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Opulence in a time of Scarcity

Posted by Flux on 

22 February 2012

By Bronwyn Williams

What’s trending now?

Opulence in a time of scarcity

People are indulging in outlandish luxuries that they may or may not be able to afford…

Rolls Royce sold 31% more cars last year than it did in 2010. And silly extravagances like £50 million diamond-encrusted Damien Hirst skull Christmas decorations continue to gain popularity.

It’s seems as though consumers have forgotten that we’re still in the midst of the Great Recession, and are spending like there’s no tomorrow. Or perhaps people have just grown so tired of saving and forced austerity measures that they’ve swung the other way into a period of wholly unjustified reckless exuberance…

Either way luxury goods sales are up, the world over.

To quote Standard & Poor’s’ “Can Luxury Goods Continue to Deliver Rich Returns in an Era of Austerity?” report:

“Whereas the consumer goods sector in general is coping with the fragile recovery facing the spectre of a second recession in Western Europe, sales of designer handbags, premium quality cars, and other luxury goods continue to climb,”.

South Africa is no exception.

Africa has the fastest growing ‘high net worth’ population in the world. And at Sandton City –  where it’s not uncommon for ‘black diamonds’ to drop over R100,000 on a single purchase – luxury stores have seen business increase up to 30% over the last five years…

Why it’s important? 

The extravagant, reckless spending only highlights the growing divide between the ‘haves’ and ‘have nots’. The Sunday Time’s ‘Rich List’ recently showed South Africa’s 20 richest individuals to be worth a collective R112.2 billion. In contrast, 24 million – or a full 48% – of South Africans live below the poverty line, on R322, or less, a month. This makes South Africa one of the most unequal countries in the world. And, as the rich flaunt their wealth for all to see, the poorer amongst us are tempted to follow suit, whether or not they have the financial means to do so…

Accoringing to the South Africa Reserve bank, South Africa’s average national household debt stands at a scary 75% of disposable income. This is obviously a precariously unsustainable situation.

What’s the butterfly effect?

The current reckless spending, in reaction to the protracted global recession, is glaringly similar to the decadent, roaring 1920’s in the years leading up to the Great Depression.

Even fashion foretells a similar omen:

Great Depression ‘skyscraper’ heels back in fashion.

With even six and seven inch heels, no longer high enough, Christian Louboutin’s ‘extreme’ eight inch stilettos (below) have taken the towering trend to new heights…

 

‘Killer’ heals indeed…

But according to the ‘stiletto index’, the higher the heels in fashion, the closer the world teeters to a full blown depression…

The ‘stiletto index’ accurately predicted the stock market crashes of both the 1920’s and the 1980’s.

As Germaine Greer so eloquently puts it:
“Now is the towering shoe moment of the Noughties, which will be followed by the inevitable fall.”

In short, luxury brands should enjoy their popularity and prosperity while they can.

The global hot spots

International brands capitalising on the current consumer luxury mania include Kaviari, and Chien Bleu.

The French company Kaviari (below) sells stylish, tiny, 100 calorie tins of En-K De Caviar for upwardly-mobile consumers on the go. The “little luxury for everyone” costs upwards of 30 Euros for a 15 gram tin of caviar.

 

Chien Bleu is a luxury travel agency, for dogs. The company bills itself “the UK’s first and only travel specialist devoted to fine accommodations truly welcoming to dogs.” This is not very surprising when one considers that pet owners spent over 50.84 billion dollars on their ‘fur children’ in 2011.

The pioneers

The South African Luxury Association (SALA) has declared South Africa as the ‘New frontier for luxury brands.

SALA’s focus at the moment is on ‘The Ethics of Luxury’.
Although ‘ethical luxury’ might seem like an oxymoron at first, it is, perhaps, the only sustainable way for luxury brands to survive far into the future.

The challenge now, is for luxury brands to justify their ethos, and their environmental and social impact.

As people slowly sober up to their financial reality; brands should expect to a see a shift from consumers simply buying ‘more’ to buying ‘better’.

‘Better’ that is, both in terms of quality and ethics.

In short, luxury is here to stay, provided it provides value and sustainability in addition to mere ‘bling’ and status.

 

About Bronwyn

 

Bronwyn is an insatiably curious avid reader and an amateur psychologist who takes a keen and amused interest in observing the human condition.
She is constantly astounded at how predictable the world is once one is aware of the underling historical cycles shaping the trends driving our society forward.

 

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