Opinion: The Big Luxury Simulation Is Over

In “Simulacra and Simulation” (1981), the late French philosopher Jean Baudrillard posited that we no longer live in a directly experienced reality, but in a “hyperreality”: a world so heavily mediated by images that they are more powerful in shaping the way we live our daily lives than the real world.

Four decades later, anyone on Instagram understands this intuitively. Our decisions — from what we buy to who we befriend — are shaped by imagery.

In the luxury industry, an object’s symbolic value was always more important than its material value. But the age of the hyperreal pushed this logic to an extreme.

Whereas luxury once meant beautifully crafted objects, it became about storytelling. Instead of luxury goods, brands retooled to deliver luxury narratives. And as long as their products signalled luxury, they realised they could cut corners on quality to boost margins and meet growing demand without alienating shoppers.

This strategy has proved stunningly successful, especially with people who grew up in a world of simulacra, conditioned to consume markers of goods more than the goods themselves. As Dana Thomas noted in “Deluxe: How Luxury Lost Its Luster” (2007), “Consumers don’t buy luxury branded items for what they are, but for what they represent.” On social media as in the street, what mattered were symbols of luxury.

But fast-forward to the present and it appears this logic has its limits.

That the post-Covid luxury boom has given way to a sharp downturn in demand is not simply a reflection of macroeconomic pressures. A combination of soaring prices and declining quality has left many consumers feeling their intelligence is being insulted, which suggests symbols of luxury still need to be anchored in tangible value to command steep sums.

Last year, when Dior was taken to task for the use of a sweatshop labour in its supply chain, Italian prosecutors alleged the brand paid little more than €50 euros a piece for bags which retailed for more than €2500 each. Now LVMH stablemate Loro Piana has been pulled up by the same probe. Such stories make the luxury industry look like a scam selling empty signifiers to suckers.

It’s no surprise that sales of superfakes — low-cost, high-fidelity replicas mostly made in China and sold directly to customers via WhatsApp groups and social media — have rocketed, driven by a new attitude to counterfeits. Whereas owning a fake once came with a sense of shame, now it’s seen as a savvy move. Why risk feeling stupid for buying subpar, overpriced goods, when you can game the system?

It’s not that people no longer want the symbols of luxury. But those symbols have to be grounded in great product to be believable. And if the entire luxury industry has become a simulacrum, where the symbol is hollow, there is little difference between the real and its copy.

It’s well known what one gets when one buys a superfake. It’s more interesting to consider what one doesn’t get: provenance. But if few customers seem to care, it’s because luxury’s narratives of origin and superior craftsmanship no longer seem credible.

We have reached the last stop on the simulacrum express. Can the industry find its way back to the land of the real? Making actual luxury goods and not just telling stories about making luxury goods would be a good place to start.

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