World saga: Why we're willing to pay more for designer labels

A week after news broke that Kiwi fashion label World was selling T-shirts made in Bangladesh with swing tags saying they were "Made in New Zealand", the Commerce Commission is investigating.

This comes after a series of complaints last week, following a report on the company's use of swing tags saying "Fabriqué en Nouvelle Zélande" on clothing that had actually been manufactured overseas.

World has said the majority of its clothes were made on New Zealand shores, admitting the T-shirts were an anomaly.

But why would anyone pay $99 for a T-shirt which, it turned out, was materially no different from one sold for a fraction of that price?

When we pay a premium for retail items it's because the branding for that item convinces us it contains some intangible benefit, says Dr Sommer Kapitan, a senior marketing lecturer at Auckland University of Technology.

"Before we knew there was a question about that brand we had this quirky, artistic premium New Zealand fashion brand."

A World shirt was not just a shirt for someone who values artistry or quirkiness, but an expression of those values, Kapitan said.

World is owned by Dame Denise L'Estrange Corbet.

And the target market for World and most other designer labels were people willing to pay a premium to stand out.

"I [a designer label fan] might not want to see myself as someone who wears $30 stuff. Whether you can tell or not, I want to know that I wear a $100 T-shirt," Kapitan said.

World's decision to write Made in New Zealand in French on its swing tags was an example of the way brands would use symbolic cues to communicate worth to consumers, Kapitan said.

"That's clearly demonstrating it's a posh brand - you put something in French and it's suddenly sexier."

This messaging was aimed at the aspirational view people hold of themselves - the kind of person they wished and wanted to believe they were.

"So 'I'm the type of person who shops at this fashionable New Zealand made brand' becomes part of the reason for buying there."

As consumers we're also susceptible to believing higher prices meant better quality, even without proof this was the case.

We have learned to associate high cost products with high quality because enough of the time it has been true, Kapitan said.

Many expensive home appliances often worked better and lasted longer than their cheaper counterparts, for example.

This was called "price quality" and was a point of difference in a busy marketplace requiring brands to stand out against one another.

"Especially in fashion, something that costs more should be more value. A $99 T-shirt should be more valuable it should be made of better quality T-shirt."

WHAT SHOPPERS THINK

People spoken to in a street poll conducted by the Herald in downtown Auckland by and large said they did put store in designer labels.

Spark employee Anastasia Kolimasova said designer clothing was something which made her "a little bit extra".

"Knowing something I own is designer makes me feel more special."

Hannah Young, a graphic design student at AUT, said despite not having much money she would be prepared to shell out for designer clothes.

"You've got respect for the brand and branded clothing, people recognise it," she said.

Many people said they were prepared to spend more money on designer labels - as long as they believed the brand had a reputation for quality.

"If I believe it genuinely reflects quality, yes," said retired Aucklander Neil Ingram when asked if he'd spend more on a designer label.