Overspending Is So Last Season

Conspicuous consumption is officially dead – or, at least, it’s so…last season. For the first time in memory, the Neiman Marcus holiday catalog has discounted its fantasy gift items. This year’s flurry of stories don’t focus on the fantasy, but the downsizing. The priciest item in the 2009 catalog is a mere $250,000 – far below the seven and eight-figure indulgences of the past. (The top gift is a his-and-hers Icon aircraft, with flying lessons thrown in. So, you can be a high-flier on a budget…relatively speaking.) More to the point, nearly half the items in this year’s catalog are under $250.

I know, it’s hard so feel too shocked about the retrenchment, but I did find it ironic. After all, the Neiman’s catalog, with its over-the-top gifts, is practically the mother of luxury brand public relations – at least of the mass-market variety. No one expects anyone to actually buy the items. If the store sells a handful, that’s icing on the PR cake.

The idea, of course, is to sell the dream, courtesy of Neiman Marcus, and to link the brand with our most rarefied fantasies. You might not buy the airplane, the $105,000 Jaguar, or even my personal favorite, the $7500 tour of the Maker’s Mark distillery near Louisville, Kentucky (a trip I’ve actually taken, no-frills-style, when the brand was my client.) But amidst all the buzz, a $100 cashmere sweater from the same catalog takes on a little more cachet. It’s a classic campaign of aspiration.

But as even Gucci belts have been tightened, Neiman’s needs to bow, however discreetly, to changing sensibilities. There’s evidence that it’s more than just perception. The Wall Street Journal reports that the wealth of America’s high-net-worth individuals plummeted by more than 22 percent last year. Consulting firms who study baby boomer spending habits have released depressing predictions of a permanent change in consumption.

Though the recession seems to be lifting, for luxury marketers, it’s a good news-bad news thing. Much of the consumer research echoes the findings of Unity Marketing, which specializes in tracking luxury trends. Its latest study of consumption by the wealthy reveals that there’s a new “values-based” mindset among the affluent.

According to Unity’s chief economist, the very idea of luxury is assuming a negative connotation. Though marketers may benefit from pent-up demand for high-priced goods and services, “recession chic” is in. Acquiring upscale labels as a badge of status is not. Many experts agree with the firm’s economist, who predicts the attitudinal shift will outlast the recession.

In other words, it’s cool to be cheap. The wealthy are moving from Cartier to Costco – and bragging about it. My favorite line is from a Hollywood publicist who told the L.A.Times, “I’m biting my nails in lieu of manicures.”

So, is overindulgence simply over? Has is gone the way of Uggs and trucker hats? Worse, has fantasy been permanently marked down? Don’t count on it. Part of me likes the anti-status trend, but I don’t fully trust it. Maybe shopping in one’s closet, staycations, and brown-bagging it will still be the new normal this time next year, but I think that marketers like Neiman’s will adapt without giving away the store. And consumers who can afford it will live large, while boasting a little less, and maybe appreciating it a little more.

And those Uggs, they just won’t die. In fact, there are Uggs slippers for only $100 in – you guessed it – the Neiman Marcus catalog.

Manic Recession

I’m fascinated by some of the words and expressions that have been coined by what some PR types (like me) have euphemistically called the recent “downturn.”   My favorites are “chiconomics” and “recessionista,” since it’s fun and consoling to think you can stay stylish while being frugal.

But after reading Maureen Dowd’s editorial earlier in the week, I fear that the term “affluenza,” taken from the PBS program and book of the same name, is more appropriate for many New Yorkers. We’ve overindulged in consumerist behavior to our detriment and are now undergoing a kind of “detox” just as the banking system tries to do the same. But there are some rewards to changing habits.

As a consumer, I run to extremes.  When the market started to melt down last year, I clamped a tight lid on discretionary spending – the headlines and my own tendency to catastrophize had me watching every penny.  It was so draconian that I recently either slipped up or rebelled in the form of a minor gift-buying spree at the Gap, a store so ubiquitous and utilitarian that I never thought of it as anything but a note on my to-do list.  But, after months of relative restraint, and given that I tend to buy everything online at, say, midnight, it was mildly thrilling to walk into a store in the middle of the day and dig through spring tops and brightly-colored spring accessories.  The sheer frivolity of a shopping errand that a year ago would have been utterly ordinary was a tonic, and I’m not even ashamed.  I may even do it again.