The Psychology Behind Luxury Brands

Purchasing habits are often studied, whether it is for marketing reasons or for a desire to learn more about human behavior. It is often the case that the overall amount of goods purchased tends to fall dramatically during times of economic difficulties and recessions. However, somehow paradoxically, the number of luxury goods purchased is unlikely to suffer a blow even during the middle of an economic crisis. Sometimes countries in recession surprisingly experience a rise in the percentage of luxury goods bought, and this seemingly odd pattern can be explained by a number of different reasons, including psychological ones. In the same context, a question naturally arises: why do people buy luxury goods?

According to a paper published in the Journal of Consumer Psychology, an observation of the importance of ‘pride’ in consumer behavior is useful to understand the psychology behind luxury goods. The authors make a case for the coexistence of two separate facets of pride within the context of consumption: authentic but not hubristic pride and hubristic but not authentic pride. While the former causes a rise in the desire for luxury goods as owning them makes people feel good and more confident, the latter comes as a result of the purchases of luxury brands, and it is the form of pride signaled to other people when we, for example, wear expensive clothes. According to the authors of the paper, acknowledging the existence of these two facets of pride in consumption not only helps us better understand the reasons behind consumers’ choice to buy luxury goods, but also presents a paradox. In fact, they argue that while purchasing luxury goods might be the result of the search for heightened feelings of accomplishment and not arrogance, the latter is nevertheless what observers might perceive.

The idea that consumers purchase luxury goods because they make buyers feel good and increase their confidence is all but new, with research implying that the decision to buy luxury brands is mostly an emotional one. “Emotional spending,” which takes place when someone buys something out of a desire to improve their mood, is actually often thought of as a common reason behind all purchases, including those of luxury goods. The individual who carries out emotional spending often decides to buy luxury goods only to improve their self esteem or more in general to cope with stress. While purchasing luxury goods can be a positive and healthy thing someone can do to treat themselves, emotional spending can become a dangerous addiction if, for instance, people make purchases of luxury products well over their financial possibilities. In this regard, this research study interestingly suggests that people with lower income living in locations with relevant income inequality may be more willing to buy luxury goods in an attempt to “fit in” by giving the impression to outsiders that they have more economic resources than they actually do.

Some go on to argue that the broader market’s motivation behind purchases of luxury products is different than the motivation behind luxury purchases made by wealthier people. According to this theory, people belonging to the first category, who are less familiar with luxury, are motivated by the desire to enhance their perception of themselves through luxury goods, as these products increase their self-esteem and cause hedonistic feelings such as power. Wealthier luxury product consumers, whose lifestyle is strictly linked to luxury, are instead motivated by the desire to experience the emotions of trust and contentment evoked by the perception that these products are authentic and timeless, rather than just of good quality. This might explain why many people choose to purchase, for instance, a pair of shoes made by a luxury brand rather than opt for a well-made but less expensive pair of shoes made by a non-luxury brand. Additionally, it is now easier than ever to make purchases with almost every item being sold online. The idea of that luxury dress we have been wanting being just one click away tempts us even more.

While the causes behind an individual’s decision to buy luxury products vary, the emotional benefits one gets out of a luxury purchase often seem to be the main reason. So, in the search for an answer to the question “Why do people buy luxury goods?”, one thing seems clear: it is rarely about the practical perks of a luxury handbag, but much more about how owning something rare and expensive can make you feel.

– James Doh ’20

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