The Psychology Behind Why People Buy Luxury Goods

Many people treat luxury goods as an aim in their life- something they want to achieve. This feeling of accomplishment is very common. The charm that a luxury handbag may have is undeniable, the soft leather, rich logo and smooth features, the price tag can be put off many people.

Unless you’ve got a wallet full of money, a well-paid job or have developed fantastic personal savings habits, buying any sort of luxury item can burn a hole in your pocket or create a credit card balance that isn't easy to pay off.

Irrational Behaviour of Consumer

Consumer Behavioius remains one of the most research topics of all time, and this is because consumers don’t behave rationally at all times. A perfectly rational consumer would take decisions based on pure logic and think of his best interests.

But, psychologists have found, through studies that humans don’t act rationally. Their decisions are influenced by factors like emotions as well as logic. Many consumers who purchase luxury goods are not financially capable of owning such goods. Americans are one of the highest consumers of designer wear and also have the highest consumer debt. This phenomenon stands as proof of how many Americans don’t always act in their best financial interest.

If you’re looking for a durable, high-quality bag, you’ll find a range of those in the market for let’s say, $100. But yet, some people want to spend thousands of dollars on a luxury-brand handbag that performs the same function and is of the same relative quality.

Higher Priced Goods ≠ Better Quality Goods

Humans tend to focus more on the positive elements of a product and ignore their disadvantages. For example, people wait overnight for Apple to release its latest product- whether an iPhone or a Mac or even Airpods. As the price for their products keeps on rising, the accessories from Apple’s side keeps on reducing. Even though people are aware of these facts, they yet fawn over Apple products even though they are not technologically unique or superior.

On the other hand, other companies are known to make products a hundred times cheaper as well as more functional and with better features than Apple. Nevertheless, the sales of Apple keeps on increasing year after year due to its brand loyal consumers.

Many people have the idea that the reason these goods are cheaper is because they are of inferior quality. Hence, it becomes a mindset that higher-priced luxury products will be of better quality. Even when there is evidence, people tend to believe that you get what you pay for. Hence, whether the goods are better or worse or affordable, it becomes pointless.

Purchase Influenced by Self-Esteem

When a person faces low self-esteem, they look for acceptance in the form of materialistic goods that look good and garner attention. This takes place, especially when one can’t afford the cost of luxury items. In such cases, luxury goods help them in providing a sense of belonging.

One can also credit the one-click-away shopping- online shopping for the rise in this phenomenon. Your $500 shoes or scarf is just a click away—the internet how now made impulsive shopping or retail-therapy so much easier, good for brands.

As said before, they achieve a sense of accomplishment after purchasing such luxurious goods. Some may want to reward themself after working hard on something and hence consider it as a treat for themself wherein; they can indulge in. This is done by treating themself to something that otherwise, they could not afford.

Authenticity Matters

Suppose people get fake luxury goods for the same price as original even. In that case, they won’t buy it (even if they look identical). This is because they subconsciously know that they don’t own an original luxury good.

This won’t seem rational, right? If you’re buying luxury goods for the sole purpose of showing off to others and to get a feeling of belonging, then why won’t we feel happy or satisfied with the fake?

This is because right from childhood, we’ve been accustomed to this setting. Even if someone got you your favourite toy which looks identical to the one you own, you wouldn’t take the new. This is so because you think the second one is a duplicate. Your sentiments or memory is attached to the first one, and hence, just like toys, your feelings are attached to a genuine luxury good- this is why we always seek authenticity.

In other words, for some people, treating yourself to a pair of fake Christian Louboutin brand boots would be the same thing as having not treated yourself at all.

Conclusion

People have several reasons to buy luxury goods. All these reasons have something to do with our emotions and the memories we attach to these overpriced luxury goods. Whether or not you have the financial position to buy them, you may decide to buy it just to see how will you feel if you do own it. Hence, you’ll buy luxury goods for reasons like accomplishment from hard work—or to gain acceptance from others.