Before the economic downturn, pricey expenditures were common … and unmistakably visible. But, then, the recession hit and portfolios plummeted, housing values dropped, and job losses soared.
Suddenly, that fun Louis Vuitton “graffiti” satchel felt more like a liability than an “It Bag.”
And while consumer spending and other recent economic indicators point to some financial relief on the horizon, the recession seems to have ushered in an end to the era of bling.
In its place, is a more considered point of view about luxury. Those who are spending on high-end goods are giving more thought to what’s worth the splurge and, perhaps, what’s appropriate in this fragile economy.
Here’s what luxury looks like these days:
Even in the worst of the recession, people were springing for little luxuries to get their minds off greater economic worries. A $25 bottle of apricot-colored Chanel nail polish or a $48 gold-and-black tube of Tom Ford lipstick feels like an affordable indulgence to some.
That’s likely one reason why shares of beauty retailer Ulta are up nearly 50 percent since January, and prestige beauty sales in departments stores were up nine percent in 2011 over 2010.
Redirecting impulse- and trend-based buys to smaller price points is, in theory at least, a pain-free way to splurge.
Tailoring vs. branding
Designer logos that were a mainstay of high-end goods have become frivolous signs of excess these days.
Rather than trying to flaunt rank with logos and other embellishments, people are now seeking out marks of quality that might only get noticed after a second look; the hand-stitching of a beautiful handbag, for instance, or the exceptional tailoring of a custom dress shirt.
“Luxury is what you can repair,” is how the former head of French luxury brand Hermès explained this trend.
Under the radar
Tiffany blue. Hermès orange. The brands’ colorful shopping bags have “badge” value, and were once flaunted as much as the products they carried inside.
But at Hermès, shoppers can now opt for more discreet brown bags to conceal pricey contents from prying eyes. Luxury online retailer Net-A-Porter has also added “basic packaging” as a shipping option. Instead of the retailer’s glossy black boxes, the luxury buys can arrive on your doorstep in a “more subtle” brown now.
Other sectors have gone the same route. The Wall Street Journal recently reported on high-end home security, which is seeing demand fall for showy home security gates. Instead, clients are requesting nondescript entries, which are less likely to attract unwanted attention, but, at the same time, are concealing high-tech and pricey fortifications like vibration-sensitive cameras and facial recognition devices.
A state of mind
For many who can still afford major expenditures, luxury has become a way to show that they recognize their choice status and, perhaps, to assuage feelings of guilt about it. Consider how Prince William and Princess Kate opted for charitable donations in lieu of wedding gifts, or how Prince Charles retrofitted his transportation fleet to run on biodiesel.
More evidence of that shift comes in the rise of “responsible” luxury travel, where local craftsmen, communities, and environments benefit from the influx in travel spending.
To be sure, the recession has prompted new views on luxury, but one thing has stayed the same: our efforts to manage money will always remain highly complicated, if not emotional, endeavors.
Pauline Hammerbeck is an editor with the Allstate blog, which helps people prepare for the unpredictability of life. Follow Allstate on Twitter, Facebook or Google+.