‘Luxury Shame’ Stands in the Way of the Luxury Market’s Recovery

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Photo: Touchstone Pictures

The luxury market is suffering not because of soaring unemployment rates or depleted bank accounts. Rich people have money; they just feel bad spending it. Consultants at Bain & Co. just put out a paper identifying "luxury shame" as the worst roadblock to the luxury fashion industry's economic recovery. An executive at a "European luxury powerhouse" who did not want to be identified told The Wall Street Journal that guilt is the biggest problem companies like his face.

But guilt sets in quickly. "It's not very strong at the beginning but increases when you swipe your credit card through the credit-card reader," says [brand strategist Martin] Lindstrom, who conducted three years of studies in neuromarketing — hooking 2,000 people up to sensors to monitor the brain's response to ads and brands. Guilt flashes up in the prefrontal cortex — the same reaction generated in a smoker who has finished a cigarette.

The founder of the Daily Obsession, a shopping blog, said she still feels shamed for spending over $1,000 on a Tod's bag months ago.

"I try not to have those moments anymore," says the 24-year-old, who also works in marketing. "I still have [the bag], but it hides in the back of my closet."

But surely if she took the bag out of the house, that would justify spending over $1,000 on something from Tod's? Well, not exactly, because then she'd be the jerk walking around with a four-figure bag on her arm, and then she'd feel guilty for being That Girl.

In fact, people like the Daily Obsession founder are so afraid of being That Girl, they are entirely avoiding geographic locations where tempting stores lurk. Fashion companies have been forced to tackle "luxury shame" with equally intense psychological tactics. Such as tying purchases to charitable causes or making shoppers think that what they're buying will save the planet. And an increasing number of luxury labels are opening pop-up shops in unexpected locations as if to accost shoppers on roadways they thought possessed no threats.

We think fashion companies are taking the wrong tactic. A lot of people went into stores — and even bought things — on Fashion's Night Out. And it wasn't because they wanted to buy guilt-free ecofriendly socks or donate old sneakers. It was because pretty much every store had free booze and a lot of people got drunk.

Fighting Back Against Shoppers' Guilt [WSJ]