lux – u – ry  (luhg-zhuh-ree)  noun  [from Latin, luxus and its derivative luxuria, excess, indulgence]
1. The habitual enjoyment of or indulgence in the best and most costly things.
2. An inessential and desirable item that is expensive of difficult to obtain.

In contemporary marketing usage, Prof. Bernard Dubois defines “luxury” as a specific (i.e. higher-priced) tier of offering in almost any product or service category. However, despite the substantial body of knowledge accumulated during the past few decades, researchers still have not arrived on a common definition.

Many other attempts have been made to define it using the price-quality dimension stating higher priced products in any category count as luxuries. Similarly, researchers have also compared goods in terms of their uniqueness. Prof. Jean-Noel Kapferer takes an experiential approach and defines luxury as items which provide extra pleasure by flattering all senses at once. Several other researchers focus exclusively on dimension and argue that luxury must evoke a sense of belonging to a certain elite group.

“Luxury” signifies far more than the mere enjoyment of expensive things – it implies an excessive indulgence in sensual pleasures. Indeed, the very word once meant “lust” or “lasciviousness”. 

Luxury has always been controversial, and many influential thinkers believed luxury to be morally corrupting. “On the soft beds of luxury, most kingdoms have expired,” pontificated one writer, while the poet Milton imagined ominously that “All was now turned… to luxury and riot.”

But after centuries of opprobrium, the politics of luxury began to change. A new belief developed in the 18th century that luxury could be a positive force contributing to the wealth of nations. Private vices, such as extravagance and vanity, could be public virtues, because they provided work for countless artisans. Not everyone was convinced. Luxury might be economically enriching, admitted the philosopher Jean-Jacques Rousseau, but it subverted equality and virtuous simplicity. While moralists and economists argued about whether luxury created wealth or squandered it, everyone recognized that luxury goods made the social hierarchy visible.

Jean Jacques Rousseau

Rousseau (in 1753, by Maurice Quentin de La Tour), a Genevan philosopher, writer, and composer of the 18th century. His political philosophy influenced the French Revolution as well as the overall development of modern political, sociological, and educational thought. He argued that private property was the start of civilization, inequality, murders and wars.

A luxury good may be a Veblen good, which is a type of good for which demand increases as price increases. Therefore the effect of a luxury tax may be to increase demand for certain luxury goods. In general, however, since a luxury good has a high income elasticity of demand by definition, both the income effect and substitution effect will decrease demand sharply as the tax rises. In economics, a Veblen good is a member of a group of commodities whose demand is proportional to their price; a reversal of the law of demand. A Veblen good is often also a positional good. The Veblen effect is named after economist Thorstein Veblen, who first identified the concepts of conspicuous consumption and status-seeking in 1899.

$10 million road rocket

$10 million road rocket – Behold, a humongous luxury vehicle that stretches the definition of the word “bus.” It’s a “Superbus,” designed by a team from Delft University of Technology in the Netherlands, and it carries 23 passengers at 150MPH. As each rider sits in sports-car comfort, this electric vehicle zips along its own special road through the desert of Dubai, transporting its lucky occupants at dizzying speeds in the utmost luxury.

The luxury goods market has been on an upward climb for many years. Apart from the setback caused by the 1997 Asian Financial Crisis, the industry has performed well, particularly in 2000. In that year, the world luxury goods market – which includes drinks, fashion, cosmetics, fragrances, watches, jewelry, luggage, handbags – was worth close to $170 billion and grew 7.9 percent. The largest sector in this category was luxury drinks, including premium whisky, Champagne, Cognac. This sector was the only one that suffered a decline in value (-0.9 percent). The watches and jewelry section showed the strongest performance, growing in value by 23.3 percent, while the clothing and accessories section grew 11.6 percent between 1996 and 2000, to $32.8 billion. North America is the largest regional market for luxury goods; unlike the modest 2.9 percent growth experienced by the Western European market, the North American market achieved growth of just under 10 percent. The largest ten markets for luxury goods account for 83 percent of overall sales, and include Japan, China, United States, Russia, Germany, Italy, France, United Kingdom, Brazil, Spain, and Switzerland.

Since the uprising of the ‘luxury brand’ in the 1800s, department stores dedicated to selling all major luxury brands have popped up in most major cities around the world. Le Bon Marche located in Paris, France is credited for being one of the first of its kind, but also Neiman Marcus, Selfridges, Lord & Taylor, Harvey Nichols, Saks Fifth Avenue, David Jones, KaDeWe, Harrods and Holt Renfrew are seen as some of the most influential and historical. Most big fashion houses & jewelers from Chanel to Tiffany & Co. have boutiques located inside these massive stores.


KaDeWe stands for “Kaufhaus Des Westens”

The three dominant trends in the global luxury goods market are globalization, consolidation, and diversification. Globalization is a result of the increased availability of these goods, additional luxury brands, and an increase in tourism. Consolidation involves the growth of big companies and ownership of brands across many segments of luxury products. Examples include LVMH, Richemont, and PPR, which dominate the market in areas ranging from luxury drinks to fashion and cosmetics. Leading global consumer companies, such as Procter & Gamble, are also attracted to the industry, due to the difficulty of making a profit in the mass consumer goods market.

In July 2010, the United States Department of Energy banned the sale of luxury showers that use more than 9.5 liters of water per minute.

In 2012, China surpassed Japan as the world’s largest luxury market. In February 2013, China banned advertisements for luxury goods on its official state radio and television channels.

Another phenomenon of the luxury market are “Luxury Shopping Avenues“. Certain thoroughfares like Leeds’ Victoria Quarter, Milan’s Via Monte Napoleone, Rome’s Via Condotti, Tokyo’s Ginza, Moscow’s Tverskaya Street, New York’s Madison Avenue and Fifth Avenue, Hong Kong’s Causeway Bay and Admiralty, Chicago’s Magnificent Mile, Beverly Hills’ Rodeo Drive, Paris’ Champs-Élysées, Avenue Montaigne and Rue du Faubourg Saint-Honoré, London’s Bond Street and Sloane Street, Mexico City’s Avenida Presidente Masaryk, São Paulo’s Rua Oscar Freire, Prague’s Pařížská, Toronto’s Bloor St., Düsseldorf’s Königsallee, Lisbon’s Avenida da Liberdade, Melbourne’s Collins Street, Singapore’s Orchard Road, Amsterdam’s P.C. Hooftstraat Athens’ Voukourestiou Street and Kolonaki district and Frankfurt’s Freßgass area are some places where most luxury brands tend to be concentrated.[citation needed] These retail districts concentrate luxury good stores that are managed by large corporations, while conventional and independent retailers are pushed out because of increasing rent and real estate prices.


If shopping is a sport, Causeway Bay is the Olympic Games. This is where consumerism is out and proud, and every available square inch is seemingly devoted to worshiping at the altar of retail. Even though a relatively compact area, it would still take at least an entire day to work your way through its endless shopping malls, department stores, boutiques and market stalls. Hong Kong dances to the beat of international trade. In the neon blur, advertising deluge and unabashed consumerism of Causeway Bay you can feel the city’s pulse like nowhere else. The rent in the shopping areas of Causeway Bay was ranked as the world’s most expensive for the second year in a row, after overtaking New York’s Fifth Avenue in 2012.

Luxury is in a direct relation of the so called wealth effect.
The wealth effect is an economic term, referring to an increase (decrease) in spending that accompanies an increase (decrease) in perceived wealth.The effect would cause changes in the amounts and distribution of consumer consumption caused by changes in consumer wealth. People should spend more when one of two things is true: when people actually are richer, objectively, or when people perceive themselves to be richer—for example, the assessed value of their home increases, or a stock they own goes up in price.
Demand for some goods (especially Inferior goods) typically decreases with increasing wealth. For example, consider consumption of cheap fast food versus steak. As someone becomes wealthier, their demand for cheap fast food is likely to decrease, and their demand for more expensive steak may increase. Consumption may be tied to relative wealth. Particularly when supply is highly inelastic—or in the case of monopoly—one’s ability to purchase a good may be highly related to one’s relative wealth in the economy. However, the effect is subject to an interesting contradiction: The wealth effect and the Paradox of Thrift are contradictory. The paradox assumes that people will spend when they feel wealthy, based on the wealth effect, but not when they are actually more wealthy. People need to believe to be loved and adored through wealth and luxury, and desire this over all.


Living in Tokyo, is a luxury. The city has unsurprisingly retained its title of the most expensive city in the world, according to ECA International’s latest cost of living survey. Food in Tokyo is about 35% higher than in New York and clothing is about 89% higher than in New York according to Expatistan. A Big Mac meal that costs about $6.47 in New York would cost about $8.18 in Tokyo. 1 kilogram (2.2 lbs) of apples that cost $3.18 in New York, cost about $8.15 in Tokyo.

The model of luxury once was aristocratic and artisanal. Even though labor costs were low, many products were rare, difficult to obtain, or produced only in limited quantities. A fashionable robe à la française, for example, might be made from yards of expensive silk brocade draped over side hoops, trimmed with handmade lace, and elaborately accessorized. For the most part, anonymous artisans produced luxury goods for an elite clientèle. There were, as yet, no luxury brands or “name” designers, although Rose Bertin was notorious as Marie Antoinette’s “Minister of Fashion.” One of our today’s “Fashion Ministers” for example, is Karl Lagerfeld.


Super high-end fashion: Karl Lagerfeld’s monochrome designs for Chanel Haute Couture (2009)

Haute couture, the luxury industry par excellence, emerged during the era of high capitalism in the 19th century. Great couturiers, such as Charles Frederick Worth, became recognized as “artists of luxury.” They also began to transform dressmaking from a small-scale craft to an international business. Mass-produced imitations of fashionable luxury items proliferated, as middle-class consumers emulated the buying habits of the newly rich. Women’s dress, in particular, became more ostentatious, leading Thorstein Veblen to coin the immortal phrase “conspicuous consumption.”


Jennifer Lopez

Jennifer Lopez American actress, singer, record producer, dancer, fashion designer and television producer.

Class distinctions were central to the phenomenon of luxury, but the feminization of luxury also became an issue. Wealthy men dressed their wives and mistresses lavishly, while adopting for themselves a relatively austere style. In the early 20th century, women also began to acquire a taste for elegant simplicity. The couturier Paul Poiret notoriously accused Coco Chanel of creating “poverty de luxe,” but her less-is-more design philosophy was in line with a wider movement toward modernism.

Global Luxury Goods Market

Global Luxury Goods Market: The luxury goods industry has had a rollercoaster decade, witnessing periods of unprecedented consumption and deep recession. Has the economic downturn stopped the appeal of luxury? Research by Euromonitor International suggests that the answer is “No”. Although worldwide sales of luxury goods have been hit, Western consumers are now taking small steps back into luxury, while economic growth in the BRIC nations is generating new and enthusiastic buyers of luxury brands.

The democratization of luxury has been an important marketing phenomenon for decades, hence the term “populuxe,” to describe popular luxuries of 1950s America, such as the Cadillac. But the idea of “marketing luxury to the masses” has received increasing attention in recent years. If luxury in the 1980s was about showing off, and luxury in the 1990s was more of a niche concept, many observers believe that today there exist two divergent ideas of luxury – the Old Luxury, which is rooted in tradition and craftsmanship, and the New Luxury, which is more style-driven and accessible.

London-based Earlcrown: an Old Luxury project management and design house

London-based Earlcrown: an Old Luxury project management and design house undertook the complete refurbishment of this elegant Grade II listed townhouse in Mayfair, one of London’s most exclusive areas.

Old Luxury tends to be associated with European elegance, inherited wealth and status, New Luxury with contemporary design and American marketing techniques. Many of the world’s most prestigious luxury brands have a long history. Hermès, for example, was founded in 1837, and Louis Vuitton in 1854. An Hermès handbag is not only a luxury item, it is also a status symbol. The famous H logo — like the LV monogram of Louis Vuitton, the double C’s of Chanel, and the double F’s of Fendi — functions like an artist’s signature, attesting to the authenticity of the product, and thus its value.


Counterfeits of famous luxury brands are an unwelcome testimony to their prestige among the general public. Moreover, awareness of a luxury fashion brand among affluent consumers is no guarantee that they will accord it high social status. The perceived value of a brand can drop if it appears to go “down-market,” and as designer labels become more widely available, they can lose the cachet of exclusivity. Logos may be losing their luster as the display of status becomes more complex. And more expensive.


Alejandro Diaz, “Happiness is Expensive”, 2008, neon, 17” x 34”

“I thought that the best things in life were free?” you might ask. Status and values are nowadays very strongly driven by shallow materialism and commodity fetishism. Globally we preference desires above needs. Below priorities in global spending, with the highest expenditure in the group being items like military and alcohol while aid to foreign countries for education and clean water are lower.

priorities - commodity fetishism

As Karl Marx called commodity fetishism in his major work, Das Kapital (1867), the quasi-religious relation to products that produce people of labor in production and social work for each other. A fetish can be attributed to properties or forces, which this does not possess by nature. Even in Marx’s time, the term “fetish ” is used primarily in connection with animistic religions. In his major work Das Kapital (Volume One, 1867) transmits Marx the fetish concept to phenomena of political economy: capitalism in the merchandise, money and eventually the capital attributed to properties that do not have this in truth would. As a result, would “the capitalist mode of production peculiar, and springs from their very nature fetishistic view which economic form determinations as goods to be to be productive work, etc., as the material carriers of this form determinations or categories and rightful for themselves property considered.”

The core idea is: Just as God, who, though a creature of human thought, its human creators dominated, appear the producers the goods produced by them as a fetish, even though they are only materializations of their work.
The money fetish and the capital fetish represent the logical further development of commodity fetishism.


“I love bling”  –  Bling (or bling-bling) is a slang term popularized in hip hop culture, referring to flashy, ostentatious or elaborate jewelry and ornamented accessories that are carried, worn or installed. In linguistics terms, bling is an ideophone intended to evoke the “sound” of light hitting silver, platinum, or diamonds. It is not an onomatopoeia, because the act of jewelry shining does not make a sound. While the specific term bling was first popularized in the hip hop community, it has spread beyond hip hop culture and into mass culture after the original Hot Boyz chart-topper “Bling-bling” became popular.

“Bling” owns absolute fetish quality and suggests glamorous, exquisite luxury.

Mercedes Benz diamond encrusted SL600

Mercedes Benz diamond encrusted SL600: Swarovski crystals and diamonds adorn this Mercedes Benz. For US$48 million, Saudi Arabian prince, Al-Waleed bin Talal decided to up the ante by customising his 38th car with diamonds. As if diamonds weren’t luxurious enough, prince Al-Waleed decided to add in Swarovski crystals. These gems cover everything from the body of the car to the logo, tailpipe and even the wheel rims. Al-Waleed is said to be charging US$1000 to anyone who wants to touch it as well.

Luxury is often thought of as “the best of the best” – the rarest, most expensive, and most desirable objects. But luxury is a social construction that is constantly being redefined. Mirrors, indoor plumbing, television, cashmere sweaters, and cell phones were once considered luxuries. In parts of the world, even today, clean drinking water remains a luxury. As living standards rise, more and more people around the globe desire and expect to obtain luxuries — objects and experiences that are nonessential, yet pleasurable and rich in meaning.

People want to feel a sense of identification with the brand’s “story.” They are also increasingly combining high-end customized fashion with accessible luxury. This high/low concept is epitomized by collaborations between mass chains like H&M and famous fashion designers. Today’s luxury has many faces – from material to experiential luxury, and from super-luxury to stealth luxury and secret pleasures.


Over all is the most important question: does luxury indeed own the ability to make us happy – or does it just cover our socially cultured inferiority feelings and socialized needs? Suzy Menkes for instance has defined luxury in terms of “three key elements: artistry, craftsmanship, and sensory pleasure.” She suggests that “modern luxury is not only about objects. Increasingly it is about experiences – about an aura of excellence surrounding the customer”.


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