In recent years, greater disparities in incomes and growth in wealthy consumers have fueled new opportunities in luxury markets. As firms launched luxury brands, some have thrived as others stumbled. One important difference between those who succeed and those who struggle, we suggest, is brand authenticity. Scholars have studied authenticity extensively, and research has isolated different sources of authenticity. How firms draw on these sources to create legitimate luxury brands has, however, received surprisingly little attention. In this article, we discuss the research on the sources of brand authenticity, and we explore how brands rely on those sources to craft authentic luxury brands. Using the examples of Canada Goose and Shinola, we illustrate how one firm drew on multiple sources of authenticity and, through the symbolism of its actions, successfully created an authentic luxury brand. We conclude with a discussion of the implications for other firms seeking to enter the luxury market.

The biggest consumer goods companies shell out more than $1 billion a year for R&D but lately have seen no appreciable impact on their sales. That's troubling for companies whose growth has plateaued in recent years. In contrast, some smaller competitors that spend less on R&D - but do so more shrewdly - have seen a significant boost in sales. In this sector, innovators needn't bet big to reap returns.