The Psychology of Consumption: One Consumer, Many Faces » Fox Communications

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Fox Quarterly Spring 2024

The Psychology of Consumption: One Consumer, Many Faces

How to make an impact with the luxury customer? Ensure every moment feels personal, says Dr Paul Russell.

As a consumer behaviour psychologist, it fascinates me how often luxury brands miss a simple yet pivotal insight: those consumers buying a luxury car, a designer handbag or staying at a five-star hotel are often the same person. This fact blurs the lines we tend to draw between luxury sectors, revealing that we are essentially looking at a single group of consumers who shift their expectations based on the luxury situation they are in at that particular moment. They’re not changing – but their expectations are, depending on which luxury sector they are engaging with.

Then there’s the confusion between luxury consumers and high-net-worth individuals. Most of the time, these terms are thrown around as if they were interchangeable, but they’re really not. High net worth indicates a financial status, categorised into four distinct levels. But being a luxury consumer? That’s about how much you value the experience and feelings tied to luxury, not how much you’ve got in the bank. This opens up the luxury world to a broader audience, all united by a love for the best craftmanship and the most memorable experiences, regardless of their wealth.

A woman in a dark coat stands on a sidewalk, contemplatively looking at a handbag in a warmly-lit luxury store window display, with a lone tree adding a touch of greenery to the urban scene.
Luxury welcomes all who appreciate craftsmanship and unforgettable moments. Credit: Kate Trifo.

Subjectivity of Luxury Experience

Digging deeper, the way we see wealth and luxury consumption gets even more interesting. Whether it is someone just starting their career contemplating their first luxury purchase or someone whose family has been wealthy for generations, these two customers are pretty similar, psychologically and in their buying behaviour. What sets them apart is their bank balance and their experience interacting with luxury. Certainly, the fledgling luxury consumer may be more difficult to sell to, but that’s because they have more to lose. That £5,000 watch or £1,000 coat is a much larger chunk of their net worth than it is for the wealthier client. They need reassurance, not judgement.

Luxury is personal and its subjective nature further complicates this landscape, with personal values, past experiences and cultural backgrounds heavily influencing what constitutes a luxury experience for a consumer. This subjectivity plays a critical role in shaping consumer expectations across different luxury sectors.

A classic and modern luxury side by side: vintage mercedes convertible meets contemporary bentley sedan in a sleek showroom.
The Luxury Cars market worldwide is projected to grow by 1.66% (2024-2028).

When we talk about setting luxury expectations, it involves understanding and meeting the varied demands of these consumers. The behavioural patterns of luxury consumers are dynamic, changing significantly across different luxury contexts; the same person might be looking for something entirely different from their hotel stay to what they expect when they walk into a luxury department store.

These behavioural patterns shift significantly across different luxury contexts. The person who wants every detail of their hotel to be perfect is the same one who loves the unique finds in a designer boutique and who treasures a custom piece made right in front of them in a Bedouin tent in the desert. The cost might be the same, but the expectations of each experience couldn’t be further apart, showcasing the varied tastes in luxury consumption.

Key to Connection: Understanding Consumer Psychology

Understanding the psychology behind these shifting expectations is key. This is what allows luxury brands to truly connect with their consumers, ensuring every interaction hits the mark, no matter the sector.

Ultimately, navigating the luxury market is about moving with the same people through different experiences, each with its own set of expectations. Getting this right by making sure each luxury moment feels personal is what creates unforgettable experiences. And let’s not forget, the young enthusiast buying their first luxury watch and the seasoned collector buying their 20th are the same person; the difference is just a couple of decades and the first impression your brand makes.

Dr. Paul Russell is a consumer behaviour psychologist and the managing director of the Luxury Academy.

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