Conspicuous Consumption’s Last Gasp?

May 14, 09 Conspicuous Consumption’s Last Gasp?
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For the last few years, our economy was so awash in cheap credit that conspicuous consumption became the norm.  Many economists and social critics were predicting the end of conspicuous consumption because of the new socioeconomic realities brought on by the current recession.  Certainly, the evaporation of over $7 trillion dollars of wealth could not have helped many of the world’s richest persons’ bottom lines.  The wealthiest one thousand individuals in Britain lost over $400 billion dollars since 2008.  Overall, this year’s Forbes List was short over 300 people from last year and their combined wealth shrank by $2.4 trillion dollars.  Granted, that is still plenty of paper to play with, but losing 30-40% of your total net worth cannot be easy for anyone.

Everyone from the super-wealthy to moderately rich rappers to the upper class are professing a newfound desire to lead lives trimmed of excess and conspicuous consumption.  We are told that the recession has shaken everyone to their core and forced not only the middle class, but also the wealthy to re-evaluate their lifestyles.  Okay… so why do the makers of the Lamborghini Reventon believe that there is market for their new $1.6 million dollar car?  Brioni introduced a new line of men’s suits that retail for as much as $43,000.  The spokesperson for Brioni claims that they have already sold 30 suits.

Inevitably, with luxury brands continuing to create more exclusive and more expensive items, stratification will occur among the ranks of the super-wealthy and upper classes.  Those seeking to reassure others that somehow they have not been harmed by the recession will seek these items as means of “keeping up with and outdoing the Joneses.”  This mentality can be pervasive:

The need for people to prove their value by purchasing over-priced luxury goods will not die an easy death.  No matter how bad things get, people will always look for something to aspire to; and the wealthy will always need new toys to flaunt.  Luxury brand marketers do not expect a drop in the sales of aspirational brands, or brands that are well known by an audience unable to afford them.  Ultimately, it will be hard to judge the recession’s long-term effects on consumer spending habits.  However, if the credit begins to flow easily again, I am not sure that we will not slip back into our old habits like a comfy pair of Gucci loafers.

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