I have always been fascinated by the thought process behind spending an exorbitant amount of money on luxury goods and services. Of course, I understand purchasing something that is genuinely beautiful, beneficial or makes for a wonderful experience. However, I absolutely do not understand paying a few hundred pounds for a plain shirt that you could buy at any high street store for a fraction of the price. Why is it that we accept this from luxury brands, but revolt when Primark raise their prices by a small amount? What is the psychology behind luxury?
Upon further analysis and study, one explanation could be that many people nowadays crave societal validation, as shown through countless people on Instagram ‘flexing’ their possessions in the hopes of gaining more likes and followers. The rise of influencer culture has given way for anybody with enough followers and aesthetically pleasing surroundings the chance to ‘influence’ the masses. We rarely see behind these perfectly edited pictures in front of beautiful mansions and accompanied by amazing weather. Thus, is it merely a case of idealisation, of wanting what we think we cannot have, of aspiring to what we believe we can never become?
The rest of the world is not exempt from this issue, so perhaps we can gain more of an understanding of this perplexing topic through examining other cultures:
The above diagram is an adaption of Maslow’s Hierarchy of Needs, paying particular attention to the difference between Western and Asian consumers. As we can see, despite the influence of social media across all cultures, Western consumer’s top two priorities are ‘self-actualisation’ and ‘prestige’. Luxury products and services would therefore appeal by allowing them to look good within society as well as offering an exceptional level of quality and comfort. Many places in Asia on the other hand, e.g. China and The Gulf Region, value ‘status’ and ‘admiration’ the most. This explains luxury consumption in these cultures, as doing so will give them a higher level of prestige in front of their peers.
With the influence and power that luxury holds, is this issue bigger than we can fathom? Perhaps the issue is much deeper than societal validation and prestige. Perhaps it is more so about how one feels about oneself. This can be illustrated through the ‘snob effect’, a microeconomics term describing the positive correlation between price and demand which counters the usual relationship between the two factors. As well as heavily valuing exclusivity and wanting to purchase products at incredibly high prices, the demand for said products increases when there is less availability. It, therefore, seems that many people merely want to stand out from the crowd, distinguishing themselves from the masses.
Upon close examination of the situation, it seems that the allure of luxury and the high amount of luxury consumption is not a result of the luxury products and services themselves, but rather the meaning that it can bring to people. Overall, it appears that many want the societal validation either through copying or through being as unique as possible. This does not of course include those who indulge in luxury for the benefits of quality, beauty or enjoying their experience(s). Thus I believe that, much of the time, luxury consumption has more to do with how people view themselves, and how they want others to view them, than anything else.
