1540s, "open to view, catching the eye," from Latin conspicuus "visible, open to view; attracting attention, striking," from conspicere "to look at, observe, see, notice," from assimilated form of com-, here probably an intensive prefix (see com-), + specere "to look at" (from PIE root *spek- "to observe").
Meaning "obvious to the mind, forcing itself upon the attention" is from 1610s; hence "eminent, notable, distinguished." Related: Conspicuously; conspicuousness. Phrase conspicuous by its absence (1859) is said to be from Tacitus ("Annals" iii.76), in a passage about certain images: "sed præfulgebant ... eo ipso quod effigies eorum non visebantur."
Conspicuous consumption "expenditure on a lavish scale to enhance prestige" is attested by 1895 in published writing of Norwegian-American economist and sociologist Thorstein Vebeln, made famous in his "The Theory of the Leisure Class" (1899).
Not only must wealth be possessed, but there must be a show of its possession. It must be made obvious to all that there is an inexhaustible reserve. Hence leisure must be made conspicuous by "conspicuous consumption" and "conspicuous waste." If only enough persons and the right persons could see it and know it, it would be highly honorific to light a cigar occasionally with a thousand-dollar bill. A man must not limit his consumption to himself and his family. He must live in a palace many times larger than he can possibly fill, and have a large retinue of servants and retainers, ostensibly to minister to his wants, but really to make clear his ability to pay. [Lester F. Ward, review of "Theory of the Leisure Class" in The American Journal of Sociology, May 1900]