The luxury ‘iceberg’: how research should focus on what’s below the surface when buying ‘luxury’
What we define as ‘luxury’ can differ so much from person to person, let alone across markets and cultures. We’ve discussed this at length in the Kadence Insight team and rarely heard the same definition twice! So with that in mind, we shouldn’t lose sight of the fact that the reasons why consumers buy ‘luxury’ must be equally diverse, and that has implications for the research we do.
Here at Kadence it makes our work much more interesting, as we can delve further into the context, motivations and emotions behind decisions on luxury purchases. Not only that, but we should also consider the principles of disciplines like behavioural economics, to understand why decisions to buy ‘luxury’ may not have a straightforward, rational (or universal) explanation.
Where can we explore ‘luxury’ in research? It’s now about both products and experiences
When we think about ‘rational’ motives to buying luxury, we might have once expected consumers to favour high-value products as investments which can hold their value (to differing degrees, of course). Compare that to an ‘experience’, which holds one-time value and arguably only ever-lingering memories afterwards. And yet we’ve seen preferences shifting towards experiential luxury, from extravagant holiday retreats to dining experiences or exhilarating sports. These experiences can offer greater happiness, with more emotional benefits which last longer after the event, versus the emotions when buying a new product [REF: Wallman (Stuffocation: Living More with Less)].
What does this mean for our research? The subjective nature and value of luxury suggests we need to think more widely about how luxury feeds into research – not just for high-value items we’d traditionally consider to be ‘luxury’. Experiences or services can all have perceived ‘luxury’ to differing degrees, and the emotions behind this can be explored at all stages of the purchase journey.
Do we thrive more on the anticipation than the purchase?
As well as a growing preference for experiences, we’ve also seen the anticipation before buying an experience can drive more happiness than before buying a product, and this happiness can last longer post-purchase as experiences may be less comparable than products, or are shared with our social circles (‘Waiting for Merlot’; Kumar, Thomas & Killingsworth, 2014).
What does this mean for our research? It means we can also focus our attentions earlier in the customer journey to explore the emotions and attitudes before luxury purchases, not just at or after the event. This can give a clearer picture of the journey towards luxury, and the key milestones in this journey.
What else drives consumers towards a luxury purchase?
We should also consider other subtle, and often less ‘rational’ motivations underlying luxury purchases. For some it may offer a boost in self-esteem to reflect a sense of self they want to portray, while for others it can reinforce their identity and values. We can look for ‘heuristics’, or rules of thumb which simplify decision-making, which can play a role. Consumers may ‘prime’ themselves that luxury brands have superior performance to more mainstream brands, or ‘anchor’ their price expectations to similarly high-value items, to justify their value.
What does this mean for our research? Luxury buyers will always differ in their attitudes, motivations or beliefs about what their purchases will convey about themselves. So we should consider the context behind every decision, particularly on a global scale – the role of luxury may now be less a status symbol in the UK than in India, while in China the perceived quality may justify the price [(REF: https://theconversation.com/consumers-in-asia-buy-luxuries-for-different-reasons-to-the-west-45069]. So with such a diversity to luxury, research should explore this with an individual, curious lens to really unpick the context, motivations and emotions behind purchase decisions.