Shift to Inconspicuous Consumption– New Norm for Consumer Buying Behavior: Less Flaunting– Wealth, Income, Power…

Inconspicuous consumption is the purchasing of goods, services… that conveys a lower socioeconomic status… the inconspicuous consumer doesn’t want to impress anyone. In fact, what they really want is for other people to think of them as being lower on the socioeconomic totem pole than they really are. This is partially a desire not to flaunt one’s good fortune and it’s also a security measure, the idea being that one will be less likely to be robbed if one doesn’t act or appear rich…

In contrast, conspicuous consumer spends money to impress people and to ensure that others are well aware of the spender’s socioeconomic status… Conspicuous consumption is one of the oldest ideas in consumer behavior… As Thorstein Veblen noted over a century ago in his book– Theory of the Leisure Class– in which he coined the phrase ‘conspicuous consumption’– spending lavishly on expensive but essentially wasteful goods and services is ‘evidence of wealth’ and ‘failure to consume in due quantity and quality becomes a mark of inferiority and demerit’…

Being millionaire is becoming commonplace… The newly wealthy are often desperate to affirm their status by conspicuously consuming the favored brands of the already rich… According to James Lawson; price of entry for much of what traditionally was available to the top 0.001% is now far lower… and a sorry dilemma for an observer is– How do I know if the person who is driving a Ferrari owns it or is just renting it for the weekend? Demand for luxury items is soaring in emerging economies, such as; Russia, India, Brazil, China…

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The emerging consumers have a big appetite for the top luxury brands– and the owners of those brands are increasingly keen to oblige… According to Virginia Postrel; conspicuous consumption is much more important when people are not far from being poor… Yet rather than abandoning status anxiety, the way the rich seek to display their status may simply be getting more complex. As inequality grows again in rich countries, some of the very rich worry about consumption that is so conspicuous to the masses that it may provoke them to try to take their wealth away…

But perhaps the true symbol of exalted status in era of mass luxury is– conspicuous non-consumption. This is not just a growing tendency of the very rich to dress scruffily, drive beaten-up cars, as described by David Brooks in ‘Bobos in Paradise‘, but it’s showing that you have more money than you know how to spend… So, for example, philanthropy is increasingly fashionable… However, since the new philanthropists are keen to demonstrate that their giving produces results, this does not quite meet Veblen’s threshold of being a complete waste of money…

In the article Rise of Inconspicuous Consumption by Jonathan A. J. Wilson, Giana M. Eckhardt, Russell W. Belk write: Since Veblen coined term ‘conspicuous consumption’– the wisdom has been that wealthier consumers seek to distinguish themselves by flaunting their wealth via luxury consumption, which is unaffordable to main stream consumers. But, there is evidence that there is an evolving diminution of the term ‘luxury’ and it’s having a reciprocal effect on the appeal of conspicuousness at the upper end of the market– that is, the ‘conspicuousness’ of a brand will increase its price, to a point; then, it tends to decline…

This suggests that the consumers who can afford truly high-end brands (who are not price sensitive) are tending to prefer inconspicuous consumption… This shift from conspicuous to inconspicuous is a signal that can be seen in luxury brands, e.g.; Louis Vuitton uses their subtle ‘V’ in the knitted pattern of a sweater, rather than its former ubiquitous, easily identifiable logo…

In part, it’s an effort to differentiate the high status consumers from over-the-top conspicuous consumption of the nouveaux rich, and aspirational consumption of lower status consumers who tend to weaken a brand image by consuming more mass market versions of luxury goods… Also, in some urban societies there are increasing attitudes to sacrifice less visible ‘necessities’ like– food, medical care, adequate shelter…

In order to afford more visible ‘luxuries’ like– designer clothes, mobile phones, watches… and, for those who cannot afford to make these sacrifices, there are– knock-offs… All these trends dilute the status ‘signaling’ ability of luxury goods… and points toward a need to understand how to develop, manage brands– inconspicuously… and, challenging the conventional understandings of the importance of conspicuousness… There are economic forces, social trends… that are leading to rise of inconspicuousness and we must begin to understand how consumer constructs, such as; luxury, buying habits… are being redefined.

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In the article Inconspicuous Consumption by Richard Nicholls writes: Ostentatious is not a favored behavioral mode for many consumers who cannot afford serious quality in their lives. Competitive individualism is not the social force it was, which quietly expresses a savoir-vivre, and makes many markets viable… and there are many specific objects, goods, services… when procured, displayed… scream story of personal success, e.g.; drive Porsche to work, call friends using Vertu Constellation Quest Luxury smart phone, wear Dior three-piece in silk champagne, carry one’s stuff in Fendi handbag, summer in one’s home in Saint Paul de Vence…

These and many others goods, services… are a very emphatic symbols of wealth, and (arguably) sophistication… these are not your softly spoken, just-trying-to-get-through-the-day possessions. They invite the stare and perhaps the envy of others… They deny the need for careful humility in life… It was once a widespread conviction that such consumer impulses were absolutely vital to the performance of markets…

To the extent that consumption can be competitive, i.e., that people would like to buy things which they could, with pride, show to others who did not, or could not, own them… So companies happily keep inventing– new styles, creating new definitions of luxury, churn consumer tastes to fresh expressions of personal elevation… However, now in this modern era, we know from research data that only around 20% of people agree that: I try to buy things I know no-one else owns…

The outcome is a culture in which ‘luxury’ can be enjoyed for its intrinsic merits; it does not need to glitter, glow… in the company of others… The trend of inconspicuous consumption is competitive individualism, but it’s not the force it was in past decades… Here are some reasons:

  • Power of the environmentalist ethic: Over the last generation, the argument that a society over-consumes, wastes too many resources, guzzles scarce energy, has hit the cultural target. Even to take a lot of long-haul holidays is not so brag-able in a polite, green company…
  • De-stressed culture of social mobility: There are fewer outright snobs on the streets, in shops… There is just not the same pent-up demand for proof, branded proof… that a person has made a successful transition upwards into a different level of wealth…
  • Assumption of unstable economics: The recession and its aftershocks has shaken the optimism of even the most robustly prosperous middle-class homes. It’s now, as a result, more crass to vaunt out loud how much you recently paid for your– suit, car, holiday…  Around 70% of people even in the higher income segment were agreeing that: I shop around extensively to get the best deals… It’s just not cool to be a thoughtless spendthrift. Instead social approval is now won by showing what a skilful and focused shopper one is. Meanwhile, large banker bonuses seem odious to many…

In the article Rediscover Inconspicuous Consumption by Rich Cronin writes: For the balance of the last century, most people bought what they needed (and occasionally what they desired), but they made a concerted effort not to draw too much attention to those purchases. Families at all economic levels informed their children that it wasn’t what you could buy that mattered, but how you took care of what you already had.

The common wisdom taught that with a little scrubbing, some whitewash, and a few pots of geraniums, the most modest of shacks could be turned into a charming cottage… However, by middle of the 1980s, many people began to be seduced by new, aggressive forms of advertising and over-the-top– ‘Lifestyles of the Rich and Famous’– television programs that told us we deserved– ‘to have it all’– and having it all was happiness…

Now thirty years later there are occasional signs to indicate that some people may finally be getting their fill of ‘stuff”… If this is true (not simply as byproduct of a sagging economy or aging population), but, perhaps the dawn of a new anti-conspicuous consumption movement… It’s clear that over-buying and flagrant flaunting of material goods has become commonplace, and it’s spreading like a virus across the globe… Before the self-indulgence fever and over-the-top acquisition bug infects everyone… take a deep breath, step back, discover inconspicuous consumption…

Some experts suggest that consumers are over-consuming and there are no signs of let-up… According to kirstendirksen; consumers have developed culture of consumerism complete with a new vocabulary, e.g.; shop until you drop, retail therapy, impulse buys, binge buyers, conspicuous consumption… also new addictions, e.g.; shopping binges, compulsive shopping, shopaholics, addictive spending… Few consumers are immune and for some it’s a real problem… A European Union survey found that 33% of consumers displayed a high level of addiction to– rash, unnecessary consumption…

According to Jonah Berger and Morgan Ward; people choose products, services… to communicate a desired self-identity, characteristic… Brands assist the signaling process through– visible logos, explicit patterns, e.g.; Nike’s swoosh, Burberry’s plaid, Apple logo… all facilitate communication and allow others to make desired inferences about the user-wearer.

Such explicit identifiers are common, but one might expect less overt signals for lower-priced goods, for example; consumers may want other people to know when they bought ‘Armani’ shirt, but they might not want to broadcast it when they bought an item from Wal-Mart… Thus one might expect more explicit branding, such as; visible brand names, large logos… imprinted on more expensive goods…

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Researchers have examined– how ‘publicly visible consumption’ communicates a social identities and– how marketers adorn products, services… with logos, labels… to enable the signaling process, which then fuels the consumers desire to keep-up with the ‘rich and famous’… However, what they found was– although true for mass consumers– the more discriminating consumers preferred more subtle– signs, labels… even though they may be more difficult to identify…

According to Richard Nicholls; inconspicuous consumption is not necessarily a depressive force inside markets. The demand for quality is still systemic but quality does not need to be over-stated… The numbers of people who are moved to express their personality through what they– buy, wear… is low– not in the numbers they were in the past decade; perhaps, consumers are more relaxed… In this setting, it’s instructive to view the vitality of the modern renting markets for luxury goods, such as; designer fashions, sports cars, jewellery…

Many consumers believe that they just don’t need to own, show their goods, services… on the same level as the 20th century model… In fact, this trend fuels the debate about– how to sell, what to sell… in a changing less-visible class-defined society– it’s less full of as many consumers who either want to boast, or are nervous about making social gaffes… Inconspicuous consumption is a powerful and permanent-looking consumer attitude, which requires even more subtle communication imagery…