I was brought up in a typically thrifty household with the values that said you shouldn’t waste money on fancy packaging. My father would always say, “Don’t buy that one, it’s just a fancy brand name or expensive marketing,” or “You’re paying for the advertising if you buy that one, just buy this one.”
Now, I think that advice made very good sense. I think it particularly made sense for the generation brought up in the war who were much, much less affluent than society is generally today. But how relevant is that advice? How stupid are people who blow a thousand pounds on a handbag or hundreds of pounds on a fancy pair of jeans or pair of shoes? Well, I’ve decided I’m someone who just does not judge people who buy expensive or luxury goods as people who are wasting their money.
They may be wasting it, but they may not be. You see, once you're in a world where we’ve more than satisfied our basic needs of health and education, and shelter and clothing and food and water, isn’t everything a little bit of a waste of money? It’s all really about the packaging rather than about the functionality of the product. Who’s to say that it’s worse to buy a thousand pound handbag than to buy a thousand pounds worth of biscuits more than the biscuits that you need to eat over the course of five years? Who’s to say that a car that looks nice is the silly one to buy rather than taking public transport rather than buying any normal car? No, I think when you buy a luxury good, you're buying two things; you're buying a functional product and you're buying a piece of magic.
Now, that magic is never going to come cheap. Indeed, it wouldn’t be magic if it was cheap because part of the magic is very much embodied in the price itself. You have to separate it into those two products, and when you do that your understanding, I think, of the luxury goods business tends to improve.
That’s my view, but you can join the debate with the Open University.