My my my. Where is Thorstein Veblen when you need him? An article on CNN asks in a Shakespearian manner whether luxury brands should cut their prices in order to boost sales. Nordstrom CEO David Spatz believes “the days of conspicuous consumption are over.”
Veblen developed the idea of conspicuous consumption in The Theory of the Leisure Class. He argued that people consume in order to display their wealth because it’s a way of distinguishing the upper from the lower class. People want to belong to the upper class because they have not just wealth but power.
But is conspicuous consumption truly extinct? The same CNN article suggests that high end brand companies will not necessarily have to lower their prices, but they certainly will have to “get creative” and “invest instead in product development and the customer experience.”
This recession has certainly been a wake up call for everyone. As institutions evolve, so will the business principles. In order to “survive”, high-end luxury brands that want to keep themselves as such will have to “adapt” to the new environment in which they find themselves; those that can “adapt” will “survive” and consumers who want to demonstrate their wealth will buy their luxury brands from the “survivors.” Those who cannot “adapt” and lower their prices will find that their products are just normal goods.