right now. Because a transaction takes place where value exceeds price. And what I have found from having thousands of clients all over the world providing an incredible customer experience is made up by having a lot of little things that you do all throughout that client journey that adds up to the overall experience that it is that they provide. And that's exactly how these luxury brands operate. They know exactly who your name is, what items that it is that you've bought in the past, because that is the only way that you can actually get the products that you want to buy in the first place. They're not in there to sell you one bag or one belt. They want you buying off them repeatedly and forever. And that's how they make these obscenely high profits. So there's the strategies to dramatically increase your profits, like subscribe and I'll see you in the next one.