I was intrigued when I saw this ad in the latest issue of Fortune magazine featuring a first of its kind Omega + Swatch Moonstar Speedmaster. Usually, the luxury brand Omega does not make references of its parent company SWATCH, which many common people around the world may not know about.
The luxury of Omega, combined with the affordable Swatch label, makes it an interesting combo after all to buy, which costs approximately USD 1,000.
It is also that time of the year – September – when Apple launches its newest model and claims to be the best iPhone ever, with pricing starting at USD 1,000.
Apple aficionados queue up outside retail stores when the new smartphones launch, even as Android Warriors criticise the over-priced jewel, claiming several features are already on their devices.
While the Earth is divided between those who wish to take a bite of their beloved Apple, Economists and Financial Advisors – qualified specialists as well as self-learned ones offer unsolicited sermons all over social media, how investing INR 85,000 on a depreciating asset is such a waste.
In a way, yes. Especially, when youngsters as well as parents buy an iPhone on EMI, hoping on future earnings. Luxury comes at a cost, after all.
However, what we seldom correlate is the good-old Maslow’s Theory where consumers wish to seek higher-priced products as a way to celebrate their status – current as well as projected one.
For Ex., someone in the media industry as a Creator or as an Influencer, would not just want to flaunt the latest iPhone that they use for their work, but may also put it to great use.
A friend of mine once told me, whether it is a Timex or a Rolex, they show the same time, however where and when they are used matters.
If an Alto and an Audi are just meant to transport people from one point to another, then the whole world would remain with just the basic necessities, with NO interest in “wants and desires”. For some, a new iPhone or a MoonSwatch could be a need, or a want or a desire.
Consumer brands always build aspirations in the mind of prospective buyers so they don’t just use the said product, rather live the product as well.
The entire argument of why to own expensive stuff, while people in countries like Japan and Germany are moving towards Minimalism, is quite true. However, the cost of luxury is embedded in the human psyche and only humans crave for a step-up.
One would rarely or rather never find a Tiger say, I wish to hunt for a premium variety of Deer! Call it the animal instinct or the feeling of “survival of the fittest."
Humans, read: Consumers, always wish to upgrade themselves and look younger, cooler and more desirable to their intended audience.
Another example is why most people in India “dye” their hair – pitch black, when half their hair on the head is grey (or even silky white). It is just the aspiration to look “not-so-old” and stay relevant to their friends, family members and colleagues at workplace.
Several brands have made a killing with this simple desire (or a basic need if you would call it so) to ensure the hair on their head looks pitch black.
Coming back to acquiring luxury – it is a sin to borrow money to buy such products, even though one may know reasonably that they can pay back their debts.
Dr. Vijay Mallya / Mr. Anil Ambani / Mr. Venugopal Dhoot are striking examples too. They simply tried every trick in the playbook that any other businessman would do. Just that they over-leveraged their future income over the present.
Reiterating the same point, Time and Luxury come at a cost. It is perfectly fine to spend using credit cards to acquire luxury, except that one should ensure they do not over-spend than they can ever pay. Or repay, rather.
