As in the ’30s, high-end brands are playing down bling and playing up value.

The brands refuse to admit this, but they are all looking at tweaking not just the message but also the product, considering where they can lose the buckles, zipper, or extra pleat or where they can switch from alpaca to cashmere. They are looking to sell their less-costly diffusion lines, their D&G instead of Dolce, their DKNY instead of Donna Karan, to make up for some of that vanished higher-end revenue. "For sure, the consumer is going to be more picky here," says Mimma Viglezio of Gucci. "You're not going to see it in our product, of course, but some companies are going to try to focus on value, on bargains."

The larger question is whether consumers are just shell-shocked and will really return to the front lines of luxury retailing or if consumer behavior has fundamentally changed. It is unlikely that we have reversed the trends of capitalism, that Thorstein Veblen's "invidious comparison" no longer applies. But what if the status we seek, the expression we hope to make through our purchases, has fundamentally shifted? That is the view of some in the luxury business, that a large swath of the luxury consumer is not merely skittish but gone—financially unable to purchase or, having traded down to a more moderately priced good, found the drop-off in quality to be negligible. How, then, do you convince the affluent consumer to stay loyal to the premium brands? "With these luxury brands," says Thomas Frank, "what they have been selling is the lifestyle and mystique of the brand. They have to find a new way to make that proposition enticing. ... The question is, can they market themselves as something else?"

Michael Silverstein of the Boston Consulting Group believes that luxury brands traditionally have competed on three dimensions—technology, function, and emotion—and says that the battle is now shifting more toward technology and function, away from Frank's "lifestyle and mystique." "The best companies, Silverstein explains, "are investing in technical and functional capability."

BMW is certainly making that investment. Jack Pitney, the head of global marketing for BMW, which has actually expanded market share since the financial crisis began, talks about BMW being a technology and environmentally friendly company—while reminding that the BMW is still the "ultimate driving machine." The company's response to the current crisis consists of both that message and, eventually, new products reflecting that message. Pitney is emphatic that the BMW culture of high-technology and fuel efficiency-especially a new generation of high-performance diesel engines—will drive away yesterday's notion of BMW as a status symbol and vehicle of choice for certain type of aspiring alpha-male. "Brands that have substance and integrity and that are authentic and recognize what has brought them the success and don't deviate from that will weather any economic recession best," Pitney says. "What luxury products do need to do in the short term is to allow customers to rationalize their making that investment in a premium product. You need to make them feel good about the fact that they've gotten value, that it's a smart buy."

Yet the challenge BMW faces in getting its message up to date is exemplified by where Pitney is laying out his vision. We are back in that time warp of yesterday's marketing plan, looking suddenly and painfully obsolete. Pitney is in Los Angeles to host a launch party for the new BMW 7 series amid an exhibit of BMW art cars, various makes and models painted by artists ranging from Warhol to Peter Max. Pitney stands, cocktail in hand, in the entrance foyer of the L.A. County Museum while bow-tied waiters serve from trays of lamb meatballs and mini-burgers and guys wearing shirts opened one button too many chat up women who seem to have opted for one cup size too large. It is hard to take seriously a brand's commitment to technology and the environment when it is delivered while Joan Collins and Dennis Hopper exchange air kisses in the background.

Luxury will survive, as surely as there will always be wealthy folks and those who aspire to look like them. We are a nation of would-be predators, and some portion of us will always revel in conspicuous consumption.