Why is luxury outpacing inflation?

All markets are being hit hard by price rises, inflation is the world's number one concern, social inequalities are widening, and yet the price of luxury goods – particularly iconic leather goods – has risen to unprecedented levels (the price of Chanel's 2.55 model, for example, rose from €6,050 in December 2020 to €8,990 in November 2022). The “houses” are not experiencing the crisis and are smashing records, as if the desire for luxury knew no bounds; indeed, far from being squeezed by prices, demand is only increasing: how can we explain this?

For a very large proportion of customers, buying a luxury brand means freeing themselves from the constraints and fluctuations of the world, giving them the impression of living to the max; for others, luxury embodies an absolute of secure value, products that can be passed on, a landmark in a world of uncertainties, a lasting investment.

The motivations of the first category of customers are reminiscent of La notion de dépense, a text by Georges Bataille published in 1933. In it, he explains that human beings have deep-seated motivations and considerations, foremost among which are the satisfaction of the ego, desire, archetypal stimuli and what he calls "energy", a vital and non-moral power, in other words the mythological or psychoanalytical Eros.

The quotation from William Blake – Exuberance is Beauty – concentrates Bataille's point of view and his thoughts on the way the economy in general functions. For him, "spending is the only way to fight the anguish of death", a reality that is inevitable but transcended by connecting with the vital energy of the universe, Eros.

Luxury purchases embody unreasonable yet comforting “spending”, a real release, an outlet

We saw it all over the world with Covid-19: the fears generated by the health crisis created a desire for revenge, an appetite for luxury that was inversely proportional to the restrictions of the previous months, as if "the more we spent, the more we felt alive".

Today, in the face of the economic, ecological, geopolitical, financial and social crises that are all around us, luxury purchases embody unreasonable yet comforting “spending”, a real release, an outlet: in an apparently paradoxical but profoundly logical way, the more expensive the product, the more inflation weighs on purchasing power, the more it helps to liberate us by showing us that we have the means to free ourselves from the weight of the world.

Luxury also takes advantage of the lipstick effect, these purchases of premium products to give itself an immediately visible status image, on a very large scale for the most affluent, more modestly for others, but always with the same function, "to be the expression of freedom, sovereignty and abundance". (La notion de dépense, Georges Bataille - Éditions de Minuit).

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4. The 2022 advertising awards for the general public
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6. Why is luxury outpacing inflation?