It’s almost 120 years since economist Thorstein Veblen wrote about the leisure class and in doing so gave the world the phrase; conspicuous consumption[1]. Constant online access, mobile devices and the pervasiveness of social media have now established a new normal in the display of wealth.
Euromoniter reported[2] conspicuous consumption of luxury goods was giving way to more meaningful luxury experiences. They went on to coin the truly bizarre phrase ‘Phygital’ to describe the merging of digital and real world consumption experiences.
This is part of the extensive trend ‘Deconstructed Luxury’. It’s effects in the travel industry has been profound, not only the rise of digital champions like Airbnb Trips and UberLUX. But in real world luxury resorts where the emphasis is now on experiences rather than the fixtures and fittings. For instance the launch of the new Mexican boutique resort La Zebra Beach Hotel[3] is all about its pop-up collaboration with Copenhagen’s iconic restaurant NOMA. The owners well aware of the photogenic nature of the dishes. Clearly today’s symbols of status, as Veblen would have it, do indeed need to be Instagramable to exist.
Nowhere is this more true than in Asia, for instance in Vietnam where a fast growing middle class consider symbols of success to be realised on social media, in the form of images of eating out or taking vacations.
Similarly in China after President Xi Jinping’s corruption crack down. Overt displays of wealth have been replaced with an emphasis on a subtler form of expression, especially travel. Plus Mossack Fonesca the company at the center of the Panama Papers scandal was found to have more offices in China than any other country. Clearly the spoils of the China’s growth have been moving off shore rather than exclusively into the boutiques of Guangzhou.
The residents of Hong Kong have often been sighted as some of the most conspicuous consumers in the world, a recent research paper[4] looked at the spending habits of the large numbers of Hong Kong migrants settling in Canada. The authors set out to see whether these people’s previous unique consumer behaviour would be transplanted to a new home. The report makes clear there is no evidence to suggest conspicuous consumption is related to a person’s ethnicity, rather it is a context of environment.
To prove the point Hong Kong’s recent wave of eager shoppers from mainland China’s second tier cities have vexed the locals[5] Their behaviour conspicuous consumption has driven a new trend amongst the residents[6] for under stated luxury.
China Daily recently ‘Valentine’s Day means celebration, not conspicuous consumption’ The paper highlighted the influence of American brands encouraging young affluent Chinese to spend more than 2,000 yuan (£232) on each other in 2016. The paper concluded that a festival established solely on business logic was not a problem of the holiday itself but of the people who celebrated it…
Last year, Ubers Head of Economic Research Jonathan Hall and a group of academics published a report[7] ‘Inconspicuous Conspicuous Consumption’ in which they argued that people were engaging in subtly conspicuous consumption to simultaneously signal wealth and social capital. The report looks in detail including some epic algorithmic equations to prove that subtly branded status goods will be costlier than their loudly branded equivalents. They placed emphasis on the effect your consumption signals on your online standing.
The important lesson for brands is the context of conspicuous display, its now less about proving wealth more the need to display a lifestyle. Social media, while clearly not covered by Thorstein Veblen 1899 writings, does in fact follow his socio-economic analyses of the leisure classes very well.
[1] Noun; Expenditure on or consumption of luxuries on a lavish scale in an attempt to enhance one's prestige.
[2] Euromoniter International ‘The Luxury Goods Trends Report’ 2017
[3] www.lazebratulum.com
[4] When conspicuous consumption becomes inconspicuous: the case of the migrant Hong Kong consumers - Journal of Consumer Marketing, Vol. 18 Iss: 6, pp.474 - 487
[5] Residents' Perceptions Toward the “Chinese Tourists' Wave” in Hong Kong: Asia Pacific Journal of Tourism Research
[6] www.StraitsTimes.com/singapore/for-many-its-still-shop-shop-shop-till-you-drop
[7] www.hongyi.li/papers/bling.pdf
