For Whatever It's Worth; Luxury companies are always finding ways to get consumers to spend more.(Cover story)

Byline: Nick Foulkes

Often when I wander down the world's great shopping streets, I silently curse the concept of shareholder value. It always seems to me to come with an expectation for constant growth, and for this, luxury companies need to find ever more ingenious ways of getting us to spend more.

There are some brands that achieve this almost effortlessly. For instance, the other day I strolled into my local branch of Hermes and examined some of the cute crocodile-skin ring-binder diaries: small things a few inches square with a nice silver pen slotted into the side. I was delighted to see that the more expensive ones were heading north of [pounds sterling]1,500.

The fact that I was only mildly surprised by this price tag testifies to the power of the Hermes image and its reputation for quality and style. Being charged a considerable sum for a small and beautiful object has a value to the customer; it offers reassurance that this is indeed a serious purchase. And to be taken seriously you have to take yourself seriously first. I left Hermes with a renewed respect for crocodile-skin mini-agendas.

Other industries need to work harder to get us to spend more. The luxury-fashion world has attempted to achieve this by creating new seasons. The old days of simple summer and winter seem almost prelapsarian in their innocence. Today the cruise collection, filling an alleged interstice between winter and summer, has been joined by pre-fall; add to that the theme of manufactured rarity demonstrated by the seemingly endless capacity for limited editions, and one wonders how many more reasons can be invented to buy a handbag or a new pair of pants.

The creation of new levels of quality is, to me at least, a more sustainable idea. For those who progress beyond the bulimic thrill of buying more and more to the self-satisfaction of buying better and better, some global brands have added a new level of experience: bespoke service. For instance, Armani has given its male customers Fatto a Mano su Misura--which roughly translates as made-to-measure--suits from about [pounds sterling]5,500 apiece. The combination of a ...