Conspicuous consumption is a way of purchasing goods or services for the specific purpose of displaying one’s wealth. Conspicuous consumption can be identified as a way to show a person’s social status by purchasing patterns, especially when the goods or services that are publicly displayed are too expensive for other people in the same social class. This consumption type is typically associated with the wealthy social class. However, it can apply to the economic class as well. Conspicuous consumption is a way of gaining social status and reputation in society.
The theory of conspicuous consumption was initially discussed by American economist and sociologist Thorstein Veblen in the book he published in 1899 ” The Theory of the Leisure Class“. In his book, Veblen discusses that the need of consuming goods or services in order to show off one’s wealth is a living pattern that goes back to the Tribal period. He also explains that even though the consumption objects got changed over time, the concept of flamboyant ownership has remained the same throughout.
The growth of this kind of consumption has been highly developed in the middle class during the 19th and 20th centuries. As this group has a more significant amount of disposable income to spend on goods and services that are not necessities, the conspicuous consumption patterns have increased.
Smartphones, computers and other technological devices, supercars, and fashion accessories are a few examples of these types of spending patterns.
There are many reasons that have been identified for the people to conspicuously consume. Some express it as a result of capitalism as the consumer societies as well as the business world has become more industrialized and the businesses are creating more value through products and services by manufacturing luxury products. On the other hand, some believe that the goods and services consumed and owned by people define the person’s character and abilities.
The conspicuous consumption theory helps to understand the importance and the role of consumption beliefs of consumers in the growth of economic markets and the consumers’ obsession with material possessions.
There are many theories behind the concept of why people consume products conspicuously. Some theories express that it is due to the competitive nature of the individuals in society. Owning luxury goods and experiencing luxury services can express superiority for the possessors over non-possessors. This feeling and belief make people compete with each other for the ownership of such luxury goods and services.
Another theory expresses that the feeling of insecurity of individuals drives them to consume and possess luxury material items. They use luxury items and experience luxury services as a way of hiding their personal insecurities. They believe that the use of luxury items will cover their weaknesses and insecurities and will help to create a public image in the society with a high persona.
In his book, Veblen explains that advertising and direct marketing play a major role in marketing products to customers with conspicuous consumption patterns. The companies who advertise luxury brands create a need in the customers to associate themselves with that product. They usually emphasize the social recognition and the superiority factors through advertising to gain customer attention for the products or services. This can lead to the conspicuous consumption of the products as the people believe that can achieve the reflected positive image through consuming the luxury brand products.
The theory of conspicuous consumption shows a reflection of the culture, social and economic class that the consumer of the product lives in. The two main reasons for the conspicuous consumption theory, to gain recognition between the peers and to obtain social recognition show the personal and public perception of the consumers. Based on these types of thinking patterns, the societies that give higher attention and importance to the external values of the people are called collectivist cultures. These cultures encourage conspicuous consumption behaviors.