The other day, a friend and I were enjoying a sunny patio along Calgary's Stephen Avenue, a great place to watch people and notice trends. A brand-new, two-tone grey Hummer rolled along, glistening like it had just been washed and polished with a stack of Pampers. In the back window was a sign: FOR SALE.
"What a chump!" we thought. "That Hummer isn't a year old and the owner is already bailing." With gas at $1.36 a litre -- and carbon-spewing dual exhausts as socially acceptable as killing puppies -- demand for giant status vehicles is collapsing. As the unwanted vehicle lumbered away like a dinosaur in the Ice Age, we realized that we've reached a distinct economic tipping point.
We are now in the Post-Hummer Economy.
But even if giant SUVs disappear, the idea of luxury won't. For some of us, luxury is - or was - a Hummer. For others, it's vacations on sun-baked beaches, expensive Italian shoes or spa treatments.
And the idea of luxury isn't limited to the rich and famous. Wal-Mart does a good business selling trashy romance novels, inexpensive flat-screen TVs and pillow-sized bags of cheese puffs.
What will luxury look like in the post-Hummer economy?
One thing for certain is that luxury will continue to be influenced by price signals. Our Hummer chap is simply responding to expensive gasoline prices, not social pressure to be more Earth-friendly. As economists will tell you, price signals are enormously effective at shaping behaviour, much more so than public education campaigns or even Al Gore's award-winning films.
Hummer Boy will look for other less pricey luxuries through which he can reaffirm his alpha status. He may find a buyer for his Hummer and pick up a Lexus hybrid - something that still screams money but doesn't use as much gas. He may move to a swank downtown condo so he can walk to work, yet still impress the ladies.
For the rest of us, maybe luxury in the post-Hummer economy will be about the things we don't have. Ten years ago, cellphones were luxuries; if you had one, you were either wealthy or important (or both). Now every kid at the mall has one. So perhaps the new luxury will be to ditch your cellphone altogether. Maybe a hired personal assistant will be the new luxury. They won't be just for CEOs any more, and we simply won't know how we managed before we had one.
Or maybe luxury will be tailor-made clothes, and not just suits for awkwardly shaped men, but all kinds of clothes - jeans, casual shirts, sportswear. Since anyone willing to flip through racks at Winners can find Hugo Boss and Dior, maybe clothes that actually fit will be what sets one apart from the Lululemon pack. And they won't have labels at all.
Maybe luxury will come in what we manage not to be, like being busy.
Conversations all start the same way, the "How are you?" intro followed by the "Oh, it's been busy" rejoinder. Sadly, being really busy is a badge of honour in our adrenalin-pumped society. It conveys an air of importance. But maybe taking time to do nothing but sit and think will be the new luxury. When asked how you've been, you'll say: "Great. I sat around all day yesterday and read a book." People will envy your status. They will applaud the gracefulness of your extravagance.
Luxury will continue to be about indulgences and the messages we send to the world about who we are. But our economy is changing, and the notion of luxury will change right along with it. That will present all sorts of new opportunities for people to cash in on the new luxuries.
Todd Hirsch is a Calgary-based senior economist at ATB Financial. The opinions expressed above are Mr. Hirsch's own.