Hello Conspicuous Consumers,
This is one of my favorite topics of all time!! When I was a Freshmen in college at Indiana University, I took a fashion merchandising class. I was fully prepared to take my passion for fashion to the next level and pursue a degree in it. This class supported that assumption. For an entire week, I remember studying the concept of conspicuous consumption. I became utterly fascinated with the notion of consumer behavior and why we choose to make certain purchase decisions solely on perceived socioeconomic status. It was enough to get me hooked. This one week this one subject was enough to where if I hadn’t transferred to Ball State my Sophomore year, I would have immersed myself in the fashion merchandising degree. I’m still thinking of getting my Master’s Degree in Consumer Behavior, that’s how much I love this stuff!
If you are unaware of the phrase, conspicuous consumption is the consumption of luxuries on a lavish scale in an attempt to enhance one’s prestige. In layman’s terms, it means that you pursue buying things that are at a higher price point because you want people to think you have money. The term was first used by economist and sociologist Thorstein Veblen in the 19th century as a way of describing families who showed off their great wealth publicly to manifest their social power whether it was real or living beyond their means.
So why is it important? Well, our society is inherently obsessed with social class. The items we buy on a daily basis puts us into buckets in other people’s eyes. If someone is waking around with a Dunkin Donuts cup of coffee, carries an Android phone and wears a label-less purse from Target, our society would put that person in the bucket of people who fall lower on the socioeconomic scale. If they saw another person walking around with a Starbucks cup, carrying their Apple products and toting a Louis Vuitton Neverfull, then that person has money.
We are all guilty of conspicuous consumption. To be completely honest, when I bought my Louis bag back in February, I had to take a step back and ask why. Why this bag, why this price point, is that reasonable? The answer was I wanted to be able to buy something that showed for how hard I had been working but the answer was also no, spending that much money on a handbag probably wasn’t reasonable. Just with the faint monogrammed LV plastered all over the canvas though, I could let passerby’s know that I worked hard enough to afford a bag of that stature. Same goes for the people who jumped at the opportunity to buy the new iPhone 11 as soon as it debuted. Did they really need that new phone? Likely no, but being at the forefront of those snagging the new luxury good allowed those consumers to “show off” their status as trend-starters and as someone who has the means to drop that kind of cash in a New York minute.
Makes sense? Sure, but I’m sure you’re asking well why should I even care, is it good or are these people just pretentious a-holes? Actually, conspicuous consumption is kind of a good thing because it stimulates economic growth. Since people are spending money on more luxurious goods, they are putting money back into the economy and thus back into businesses. The demand increases and the businesses need to hire more people. More people have jobs and ultimately have more money to spend back to the economy. It’s a cyclical infinity symbol of money both coming and going and that’s always a good thing for our economy.
My tip though is to always spend within your means. If you have the discretionary income that you’ve been saving to purchase a luxury good you’ve always wanted, that’s one thing. That’s exactly what I did. Beware though of the fad fashion items. The items that are all the rage and that everyone seems to be buying all at one time. They come into popularity just as fast as they fade into oblivion, becoming irrelevant and a waste of your hard-earned money. These are great items to buy on a dime. If you are purchasing a luxury item, go for something classic and timeless, something that will always be in style no matter what the year may be. That’s money well spent.