Oh, the shame of buying $1,000 purses!
Study suggests 'shopping guilt' is slowing economic recovery.
What is holding back our economic recovery?
Maybe it’s shopping guilt. The Wall Street Journal reported last week on a study that said “luxury shame” is keeping shoppers out of high-end stores. Until consumers can overcome their guilt about spending money on high-end products, those poor marketers of luxury goods will just have to suffer, The WSJ reported.
Guilt has always been part of the shopping experience. But retail executives say it has become such an overriding emotion among shoppers since the economic crisis set in last year that it is delaying the recovery of the luxury-goods industry. Shoppers are suffering from "luxury shame," consulting group Bain & Co. said in a research report.
The article cites as an example the guilt felt by 24-year-old Carolyn Hsu, founder of The Daily Obsession shopping blog, over her purchase of a Tod’s bag for $1,000 at a private luxury sale. Later, she hid the bag at the back of her closet. “I try not to have those moments anymore,” she told the WSJ.
We’re the first to admit that, despite being more than twice Miss Hsu’s age, we’ve never felt the urge to spend $1,000 on a purse. (Maybe that would have been a wiser investment than Florida real estate.) We are carrying our recent purchase of the perfect $4 bag from a thrift shop with pride, despite being persuaded to spend another $2.99 on a wallet to go with it.
- Bing: Best deals on shoes
Luxury retailers are trying all sorts of tactics to coax shoppers such as Miss Hsu over their guilt and get them back into the stores. They’re finding such techniques as pop-up boutiques, a sort of temporary store, online shopping and tie-ins to charities somewhat effective but, as we know, guilt can be difficult to overcome.
Let me try to make sense of this: Consumers are feeling “guilty” about shopping for luxury goods and their “shame” is delaying a recovery in the luxury goods markets? How about the fact that unemployment is about to exceed 10% through 2010 and those fortunate enough to have pension funds and 401ks have seen their value halved over the past 18 months and that wise thinking -- along with astute rationale judgment -- is the more plausible explanation for this consumer cut back? Not guilt.
We’ve heard numerous stories in the last year about “luxury shame” among the wealthy, filled with such anecdotes as tales of shoppers at designer boutiques asking for their purchases to be placed into plain white shopping bags rather than the usual prestigious logo-printed wrappings.
But count among the skeptical The American Affluence Research Center, which says that America’s wealthy are not behaving any differently than they ever did.
“Most of the affluent are behaving like their normal, rational, and frugal selves,” wrote Ron Kurtz, president of the center. “Their careful spending is not a new trend.”
It seems the nation’s wealthiest are not among those regularly dropping $1,000 for handbags and $750 for Manolo Blahnik shoes. In fact, the center’s survey of the wealthiest 10% of U.S. households found they are more likely to spend less than $120 for nice shoes, less than $100 for an everyday purse and less than $75 for a pair of women’s jeans.
Maybe that’s why they have more money. Maybe the Carrie Bradshaws of the world (remember all those Manolos on "Sex and the City"?) should have felt a bit more guilty about buying all those expensive shoes on a writer’s salary, which -- trust me -- makes DSW the shoe splurge source.
What do you think? Are the wealthy really cutting back on conspicuous consumption because it makes them feel guilty? What purchases make you feel guilty? Or can you buy anything you want without guilt as long as you can afford it?
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
ABOUT SMART SPENDING
LATEST BLOG POSTS
Some workers lose up to a quarter of their paychecks paying off old debt from credit cards, medical bills and student loans, as well as child support.
VIDEO ON MSN MONEY
BLOGS WE LIKE
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'