18 November 2010

Current Events: Inflation/Deflation and Your Empty Wallets

While economists are scratching their heads with worry over deflation, I really can't help but wonder "WTF" when it comes to luxury goods pricing. Back in July, Chanel had its unilateral 20% increase on its purses in the midst of our recession (/whatever, slow recovery), and they weren't alone. When I first became cognizant of super luxury goods just after high school, I recall thinking a $1,200 price tag on a purse or $400 for a pair of shoes to be unfathomable. These days, $1,200 for Chanel is a bargain and we're all quite unfazed with $800 pricetags on footwear. Are we really that much richer? No. Did we think we were that much richer? Yes, I suppose we did back when we thought our homes would never devalue and when credit was easy to come by, but what about now? Why do I still see people posting on forums about scrimping and saving (or worse, going into debt!) to buy the it-bag du jour? When I catch an old episode of "Sex and the City" and see Carrie's totally useless understanding of money, I just shake my head that these are the icons young women have. Nowadays with the proliferation of the internet, this is an even bigger issue. At least when I was in middle school and high school, my lack of awareness of the super rich shielded me from desiring things I couldn't and wouldn't try to afford. It's amazing how the luxury retail industry has managed to cast its super wide net these days to capture the imaginations of what, in my opinion, are minds that are way too young and impressionable.

Americans, and the other nouveau-riche nations (looking at you Russia, China), love to be outrageous. There's an entirely different attitude to luxury in the old world although even that might be changing with the power of marketing. Warning: stereotyping and generalizations to follow. One thing I love about Italy and many other European countries is that they don't seem to be obsessed with consumption. They like nice things, will spend to buy them, but also do so within their means and do not glorify the process. For instance, I was surprised in Vienna to see Prada being sold at a non-descript shoe store without fuss or pomp. What? This is just a regular ole shoe store? This is just normal life?

Windowshopping in Vienna

Having worked with several small-medium sized private Italian, family-owned companies now, I have noticed that the emphasis is not on growth and accumulating more and more, but instead on creating a valuable product for the family legacy, their employees, and of course, their customers. This is seen in everything from manufacturing goods down to mozzarella at the little deli on the corner. The attitude toward "things" or "wealth" is not about just wanting more and more, but it's seems to really focus on achieving the "good life." Thus, you see the lovely shoes just being sold in stores not to represent some achievement of status, but just because they are nice, quality things and deserve to be in everyone's lives--at least this was my interpretation.

On the one hand I do love nice things. On the other hand, spending a few thousand on a bag just seems like an awful waste with the shareholders of LVMH (et al) laughing all the way to the bank. Ah, internal conflict.

I type this as I enjoy my daily hit of Starbucks and $12 salad lunch. I'm not sure what I'm saying. I hate the cult of consumerism yet am stuck in it as much as anyone else. Oh, and also the price increases on luxury goods are just ridiculous. I mean ok, fine, the Chinese are doing a lot of the buying these days and they do have serious inflation, but still. It's crazy. Dead cow stitched into a nice shape with a honkin' shiny logo is not worth it (although I will gladly accept a gift haha).

All right, this blog post was totally scattered. Excuse me now while I go find some quality leathergoods, probably Italian-made by some small private company without a hefty marketing budget tacked on. Quality for the sake of quality--not for some imagined fantasy of status and wealth along with its 20% price increases! What-ever, Chanel.


  1. Great post, and an absolutely necessary one for some people to read. For me, buying a luxury item is and will always be a big deal, but mainly because I equate that with being able to afford it. I don't think I could EVER bring myself to buy something expensive and make myself go into debt because of it. How can you enjoy a purchase like that when it's making you wonder how you're going to pay your car note or keep the lights on? Prioritizing is really important in life.

  2. Oh, and I forgot to add: inflation of prices on so-called designer goods is one of my biggest pet peeves. I understand that sometimes, with a name comes better quality, but that isn't always the case. Most of the time, I believe the luxury goods consumer is getting fleeced.

  3. i enjoyed this rant of yours, because it's one i go on here and there as well. i love nice things, what modern girl doesn't? thousands of dollars on a piece of leather is outrageous, whether you can afford it or not (obviously, even MORE ludicrous if you CAN'T afford it). or maybe it's because i keep hearing my mother's nagging voice telling me, "think about the kids in [whatever third world country here]!" interesting point regarding the euros' approach to luxury.

    on a semi-unrelated note, that little piggy image reminded me of this article: http://www.huffingtonpost.com/2010/11/15/piggy-banks-made-from-rea_n_783901.html. i'm half-relieved the idea didn't come from the U.S. but i am also half-horrified because i was born and raised in canada.

  4. ack. redaction: "i love nice things, what modern girl doesn't? BUT thousands of dollars on a piece of leather is outrageous"

  5. That piggy bank is fairly disturbing, but I admit I do enjoy taxidermied animals--perhaps too much. Heehee

  6. hey. fuck you. the marketing budget pays for many of my meals. and the liquor i am currently plastered on.