You wouldn't pay $30 for a can of soup. Or $80 for an undershirt. Yet many of you reading this have paid upward of $300 for jeans. What happened to the Lee Jeans era? In a flash, our price threshold for jeans has increased from $50 to $300. And it's not just jeans that have gone ultra-premium, it's markets as varied as bourbon, workout clothes, and even peanut butter. Could we live in a world seven years from now where "normal" people (including you) would pay $300 for, say, a pair of socks? If so, how would it happen?
Products make the leap from pedestrian to premium when their creators think of them as ideas. Some products are heavy on ideas: perfume, spa treatments, life coaching, alcohol. Others are practically idea-free: mailboxes, fax machines, oil changes. Notice anything about those two sets of goods? You make mega-margins on the first and mini-margins on the second. Margins feed on ideas.
Jeans used to be idea-light. They were workmanlike, durable, casual. But workmanlike doesn't become a $700 million-plus-a-year category within a decade. What ideas does a pair of $300 jeans hold that Lee jeans do not? Let's start with expertise. Paige Adams-Geller founded Paige Premium Denim in 2004. Prior to that, she helped shape the fit for many of the top denim brands, including 7 for All Mankind, which deserves much of the credit for the modern jeans boom. The idea presented to the Paige Premium buyer in a pamphlet on each pair is clear: This person has committed her professional life to finding you the perfect pair of jeans.
As if that weren't enough, meet Jose Auguilar, who works for Paige in Los Angeles. His job is to mess with your jeans. He takes each "finished" pair, and, using a piece of sandpaper, starts scraping away at certain spots on the leg, in order to create the color fade the designers desired. Let's admit that paying extra for this service is a bit like paying $50,000 for a Taurus because Jose Auguilar hit it with a hammer a bunch of times. But without Auguilar, without Adams-Geller, those jeans lose their status as a curated item and become more like Lee. Just jeans.
Part of the underlying reason for consumers being more receptive to this morphing of products into ideas is that our concept of luxury has evolved. Luxury has become more about personal pleasure and self-expression and less about status. In the 1980s, people generally stuck to their social class, says Zain Raj, executive director of the ad agency Euro RSCG, Chicago: "You wore $200 pants with an $80 shirt and a $65 tie. There was a relative order to the world in terms of value. Today, it's all personal." That's why it's not surprising to see people wear $300 jeans with $8 T-shirts. Or to see folks who can barely make rent pay $15 a pound for Costa Rican organic coffee.
Luxury goods are no longer a sign of status; they're the mark of connoisseurship. Go ahead, ask a rich guy about his $3,900 David Yurman watch. "I love watches," he'll say, and he'll probably tell you about the watch's modern Swiss movement, its anti-glare sapphire crystal, and how it's more a work of art than a timepiece. See—he isn't a rich jerk, he's a watch connoisseur! Our world is populated by watch people and wine people and coffee people and jeans people. You are, it seems, what you blow a lot of money on.
But we haven't completely left behind the status era, because connoisseurship only works when you are recognized as a connoisseur. What fun would it be to wear the world's nicest watch or jeans, and have no one recognize it? A connoisseur lives to be recognized by fellow aficionados. Kindred spirits can only recognize each other, though, if the product allows some "signal" that insiders can notice, such as the subtle back-pockets of ultra-premium jeans that can only be decoded by other connoisseurs.
Signaling might be the key for socks to launch into the stratosphere. "I could only see it happening if there was a new fashion craze, if people started wearing knickers or long shorts that showed off socks," says Adams-Geller, who knows a bit about phenomena. See, if socks let you signal your community membership, there could be sock people!
When does an outrageous price for a product become acceptable and even desirable? When the item transforms us from consumers to connoisseurs.
But $300 socks might benefit from one or two additional ideas. V.K. Nagrani, a designer of high-end men's socks that retail for about $35, believes socks are a signal of intimacy. Think about it: In a formal situation, you'll rarely see someone's socks. Then, if they take off their shoes—a sign of comfort or familiarity—you'll see their feet. If they recline, and their trousers creep up the leg, you'll see more. The more comfortable they get, the more sock you see. It's a sock tease. Nagrani designs his socks accordingly, so that, as the trousers creep up, you see more and more detail that was once hidden. You're not buying something to keep your feet warm or dry; you're buying seduction. (Though with men, of course, the seductive effect may be extinguished with the first glimpse of hairy calves.)
In this way, slowly but surely, products become ideas. And it dawns on consumers that your product—be it jeans, socks, or a high-end gas range—is a meaningful symbol of their personal aesthetics, their inner selves. Yes, we all know that no one in their right mind would ever pay $300 for socks. But having a right mind is so yesterday.
The premium-denim market proves that elevating your product to an idea creates a sexy sell.
- The Ideal Rear
Fit model Paige Adams-Geller has the butt that launched a thousand brands—and now her own.
- The All-American
Earnest Sewn's blue and orange threads are meant to evoke "old Gulf Oil racing cars" and the "fading mystique of American ingenuity and craftsmanship."
- The Star Maker
Justin Timberlake's brand (named to honor his grandfather) mixes "city slick and Southern sophistication" in the designs.
- The Mythical Jean
Each basic Odyn style is named for a character from Nordic mythology.
- The Green Jean
Founded by a Dutch anti-poverty NGO, Kuyichi jeans include an online code that lets you see who picked the cotton and sewed your pair.
Read more Made to Stick columns
Chip Heath and Dan Heath are the best-selling authors of Made to Stick: Why Some Ideas Survive and Others Die. If you've successfully converted a product into an idea or have other examples you'd like to share, let us know.
A version of this article appeared in the September 2007 issue of Fast Company magazine.