The retail world is full of choices – and a vast range of them, at that. There’s the market for Primark – and then there’s the market for Versace. Chanel or Britney Spears. Clarks or Louboutin. You get the picture. Luxury items come at a cost, but increasingly these days we are seeing these costs being taken on by shoppers who can’t afford them.
There are some who buy luxury items at the drop of a hat. Which is all well and good if you have a very well renumerated job, or substantial savings or a wealthy family behind you. But plenty of these people don’t have any of these and choosing to buy these high-end products is a decision which doesn’t make financial sense, or any sense at all. In fact, it’s a bad decision with negative consequences, so why do they do it?
The lure of luxury is perfectly understandable (just check out these beautiful mens business suits from UK designer Alexandra Wood). The soft buttery leather, superior craftsmanship, the rich quality, the obvious logo, proclaiming its expensive status without the owner having to do or say anything – sure, all of these are good. But there’s one very off-putting thing and that’s the price tag. Would you prefer poverty or debt? What’s your poison? There are plenty of reasons to refrain and not least that it can create a huge amount of financial pressure and put you in a tight spot from which there’s no easy way out. But time and again, customers purchase the luxury they want – even if it’s courtesy of a credit card.
Rationale.
Consumers simply do not act rationally all of the time. No-one does. Psychological studies have proved that. A perfect example is the amount of people who buy things they can’t afford, even if it means increasing their personal debt and usually ending up with large amounts of it. That suggests that people don’t always act in their own best financial interests. It’s a decision that doesn’t make sense – but it is understandable. The simple equation is that people automatically assume that more expensive products are much better quality. Cheaper products are seen as inferior just because they aren’t a luxury brand and the latter is seen as higher quality.
But the psychology behind spending money is about far more than wanting the best quality apron, for example. Repeated studies have shown that by buying luxury items, consumers are able to transport themselves to a place of higher self-esteem, they get a sense of belonging to an exclusive club, they might even feel that they’ve accomplished something by spending thousands on a new handbag. They can get comparable, cheaper products – but they don’t want to, even though they will have the same function and the same relative quality. They over-emphasise the positives and ignore the disadvantages. Take Apple products, for example. Apple have a huge share of the smartphone market, they are seen as the ‘best’ brand with a huge following – but their products aren’t better in superiority or technology. A case in point is Samsung. They make better phones and generally have a lower price point, but Apple is retaining its share of the market because of customer brand loyalty.
Self-esteem.
As touched on above, shoppers feel better about themselves if they can buy more expensive things. It’s as simple as that. It gives them a sense of belonging where there might be insecurity. It reinforces their sense of self in a way that isn’t possible elsewhere.
Accomplishment
Consumers are rewarding themselves with things they cannot afford, like finding the best place to find a Chanel handbag. It’s upside down logic, but in those moments leading up to the purchase, the browsing and the choosing, consumers are ‘lifted’, it’s like a different life, but the high only lasts so long and then the need to buy more luxury items resurfaces.
Authenticity
Now this is the big draw. The feelings towards or sentimentality of, buying the expensive item means that replicas just don’t have the same effect. Which is why most people prioritise new items over second hand, they’re seen as a ‘lesser’ purchase. The memory, or feeling, of having bought genuine, luxury goods is something beyond compare. There’s a sense among shoppers that if you have to buy the ‘lesser’, the replica item, then you may as well not bother, that it won’t mean anything. Purely by virtue of the fact that it doesn’t cost as much money.
In conclusion.
The psychology behind buying expensive items is relatively straightforward to understand – luxury is attractive and for those who can afford it, that’s all well and good. The more bemusing psychological aspect is why people who cannot afford hundreds of pounds on a pair of shoes, buy them anyway. Apparently the short-term boost to self-esteem, the momentary sense of accomplishment and belonging is enough to outweigh the longer term problem of accumulating debt.
