If we told someone from 1994 that 31 years later, people would go into debt for a Hermès, queue overnight to buy another similar-looking phone like they already have in their pockets (only this time it is more expensive), or pay triple the amount for a pair of sneakers that provide the same level of comfort as Amazon shoes, they won’t believe us.
Because the purchase of luxury goods, and the psychology behind that, has turned into a warped, complex reality that is hard to understand and even harder to explain.
But one thing is guaranteed that the psychological play behind the purchase of outrageously expensive stuff is strong, because why else would a customer pass on one thing but purchase its clone for a hefty amount?
However, there is a catch.
Luxury nowadays isn’t as materialistic or superficial as we think it is.
If anything, it is emotional, deeply personal, and aspirational.
So many conflicts and arguments shape the final notion that we have of the psychology behind high-end lifestyle choices. Let’s break them down one by one;
Do Luxury Consumers See Their Purchases as Mere Products?
Ask a woman holding a Stanley what it is. 90% chances are that she would say, “It is a quncher.” She could have said that she is holding a water bottle or a Stanley. But she told us that this water bottle has a large capacity to hold drinks for extended periods of time. Hence, with a single word, ‘quencher,’ she vouched for the product. A customer only does so when they are proud of their purchase.
The youth, especially Gen Z and Millennials, feel a sense of responsibility towards the environment, their bodies, as well as other people. Hence, they would never purchase a product on the basis of how expensive it is. Rather, there must be a ‘meaning’ behind a luxury good, and only then you can convince them to purchase it.
In sum, luxury products these days mostly sell because they symbolise belonging, identity, accomplishment, and rebellion. Whenever a person buys a luxury product, they do so to satisfy or experience one of these feelings.
The 4 Cornerstones of “Why People Buy Luxury?”
Belonging; People purchase luxury goods to feel like they belong to a higher status. The sense of authenticity that develops when you want to belong somewhere is very strong. A fake Rolex might look exactly like the original, but it would never instil a sense of belonging in its owner that he would feel when he purchases a genuine luxury good.
Identity; Many luxury brands have a distinguished trait that imparts itself to its customers as well. Aman Tokyo, Amangiri, and Aman Venice aren’t just 5-star retreats. They are pure examples of respectable luxury. The leather luggage tags that they loop around the suitcases aren’t just an accessory – people collect them and proudly show them off to tell that they are one of the elite, Aman Junkies.
Accomplishment; Many people buy luxury because they want to experience a sense of accomplishment. A man in his 30s would work 40 hours a week for 5 years straight, just to afford a Cartier watch or a brand-new car. This urge to reward oneself is an evolving consumer preference, which has a ripple effect on the global Luxury Goods market, which is projected to reach US$369.8 billion by 2030.
Rebellion; Some brands use peer-to-peer marketing strategies to boost their sales. For example, many fashion experts think that Labubu – the designer toy – is a rebellion against traditional luxury norms. Others think that it is a symbol of capitalism and fast fashion. Whatever the case may be, Labubu’s gravitational pull should be noted – its social sharing, collector hype, and exclusive design are a masterclass on how to sell you luxury products by creating a rebellion.
The Darker Side of Luxury Consumers’ Psychology
The darker side, or we can say that the raw, human side of luxury psychology, is that when people are not able to afford a product, they yearn for it. This is why the average credit card spend in the UK reached £860 in December 2024, because even when people do not have the savings to purchase luxury goods, they buy them anyway just to prove that they stand in a certain social hierarchy.
The irrational choices and buying decisions are also influenced by collaborators, celebrities, and influencers, who create trendy aesthetics that prime people to focus on less pro-social thoughts, and more on self-interests.
So, in times like these, what sets a luxury brand apart from others is a deep understanding of its audience. If you know who your audience is, why they buy, and how to connect with them, you can build an ironclad brand affinity over time.
Conclusion
Luxury may seem to be irrational these days. But if you map out the undercurrent of consumer preferences, then you can evoke feelings of belonging, identity, accomplishment, and rebellion, which will take your brands to heights it has never reached before. If you want your brand to carry emotional resonance, do not be an impatient entrepreneur. Real consumer loyalty takes time, consistency, and patience.
Yes, sometimes, brands utilise peer-pressure, velvet-rope, and other strategies to attract customers, but as long as it makes them happy, and doesn’t hurt others, and the planet, why not? After all, luxury has always been a play on emotions and desires of humans.
