I feel like we must have different perceptions of the "average consumer." Nobody I know has any aspirations of spending several thousand dollars on a handbag.
Maybe it's different when you only talk to people who make at least six figures.
Actually, sadly enough, a big portion of the people who buy those bags (or similarly luxury items that have fine non-luxury equivalents) don’t have the money to.
Often, people buy these things because it makes them feel better, in that they feel they’ve earned the right to have something nice.
And that is one of the reasons that people tend to make decisions that don’t get them out of poverty. Because sometimes feeling spendy makes people happy, in the short term.
It’s why you see so many lower-middle class people driving around in a used/leased Lexus or BMW. It isn’t that a Ford or Mazda wouldn’t suffice.
Moreover, if you can get it for free, with points, that feel like they cost you nothing? Hell yeah.
(This is also why the Marlboro/Parliament catalogs which made people collect UPC codes for various items were so popular. Nobody needed that junk. But a duffel bag and a laptop for nothing but these random barcodes I’ve collected?! Hell yeah, I’m rich!)
Maybe it's different when you only talk to people who make at least six figures.