12.27.05
Luxury Shifts Toward Enjoyment
One of my favorite publications, the economist, has a new article about luxury mass market and the consumption of the super-rich.
Products and services that were once the preserve of a very wealthy few—from designer handbags to fast cars, bespoke tailoring and domestic servants—are increasingly becoming accessible, if not to everyone, then certainly to millions of people around the world.
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As Thorstein Veblen noted over a century ago in “The Theory of the Leisure Class”—the book in which he coined the phrase “conspicuous consumption”—spending lavishly on expensive but essentially wasteful goods and services is “evidence of wealth” and the “failure to consume in due quantity and quality becomes a mark of inferiority and demerit.” But in the 21st century, “being a conspicuous consumer is getting harder and harder”, says James Lawson of Ledbury Research, a firm that advises luxury businesses on market trends. What does a billionaire have to do to get noticed nowadays?
Global economic and population growth has created many more wealthy people, some of whom seek to exhibit their wealth with material possessions.
Being a millionaire, for instance, is becoming commonplace. In 2004 there were 8.3m households worldwide with assets of at least $1m, up by 7% on a year earlier, according to the latest annual survey by Merrill Lynch and Capgemini. The newly wealthy are often desperate to affirm their status by conspicuously consuming the favoured brands of the already rich. In developed countries this can be seen, in its extreme form, in the rise of “Bling”—jewellery, diamonds and other luxuries sported initially by rappers—and Britain’s unsophisticated Burberry-loving “chavs”.
This new class of wealth and the attitudes in the developed world are contributing to an increase in truely deluxe luxury travel around the world.
As it gets ever harder to consume conspicuously, are some traditional luxury consumers giving up trying? According to Virginia Postrel, author of “The Substance of Style”, conspicuous consumption is much more important when people are not far from being poor, as in today’s emerging economies. In developed countries, in particular, “status is always there, but the shift in the balance is towards enjoyment”. For instance, the first thing the newly super-rich tend to buy is a private plane. But that, she says, is “not so much about distinguishing themselves from the masses as not being stuck with them in a security line”.
