Part I: Luxury Demands, Commodity Pocketbooks
Part II: "I'm just looking"
A couple of years back I decided to buy a new car. My old Mazda3 was getting up in miles and was starting to show signs of age. I thought the transmission might be going out, the interior was pretty worn and it was just time.
Since i hadn't been in the car market for almost 10 years (I hold onto cars) I thought that test-driving almost everything in the style I wanted, a 4-door sedan, would be the way to go. I started off heading to dealerships, getting harangued (while I typically like good customer service I would not qualify what happens at car dealerships to be such) and finally heading out on a pre-determined course to highlight what each car did well before coming back to the dealership to be hard-sold on a vehicle in which I had little interest.
As I drove, I was noticing a disturbing trend. All of the cars that I was driving felt and looked, minus a few obvious cosmetic differences, almost exactly the same. (Ignoring the Nissan Altima obviously, which is a piece of automotive crap) The Kia Optima was indistinguishable from the Hyndai Sonata, which felt remarkably like the Chevy Malibu, which was remarkably similar to the Ford Focus. I even test-drove a Mercedes CLA 250 which was remarkably similar in form to all of the above. (albeit around $10K more expensive.)
Of all the cars the CLA was the most disappointing. I LOVE Mercedes, I consider them to be some of the finest machines on the road. And what they have created is a middling front-wheel drive sedan with the tri-star badge. It was horrible.
I eventually settled on the Subaru Legacy, in large part, because the driving position was insanely comfortable and the cabin was a nice place to be. I have not regretted that decision, but I worry that the next time I go to purchase a vehicle it will be even worse.
We've entered a moment in consumer history where companies have figured out that they can spin less as more provided they make the price point right. Technologically we've stagnated, and that's in large part because the consumer has decided that the price point is king. Granted, this is not true in all cases. There is such as thing as "label envy" where people will pay more for a "name brand", but in many cases (as with the CLA) the upmarket badge doesn't provide any additional quality.
Louis Vuitton is a prime example of this. They are faux luxury, the victory of marketing over substance. In reality thy make bags of middling quality and unimaginative design that people will pay a premium for because they think it makes them look wealthy. No it doesn't, it just makes you look like you've got the measles.
Despite their upmarket reputation however LV items can be had for cheap. Yes, there are knock-offs, but there are also discount bins at outlet malls and you even find their stuff at Costco. Now, I like Costco, even have a membership there, but there is nothing about the place that screams 'luxury'. In fact, there's nothing about Louis Vuitton that screams it either.
In fact, you name the 'luxury' brand and I'll show you where quality has fallen. Tommy Hilfiger? They used to make GREAT dress shirts, now their items of OK quality for the masses. Polo? Except for their top-end 'couture' lines they're the same. Coach? There's better leather out there, Cadillac? They are responsible for the Escalade, a gigantic waste of tarmac. I've already spoken about Mercedes (except for the S class obviously) and even BMW has fallen off of late. Audi's are basically 4WD Volkswagens (and you can't buy one lest you be branded a prat) even Lamborgini is owned by VW, which is a crime.
Yes, I know, there's still Ferrari, but you can't afford one of those anyway, and I wouldn't drive one on the streets of Houston even if I could.
In fact, very little that is out there today can really be called "luxury" with a straight face. And when someone tries to produce a luxury item they're soon slapped in the face by the realities of market demand.
Consider this: After performing many upgrades to their first and business class services airlines are already starting to pare them back. The reason for this? For the most part they're giving it away as upgrades as the American traveler refuses to pay premium prices for a premium product.
The notable exception to this trend is technology, but I think there are more problems there which I'll discuss next.
