She was referring to the quality of the work of the people that worked there while she was there. She said it wasn’t the level she would expect from a luxury business, and she is in the luxury business long enough to know. Of course the financials are great, it is currently the best in percentages if compared to LV. Her “terrible” was regarding work quality.
Hermès Faces Class Action Suit Over Birkin Sales Practices
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I agree with you. It might be for the money for the “serial” class action filer, but I think it is more a question of principle for her and she is done with Hermes anyway, and she might get some money from it that can allow her to buy a few Birkins in the resale market.😆
Much of this discussion has focused on the supply side but another approach to correct what people perceive is a skewed market might be to focus on the demand side. Would customers be happier if the sticker price at the boutique for a MK was, say, $35K and step right up, plunk down your credit card and walk away with a bag? (I made that number up because I haven’t researched the secondary market price for a MK.)
I would argue that the economics suggest that the secondary market price is exactly the real price, as evidenced by reseller sales. Arguably, Hermes should claim all of that revenue for their shareholders rather than allow it to go to resellers. And it’s the price difference that has the disgruntled in such a state; they don’t want to pay the real price that correlates to this level of demand.
At $35K, some customers will conclude for whatever reason that the bag isn’t worth it and demand will be reduced to some sort of equilibrium with supply (never perfect but more in line). Those who view Hermes as a greedy corporation only focused on increasing its revenue might say ‘aha, there it is’ but at equilibrium, anyone who wanted a bag could get one in a reasonable time frame if they’re willing to pay for it.
Still thinking about all of this ….
I would argue that the economics suggest that the secondary market price is exactly the real price, as evidenced by reseller sales. Arguably, Hermes should claim all of that revenue for their shareholders rather than allow it to go to resellers. And it’s the price difference that has the disgruntled in such a state; they don’t want to pay the real price that correlates to this level of demand.
At $35K, some customers will conclude for whatever reason that the bag isn’t worth it and demand will be reduced to some sort of equilibrium with supply (never perfect but more in line). Those who view Hermes as a greedy corporation only focused on increasing its revenue might say ‘aha, there it is’ but at equilibrium, anyone who wanted a bag could get one in a reasonable time frame if they’re willing to pay for it.
Still thinking about all of this ….
Hmm, having just watched the video, I think you’re mischaracterizing what she is saying. She doesn’t say anything about her opinion on alternatives to tying. She is saying that if Hermes is going to be tying up quota bags, it should be more transparent about the practice and consistent with its application. She is troubled by the overall opacity of Hermes’s tying, which is a somewhat different argument.
I think you may have the impression that if people prespend a lot, but Hermes doesn’t offer a quota bag, then it doesn’t count as tying. Tying is based on a company withholding a sale until a customer to buys some other goods. If those conditions are a moving goalpost, then it would still be tying.
Of course, if no one were ever offered a quota bag after being told to spend XYZ amount, there would still be tying. But then there would also be other legal issues, like pressure tactics or just plain fraud.
It would be really interesting if they started a lottery system here in the U.S. That could be super helpful for folks who live in states/areas where there are no Hermes stores. I'm fortunate to have a store just 30 minutes away, but if I lived in a state that didn't have a Hermes store and I could apply for an appointment through a lottery system, I would consider it since I could probably drive there if got chosen for an appointment. It would be really great if they would offer appointments a month or so out because I'd use points to book a plane ticket. lol I would still like the option of shopping at my own store for a possible bag offer, though. You got me thinking! It will be interesting to see how Hermes evolves over time.
I agree with you. Since "clear" or "unclear" there is still tying. Making it more transparent is better for consumers and less chance to have "tying" being misuse by individual's personal gain. I think it will be less stress and better mental health....
I totally understand your friend's preference for the Chinese system, as a business person, her time is more valuable than other things like shopping.....etc. Maybe in her eye buying bags from H are just any other business deals, need to know if the details is good before jumping in.
I think this makes for a good thought exercise, for sure!Much of this discussion has focused on the supply side but another approach to correct what people perceive is a skewed market might be to focus on the demand side. Would customers be happier if the sticker price at the boutique for a MK was, say, $35K and step right up, plunk down your credit card and walk away with a bag? (I made that number up because I haven’t researched the secondary market price for a MK.)
I would argue that the economics suggest that the secondary market price is exactly the real price, as evidenced by reseller sales. Arguably, Hermes should claim all of that revenue for their shareholders rather than allow it to go to resellers. And it’s the price difference that has the disgruntled in such a state; they don’t want to pay the real price that correlates to this level of demand.
At $35K, some customers will conclude for whatever reason that the bag isn’t worth it and demand will be reduced to some sort of equilibrium with supply (never perfect but more in line). Those who view Hermes as a greedy corporation only focused on increasing its revenue might say ‘aha, there it is’ but at equilibrium, anyone who wanted a bag could get one in a reasonable time frame if they’re willing to pay for it.
Still thinking about all of this ….
One reason I've heard elsewhere as to why the company doesn't do this is because it would cause a (likely precipitous) decline in the sale of their other items. I think they want to be perceived as competitive in things like RTW and jewelry as other brands, even though the resale value of BNIB items indicates they're not. So, the hope may be that those who only bought a sweater because it helped them get a Birkin may be converted to buying RTW because they find it's actually good quality and they like the design. Then maybe they'll buy RTW independent of its tie with a bag. Customer acquisition (even for its other departments) is expensive, and if it becomes free due to prespend, that's HUGE. The customer who buys from all metiers with no perception that it links to a bag is "the ideal customer" because it's what provides the most longevity to the brand. I don't fault the company for this, but it points to a small issue:
Most businesses have to innovate and design to keep competitive. Hermes runs the risk of using prespend as a crutch. Hermes acquired a customer for its jewelry but it needs to retain her too. It's very easy for a company to become complacent and tempting as well.
So yeah, I think they don't just triple the price of Bs and Ks is because it serves their overall business, esp for the other departments that could use some boosting. Plus it might allow them to experiment more than they would otherwise: "we're gonna branch out into watches! It's going to be difficult to make inroads but let's give our SAs a high commission on these items and a few extra SO offers for the season to emphasize focus on these new offerings." In essence, bags can provide a nice subsidy and reduce some of the risk. They can't do that if there's a set price on Bs and Ks. I believe this is also the reasoning for why it intentionally limits production, and even if it could wave a wand and have B/K supply meet demand, it would not do so.
I think this is already an issue in shoes and FJ, where design seems stagnant to me.
The big question here is how much of the unmet demand is genuine.
@7:48
"And some sales associates are very explicit as to what you need to buy to get a bag and I know its not supposed to happen that way but tbh i personally like that better bc I would rather the SA be straight up with me than lead me on."
@10:19
"Its not even being straightforward which I know is illegal, but I prefer straightforward than having someone mess with me and lead me on"
Am I mischaracterizing what she means? It sounds like she would prefer a very transparent system, ie tying, ie tit for tat, ie. buy this and get this color bag in this size, ie spend 20k and get a b25 in a neutral color. Am I misunderstanding something?
If anything, I think people are more upset that this practice is illegal and hence why Hermes can't explicitly do this as they do in China as referenced from a previous poster.
It’s so interesting to see this emerge as a view with some support in this thread.
Competition regulators might be shocked!
Boy this is like an episode of Law & Order! 🤣 🤣 
I'm going through Douyin videos to see what people are saying about the Hermes lawsuit. So far the videos I've seen only cover the news about the lawsuit and basic information, or people talking about the "peihuo" ratios. I remember seeing a viral video from China where a man stood outside an Hermes store with a sign complaining that he had bought all this extra stuff but still no bag.
Edit: now I'm hearing people talk about their own experiences with prespend/peihuo. For people who have gone through the Hermes game/journey and come out with a bag, would you have saved more money buying the bag in-store with prespend, or buying the bag secondhand on the resale market (and saved your time and energy)?
Edit: now I'm hearing people talk about their own experiences with prespend/peihuo. For people who have gone through the Hermes game/journey and come out with a bag, would you have saved more money buying the bag in-store with prespend, or buying the bag secondhand on the resale market (and saved your time and energy)?
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You said customers are upset that the company isn’t tying. But in the video, she’s upset that the company isn’t transparent about tying, which is a bit more nuanced.
Actually, Oprah had a dustup with Hermes FSHUnpopular opinion alert. This is all a result of the generation of buyers on a ridiculous "Hermes Journey"
I remember when I started posting (mostly questions to learn about the brand) in the Hermes forum. Coming from the Chanel forum, I had no clue what I was in for. Hermes collectors are sharp and if you don't do your research, many are not kind to newbie questions. It's definitely a "club". Really. It is. And I'm ok with that and that is why I'm STILL HERE. It used to be a much smaller group back then. Now that every "Influencer", "quiet luxury connoisseur" & Jenny from the Block is scrambling to add a Hermeeeeees (or however you pronounce it) Berken/Birking to their TikTok, Hermes' sales are exploding and SA's commissions are too. In case you haven't noticed, many Hermes SAs just got hired after quitting their last job at Abercrombie or Zara. They don't know anything about Hermes leathers, colors, history or the brand (much like those on a Journey). But they do know YOU ARE DYING FOR THAT Berking and they are hungry for your money! They will eat off of the customer's desperation!!! Thus, the spend is now about 3 to 1 in order to "score" a bag. Even the OGs of Hermes have had to increase spending to keep 2 quota bags a year flowing. It's life. It's a business. It's working.
Nothing will change except that the plaintiffs will be banned. *sad face* Once those on a "journey" figure out it leads to nowhere but broke, they will stop... and things will relax a bit.
Hermes can sell to who they want. What's next? Let's sue VCA because they won't sell you a pair of Ghilloche earrings and "the list" is closed? *gasp*
I think I recall seeing an article in the news a decade ago... Tom Ford or something refused to show/sell an exotic bag to Oprah Winfrey. And?
Luxury Store Apologizes To Oprah
For Incident In Which Paris Boutique Did Not Let Her In
www.cbsnews.com
And this was the Tom Ford incident which was based on them refusing to show it to her because it's "too expensive" so what is that SA basing that assumption on? And which potential customers would she happily show the bag to because she thought they could afford it?
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