Luxury Goods Offer Empty Rewards

Addison Pendegraft, section editor

While luxury goods carry an image of status and exclusivity, that allure fades quickly when weighed against inflated costs and fleeting value. Luxury can be defined as a product that is not essential to life, but rather as an indulgence associated with affluence, often at a higher price. This has always been a sort of a paradox, and for economists, has defied traditional market logic with being highly desirable but not nonessential. A deliberate tactic is often crucial to this associated of affluence called “artificial scarcity.” 

Artificial scarcity refers to the intentional reduction of a product’s availability, even when production capacity could meet higher demand. It's a sound strategy -  what is difficult to obtain automatically becomes more desirable. It plays on human psychology, triggering what is known as FOMO (Fear Of Missing Out). Luxury brands such as Chanel, Hermès and Rolex often purposefully limit the availability of their products to maintain their exclusivity. This is typically done through sales tactics such as limited time deals or making certain products exclusive to specific cities or boutiques, which allows the brands to ramp up the price to even more unreasonable levels. 

“It’s probably one of the biggest scams in modern times,” said Sena Obideen, a sophomore with a part-time job, when asked about artificial exclusivity. 

An instance of artificial scarcity creating the illusion of his timely exclusivity is Amazon’s “Lightning Deals” refreshing hourly, urging shoppers to act fast or travel sites flash, or “Only 2 rooms left!” warnings to heighten anxiety. These illusions result in split-second decisions with little time for second thoughts, allowing companies to profit much more due to the distress of their shoppers. 

Another excellent example of artificial scarcity is the massive monopoly corporations have had in the diamond industry since the 1800s. While some may believe that diamonds are highly priced due to their rarity or mining difficulty, which isn’t a baseless worry, but can be remedied with lab-grown or manufactured diamonds. The true reason for their obscene price is due to corporations buying all of the stock and then selling only enough to meet annual demand. That creates the illusion of rarity which allows those brands to artificially increase their costs by a staggering amount and little consequence as they’ve been doing it for centuries. 

It’s not enough for a product to be well-designed and crafted with the best materials, dupes cannot compare to luxury brands because unlike dupes, luxury brands have the exclusive quality of being genuine according to Psychology Today. 

Often what determines the valuation of a product is not the actual cost of producing them, but rather the reputation of the brand selling them. Which is the reason why luxury brands such as Gucci display their logo over their pieces of clothing, At the end of the day, people are paying for the logos more than the actual product. 

This deception of luxury has also resulted in an entire market dedicated to duplicates (dupes) and fakes, to blend an emulation or envy of aesthetic taste with material desire. An excellent example of this is Shein, the fast fashion brand, that has become a master at the art of creating dupes. While Shein's revenue significantly outpaces that of most individual luxury brands like Zara or H&M, with a reported revenue of $32.5 billion in 2023, it generally falls below the annual revenue of a diversified luxury conglomerate like LVMH – which is the parent company of Louis Vuitton -  which has an annual revenue of over $70 billion. Often, people prefer this over acquiring genuine luxury items due to their significantly reduced price while still maintaining its allure. This allows those who cannot afford to spend so much on a nonessential to be as included as those with that privilege.  

“You’re rebuking the exclusivity and elitism of luxury fashion, but still participating in its aesthetics,” said Arielle Richards, multimedia reporter at VICE Australia, about the benefits of using dupes her article. 

With this aspect, it’s hard to believe that luxury brands are even worth it if there’s access to products with similar allure at significantly lower prices.