VANEK SMITH: Hey, Sindhu.
SINDHU GNANASAMBANDAN, HOST:
SMITH: So we're here finally.
I'm on the Upper East Side of Manhattan with Sindhu, our intern here at PLANET MONEY, and I'm about to set off on a kind of quest.
GNANASAMBANDAN: We're here. How do you feel?
SMITH: I feel like I'm going to throw up actually.
GNANASAMBANDAN: (Laughter) OK, well, don't throw up in the store, Stacey. I feel like that's bad tactic.
SMITH: Like all epic heroes, I have a plan.
I've been going over what I'm going to say. I think I'm ready.
GNANASAMBANDAN: What are you going to say?
SMITH: OK, I'm going to say - hey, do you have any Birkin bags?
The Birkin bag - it's a purse made by Hermes, the French luxury brand, and Birkins average around $60,000. You can get a starter Birkin for around 10,000. There are luxury goods and then there is the Birkin bag. For 30 years, the Birkin has been the it bag for rich and powerful women. Elizabeth Taylor carried one. Kate Middleton, Kim Kardashian has one. Victoria Beckham apparently has, like, 100 of them.
This is the bag that proves you've made it, that you are on the top. There are people with Birkin bags and there are the rest of us. And apparently, even just getting to see one is kind of a big deal. They won't just show them to anyone. And this is why I'm so nervous. I am about to walk into an Hermes store, walk up to a salesperson and ask to see a Birkin bag, which is, like, my own personal nightmare. I find those stores really intimidating.
GNANASAMBANDAN: OK, you got this. Good luck.
SMITH: Thanks, man. I'll see you soon.
GNANASAMBANDAN: Bye. Oh, my God, I feel so bad for her.
Fourteen minutes later, Stacey finally emerged from the store.
Or - there she is. She's walking really fast.
GNANASAMBANDAN: Hey, you're back. How'd it go?
SMITH: Hi, Sindhu. OK.
GNANASAMBANDAN: (Laughter) Breathe. It's OK.
SMITH: It's OK. It's over. Yeah, so they didn't have any Birkins.
GNANASAMBANDAN: Surprise, surprise.
SMITH: This is the strange thing about Birkin bags. They always seem to be mysteriously out of stock. And this is no accident.
(SOUNDBITE OF SONG)
UNIDENTIFIED SINGER: (Singing) Give it to me.
SMITH: Hello, and welcome to PLANET MONEY. I'm Stacey Vanek Smith.
GNANASAMBANDAN: And I'm Sindhu Gnanasambandan. Today on the show, the elaborate strategy that has kept the Birkin bag the large luxury it bag for decades.
SMITH: We go on a quest to see one of these bags and find ourselves in a world where the normal rules of commerce are totally upside down. Also, how you get someone to pay $60,000 for something that is, let's be honest, just a purse.
(SOUNDBITE OF SONG)
UNIDENTIFIED SINGER: (Singing) Give it to me.
UNIDENTIFIED WOMAN: Support for this podcast and the following message come from Credit Karma.
A credit score can impact important things in life, from car and student loans to mortgage and interest payments. Credit Karma gives you completely free credit reports and scores with no hidden costs or obligations. More than 45 million Americans have used Credit Karma to check their scores. Get your free credit report today by visiting creditkarma.com/npr.
UNIDENTIFIED SINGER: (Singing) Give it to me.
SMITH: Wednesday Martin - Wednesday's her first name - can remember the exact moment she started wanting a Birkin bag.
SMITH: It was right after she moved to the Upper East Side - it's one of the wealthiest neighborhoods in New York - and she was walking down the sidewalk, and she saw this very well-dressed woman walking towards her.
WEDNESDAY MARTIN: And we were the only people on the sidewalk, and as she walked toward me, rather than keeping to the right, she was slowly but surely walking, sort of, at me so that I had to move further and further to the right. And I was ceding more and more sidewalk territory to her until, finally, I found myself stopping right up against this garbage can that she had sort of walked me into, then she brushed right by me with her handbag. That was a dominance display, and that woman used her handbag to do it.
GNANASAMBANDAN: She's pretty sure it was a Birkin bag. They're a very simple, boxy handbag, kind of on the larger side, and they have a padlock on the clasp.
SMITH: And when this happened, Wednesday did not think - oh, my gosh, women in this neighborhood are crazy. I need to move. She thought - I need one of those bags.
MARTIN: That was the moment when I realized that handbags are really important in New York. And if I want to play ball on the Upper East Side, I better stop walking around with this white plastic bag with a couple of bananas in it. I better saddle up.
SMITH: Back in 1981, the CEO of Hermes was on a plane with the French actress Jane Birkin, and Jane complained she needed a weekend bag.
GNANASAMBANDAN: The Birkin bag was born.
SMITH: Wanting to buy a Birkin bag, that's the easy part. Even having the money isn't the really hard part. Finding one to buy? That is tricky, even for professionals. Michael Tonello ran into this. He had a business buying and selling luxury goods. And one day, one of his customers came in and said - hey, can you get me one of those Birkin bags?
MICHAEL TONELLO: I started asking for Birkin bags, but they quickly told me that they didn't have them. And I couldn't figure out why it was that Hermes didn't have any Birkin bags if it was, you know, a bag that Hermes made and sold.
SMITH: Michael started talking to other people who were trying to buy Birkins, and they were all being told the same thing. We are sold out. But we can put you on a waiting list.
TONELLO: Anywhere from two years to four years waiting list - at one point, they were saying that there was a waiting list to get on the waiting list. And it just all seemed kind of crazy to me.
GNANASAMBANDAN: If you got a bag that people are willing to pay tens of thousands of dollars for, why won't you sell it to them?
SMITH: Hermes has an explanation. It says these bags take a really long time to make. They just can't keep up with demand. First of all, some of them are made out of these very exotic leathers, like a crocodile and ostrich. And Birkin bags are hand sewn by select artisans in the south of France. Hermes says that is why they are always sold out.
I ran this by Josh Weltman. He's worked in advertising for years. He was one of the producers of the show "Mad Men." They're, like, listen - these are totally handmade.
JOSH WELTMAN: Yeah.
SMITH: It takes 12 hours to make one. People have to apprentice for years in order to get to the level where they can make a Birkin bag. Like, this product is special.
WELTMAN: I'm sorry. It's not.
GNANASAMBANDAN: Josh says that if Hermes wanted to make more bags, they totally could. They've had 30 years to train those select artisans. He says the reason for the extreme scarcity of the Birkin bag has nothing to do with how it's made. It's part of the marketing.
SMITH: Josh says the whole idea of a luxury goods is something that not everyone has. And there are a couple of ways you can make sure that not everyone has your product. You can jack up the price. A lot of companies do this - fancy watch companies, luxury car companies - of course, the Birkin bag.
But Hermes has gone a step further. They don't just charge a lot for the Birkin bag. They make sure that not everyone can get one. They have made Birkin bags really hard to buy. And you have to go through all these weird rituals to get your hands on one.
GNANASAMBANDAN: But Wednesday Martin, our Upper East Sider, was determined to join the Birkin club. So she consulted an expert.
MARTIN: I conducted myself according to tribal code. And I went to a wise tribal elder, although she didn't look like an elder. She looked very young for her age.
SMITH: It was her friend's mom who owned a Birkin. Actually, she owned several Birkins. And her friend's mom called the salesperson she knew at Hermes and, quote, "effected an introduction."
She told Wednesday to send her husband to the Hermes store to introduce himself to the salesperson. Apparently, Wednesday would have a better shot at a Birkin if her husband said he wanted to buy it for her as a gift.
MARTIN: He had to show up in person and meet this lovely saleswoman who said, I hope you'll understand there - we'll have to wait.
GNANASAMBANDAN: Even Wednesday - from the right neighborhood, with the right connections, doing everything right - even she couldn't get a bag.
SMITH: And this goes beyond scarcity. Where most stores try to make you feel welcome, try to make you feel special, Hermes's strategy seems to be to reject and humiliate. Josh Weltman, the advertiser, says that is intentional.
WELTMAN: They play hard to get. That's how they seduce you.
SMITH: It almost sounds like they're kind of, like, humiliating...
WELTMAN: They haze you. It's a hazing process.
SMITH: Hazing doesn't, like, create resentment?
WELTMAN: No, it creates a bond once you're in. It makes you feel that you're worthy. It gives you identity.
SMITH: I mean, think about this. Hermes has created a $60,000 purse, and instead of convincing you why on earth you should pay that crazy amount for a Birkin bag, Hermes has people trying to convince them to let them buy one. Like, please let me spend $60,000 at your store.
GNANASAMBANDAN: And this may just sound like this insane marketing tactic used on insane people who have way too much money, but Josh says that you can actually find this tactic everywhere.
SMITH: The basic example is night clubs, like when they have that big line out front. And Josh says elite colleges do the same thing.
WELTMAN: The thing that they published about Harvard and Stanford and all the Ivy Leagues is the ratio of how many people they let in compared to the amount of people that they reject. It's not a high status school unless it's super selective.
GNANASAMBANDAN: Everyone wants to be a part of a club that's just out of reach.
WELTMAN: That's the soft part (laughter) that we're poking at in advertising, you know.
SMITH: It feels a little sinister that they're, like, marketing right to our soft spot. It's like we're helpless.
WELTMAN: Well, they didn't put the soft spot there, you know. You're the one that has the itch, you know.
WELTMAN: They're just letting you scratch it, right? I mean, that's a service.
SMITH: Wow. You're good at your job.
SMITH: There is, of course, a very obvious cost to this strategy of turning people away, to poking at that soft spot. For Hermes, it means that every time someone walks into a store and asks to buy a Birkin bag and they say no, that is a $60,000 sale they are not making.
WELTMAN: They don't get greedy. I guess that's what I'm - (laughter) sort of a weird thing to say about a company that's charging $70,000 for a bag.
SMITH: And not getting greedy pays off. Josh says the reason that the Birkin has been on the top of the handbag food chain for 30 years is exactly because it's so hard to get. It keeps people wanting one. Of course, to make money, Hermes does eventually have to sell a bag to someone.
GNANASAMBANDAN: Wednesday Martin did actually finally get one in this totally random way. Her husband was on this business trip in Japan, and he saw an Hermes store, so he went and asked - do you have a Birkin bag? They said no, sorry, we're out. He said I need one. They said no, we're out. And he said no - I need one.
MARTIN: And Japan is an extremely polite (laughter) culture. I think that after they told him a few times that they couldn't do that and he insisted a few times that, in fact, they could and he wanted them to, they must've just thought - this man is so rude (laughter). And this is so awkward. The best way to get him out of here might be to just let him buy one of these. So (laughter) they produced a bag.
SMITH: And remember our luxury buyer, Michael Tonello? He also ended up getting a Birkin bag in a totally different way. He was in an Hermes store buying a bunch of scarves for a customer.
TONELLO: And I piled up about 10 or 15 Hermes scarves, and as we were walking to the register to pay, just sort of nonchalantly, like, I mean, literally, it was an afterthought, I said to the salesperson - oh, you know, do you happen to have a Birkin bag? And the salesperson said oh, I don't know. Let me look in the back.
SMITH: What did you think?
TONELLO: I thought, she's going to go in the back room and come out tell me they don't have any Birkin bags.
SMITH: Instead, she came out with a big orange box - a Birkin bag. And she let him buy it for $20,000.
GNANASAMBANDAN: So then Michael goes across town to another Hermes store and tries the same thing. It totally works.
SMITH: Michael had accidentally cracked the code -buying a bunch of really expensive stuff at the Hermes store first then casually ask for a bag, and you'll get one.
TONELLO: I suddenly realized that it was a lot like chemistry class. The order in which you put the chemicals into the beaker are very, very important.
SMITH: Somehow, Michael had turned the Hermes shopping experience back into a normal commerce situation.
I have a pet theory about this. I think that after he bought all those thousands of dollars' worth of scarves, the salespeople at Hermes felt grateful to him. They felt like they owed him, and they wanted to be nice to him, like in a normal store. And that is the moment when Michael asked for the Birkin bag. He caught them at a weak moment.
GNANASAMBANDAN: But Stacey and I, we still hadn't seen a Birkin though. So when we met Wednesday, we asked if we could see hers.
SMITH: Do you mind it - can we see your bag?
So I've actually never seen one. I mean, I'm sure I've seen them around, but...
And this felt kind of momentous. That is the genius of Hermes. Even just seeing a Birkin bag feels like a big deal.
It's very, like, clean lines, very simple, very under - very plain, really.
MARTIN: It's very plain and simple and understated.
SMITH: I mean, if I just saw this on the street, and I didn't know what a special bag it was, I wouldn't, like, look at it twice.
MARTIN: You might just say - who cares? That's not such a great looking bag.
SMITH: OK, so here's the truth. That bag is so underwhelming. It is, like, aggressively underwhelming. It's ugly and boxy, and the leather doesn't even seem that nice. But as I was looking at it, I caught myself trying to see how special it was. I kept thinking, people pay $60,000 for this bag. This is a special bag. If I can't see that, I have the problem.
Can I touch it?
MARTIN: Yeah, touch it.
SMITH: I feel like it's almost like a religious - I feel like - I don't - there really is some weird aura about it.
This is really embarrassing to listen to right now - religious relic, aura - that's - (laughter) what happened to me? I was reporting a story about bags. But it's hard not to get sucked in, even when you know all the mechanisms behind what's going on. And Wednesday Martin said she knew how I felt.
Did you ever feel, like, a little suckered by Hermes, going through all of this?
MARTIN: Are you kidding? Of course, only every single second that I was doing it. I thought, I have lost it. I felt ridiculous about it all the time, and I still do (laughter). I still hope to come out of this interview sounding like a person with a sense of humor rather than a zombie. But in a sense, I did become a zombie.
SMITH: Still, Wednesday says, having a Birkin bag really did help her feel more at home on the Upper East Side. She never got pushed off a sidewalk again. People who didn't have Birkins approached her to ask her how she'd gotten it, to ask if they could hold it. People who did have Birkins wanted to exchange war stories. She said the bag helped her feel like she had a place in this new neighborhood.
For Sindhu and I, our quest was done. We had seen a real-life Birkin bag. We had touched it, and we decided to celebrate, we would retreat to our own world of luxury.
In this part of town, we can probably only afford a coffee. Do you, like, want to go get a coffee?
GNANASAMBANDAN: Let's get some $6 coffee.
GNANASAMBANDAN: It really does taste better.
SMITH: We always love to hear what you think of the show. Shoot us an email - firstname.lastname@example.org, or you can tweet us - @planetmoney. You can tell us what your own personal Birkin quest was for.
Also, if you are hunting for a new podcast to try out this holiday season, check out npr.org/podcasts. They have a whole bunch of podcasts on pretty much any topic you can imagine. It's the perfect way to escape your family for the holidays. Find your new favorite podcast at npr.org/podcasts or on the NPR One app.
GNANASAMBANDAN: We'd like to thank Thomai Serdari, Yuriy Turetskiy and Dana Thomas for helping us on today's show. Thank you, guys.
SMITH: Today's show was produced by the incredibly patient Alex Goldmark. And Sindhu, we are also saying goodbye to you this show.
GNANASAMBANDAN: I am so sad.
SMITH: I know. You're going back to the excellent University of Chicago to finish your degree. It's a worthy cause, but we're going to miss you.
GNANASAMBANDAN: Aha, I heard that's important. I'll miss you guys, too.
SMITH: (Laughter). I'm Stacey Vanek Smith.
GNANASAMBANDAN: And I'm Sindhu Gnanasambandan. Can I say my name again? And I'm - and I'm Sindhu Gnanasambandan. Thanks for listening.
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