How political ideology shapes luxury spending

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Conservatives are more likely to buy luxury when they think it can help them maintain their social position.

Luxury products. Why do we buy them?

In large part to signal our status to others. And for the 262 billion euros luxury market, tapping into consumers’ basic need to respect or admire others has always been the rule of the game.

For hundreds of years, the luxury, fashion and high-end industries have played a big role in the stratification of society by producing goods reserved for the elite. Psychologically, political ideologies shape our views on stratification and status – from how we see others lower or higher in the hierarchy to how resources should be distributed. Given the role of political ideology in shaping consumers’ beliefs about hierarchies, we questioned whether it might also affect consumption that is intimately linked to status.

To explore this possibility, our research asked a simple but crucial question: Does political ideology affect preference for luxury goods, and if so, how?

Our discoveries, just appeared in the Marketing Journal, show that political allegiances consistently predict consumers’ desire for luxury items, especially conservatives. We start from the idea that consumers’ need for status is two-sided, involving a desire to advance or maintain status. This critical distinction is reflected in many advertisements in the luxury and fashion industries which appeal to one or the other more (see Figures 1 and 2).

Figure 1: Announcements suggesting maintenance of condition

From left to right: 1. The generation of Patek Philippe a d; 2. Damac’s summer surprises a d, 2012; 3. Rolex class is eternal a d.

Figure 2: Announcements suggesting status advancement

From left to right: 1. A d for “Fashionable luxury fabrics”; 2. Aston Martin One-77 a d, 2008; 3. A d created by Lowe, Canada, for Audi, 2012.

Given the tendency of conservatives to preserve the socio-economic order and aversion to change in the social hierarchy, we reasoned and found empirically that conservative buyers are more likely to buy when they believe the buying will help them preserve – but not necessarily advance – their status.

Studying Republicans and Democrats

One of our first experiments aimed to establish the link between the political trend and luxury consumption. This involved analysis of car purchase data from 21,999 consumers in 50 US states and the District of Columbia between October 2011 and September 2012. The data included car make and model, political trends. buyers and their social status.

Republicans with high social status, as measured by income and education, were 9.8% more likely than high-status Democrats to buy a luxury car. In other words, while senior Democrats spent an average of US $ 29,022 on their cars, their Republican counterparts spent $ 33,216. For luxury car salespeople, that meant conservative customers were associated with spending that was 14.45% higher.

The Conservatives’ attachment to luxury products could be explained by a desire to protect their position, that is to say to maintain their status. So, we expected Republicans to respond more positively than Democrats to luxury ads highlighting how a target product would help them maintain their position. We also predicted that there would be little difference between Republicans and Democrats presented with luxury advertising emphasizing status advancement.

We showed 403 participants one of three advertisements for the same eyewear product in an online survey (see Figure 3). We measured their willingness to pay and checked their political inclinations. The first announcement was designed to evoke a desire for status advancement (“update your status”), the second to maintain it (“keep your status”) and the third avoided any status association (“glasses for all “).

Figure 3: Announcements suggesting status advancement (left), status maintenance (middle) or no status association (right)

As expected, the willingness of Republican participants to pay for the glasses in the ad that emphasized maintaining status exceeded that of Democrats, but not in status advancement and the status-free positioning conditions.

Based on these results, we then asked another 300 participants how much they would be willing to pay for a luxury headset after momentarily activating their desire to maintain or advance status through a short task of writing. We have also collected information on their political affiliation.

Consumers with strong conservative beliefs were willing to pay an average of $ 109.80 for the headphones when status maintenance was enabled. In comparison, that amount was 83% ($ 59.90) lower when Status Advancement was enabled among consumers with strong Conservative beliefs. Democrats on condition of continued status were only willing to pay $ 65.10 – a marked difference of 69% from the Republicans’ average of $ 109.80.

At this point, a reasonable question is whether and when liberals (Democrats) can buy luxury. While we haven’t found any differences in the likelihood of buying luxury when aiming to advance status, there are other reasons specific to Democrats that may underlie their desire for luxury.

In fact, in a recent paper in the Journal of Consumer Research, Nailya Ordabayeva (Boston College) and Daniel Fernandes (Católica-Lisbon School of Business and Economics) found that liberals tend to differentiate themselves with products that signal their uniqueness (horizontal signage).

Implications for luxury brand management

Overall, these results provide valuable insight into effective segmentation and targeting strategies for luxury and fashion brands. Indeed, establishing a causal link between political ideology, status goals and purchasing habits offers untapped opportunities to target, segment and market luxury products and services to new types of groups. of consumers.

Our work doesn’t just shed light on why Republicans might be more inclined to buy luxury watches, sunglasses, cars, or even condos. It can also help luxury brands identify the channels, positioning, and messaging that can help these consumers more effectively along the customer journey.

The political affiliation of a target group can be easily determined along geographic lines. Databases Gallup, Pew Research Center and Cartespolitiques.org, among others, provide access to detailed data allowing segmentation based on political ideology.

It is also easy to gauge people’s political ideology from their digital footprints such as their search patterns, likes or website visits, and their preference for different online media and platforms. Once luxury brands have identified and located a relevant target, they can focus on positioning their products and services accordingly and craft messages that highlight how they can help customers maintain their status ( see Figure 4).

Figure 4: Decision guidelines for luxury brand managers

Additionally, changes in political or economic environments may lead to the desire to preserve status, especially among a conservative audience. For example, concerns over the loss of global economic dominance or social threats associated with relinquishing power or prestige associated with one’s social group can help activate the impulse to maintain status – and radically alter behavior. of luxury consumers.

David Dubois is an associate professor of marketing at INSEAD. He co-directs the Leading Digital Marketing Strategy Program at school.

Jeehye Christine Kim is an Assistant Professor of Marketing at the Hong Kong UST Business School.

Brian Park is Assistant Professor of Management Science at the J. Mack Robinson College of Business at Georgia State University.

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