Thursday, December 16, 2010

How Luxury Goods Affect the Brain And Drive More Purchases

Just in time for Christmas, a new neuromarketing study offers a boost for good ol' fashioned American capitalism: it turns out that buying expensive things that don't fit in with your current home decor or wardrobe leads to more shopping binges.

 

According to a study by Henrik Hagtvedt of Boston College and Vanessa Patrick of the University of Houston to be published in the Journal of Marketing Research, customers who purchase luxury items that don't blend in with either their wardrobe or their home tend not to return these products. Instead, they buy more--usually cheaper--products to complement their new acquisitions.

The cost more often than not exceeds that of the original purchase, creating a vicious cycle of consumption. Patrick and Hagtvedt term this ?aesthetic incongruity resolution.? We call it not being shamed by your classy, design-conscious friends.

It turns out consumers are subsceptible to, well, pretty things. Over three years, the 125 participants' spending habits for shoes, necklaces and furniture were tracked. Participants were given high-end products from either ?designer? labels or from luxury retailers that frequently clashed with their aesthetic tastes. After a period of time, subjects were offered the chance to return the products in exchange for money or to keep the product obtained through the study. (A scientific study that gives away luxury goods? Sweet!)

The vast majority of participants opted to keep the luxury goods instead of returning them--and also admitted to buying a slew of cheaper items to complement their luxury product. According to Patrick:

In talking to people, it turns out that this is a pretty common occurrence. We buy something we really like--after all what could be so wrong in purchasing a cute purple sweater or a unique little side table for the hallway? But, we take it home and that's when it happens?these items become really hard to give up.

So we buy more. And before we know it, we have purchased matching necklaces, shoes and bags, to go with the purple sweater or paintings, new wallpaper and new lighting to accommodate the unique side table.

Hagtvedt adds:

When we buy something with unique design elements and it doesn't fit, it frustrates us. This is because design has intrinsic value. So rather than returning the item, we actively seek ways to make the item fit, often by making complementary purchases. This has financial implications that may have been entirely unforeseen when the consumer made the initial purchase.

The science of neuromarketing asks simple questions via creative uses of technology and academic scrutiny: Why do people purchase items the way that they do? What is the psychology and the reasoning behind consumerism? And how can marketers take advantage of that? In recent years, neuromarketing projects have used MRI technology to understand women's snack food purchasing habits, subconscious reactions to mass-market consumer products and how certain car brands cause biological disgust reactions in some individuals.

For Patrick and Hagtvedt, the relevance of their study is in the ramifications for manufacturers, retailers and the entire U.S. economy. All it takes to spur purchases, it seems, is convincing someone with spending power to buy something that really does not fit in their house.

[Image of Henrik Hagtvedt courtesy Boston College]

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