Luxury goods are instrumental to status signaling — our hope that people will recognize the insignia on a suitcase, or the stitching on a pair of jeans, and see us a certain way.

For the $262 billion luxury market, tapping into consumers’ fundamental need for respect or admiration from others is a very powerful tool. It’s no accident that a brand such as Audi invites you to “update your status” by buying its cars. Or that Aston Martin will bring “value to your life.” Other luxury brands encourage you to think about your status as an asset and speak to your desire to maintain your status as it is. Rolex reminds you, for instance, that class is forever.

For hundreds of years, the luxury, fashion, and high-end industries have used these techniques to attract buyers, tapping into people’s desire to be at the top of the hierarchy. Since political views are also shaped by our assumptions about hierarchies, we wondered whether these two things — political beliefs and preference for luxury goods — would go together.

To explore this, we conducted research around a simple but critical question: Does political ideology affect the preference for luxury goods, and if so, how?

According to our findings, just published in the Journal of Marketing, political allegiances systematically predict consumers’ desire for luxury consumption, particularly for conservatives. We attribute this to conservatives’ greater desire to preserve socioeconomic order and maintain existing social hierarchies.

Across a range of studies, including analyses of real-world data drawn from thousands of car buyers, we found that conservative shoppers are more likely to buy luxury goods when they believe the purchase will help them preserve — but not necessarily advance — their status.

In other words, conservatives don’t buy the Rolex or the Patek Philippe to advance their social standing, but rather out of a strong desire to maintain or conserve their social standing.

Studying Republicans and Democrats

We first aimed to establish a baseline link between political orientation and a greater or lesser desire for luxury goods.

We sifted actual car purchase data from 21,999 consumers in 50 U.S. states between October 2011 and September 2012. In addition to the car brand and model purchased, the data included car buyers’ political beliefs. (In this study, participants were asked to reveal their party identification; we limited our sample to people who chose either Republican or Democrat, and excluded people who chose Libertarian, Independent, and so on. In other studies, we used established surveys for assessing liberal or conservative orientation.) Finally, we also had information on their social status, which we measured as a joint product of their income and education.

Our analyses revealed a strong difference among high- but not low-status consumers. Republicans with high social status were 9.8% more likely than high-status Democrats to buy a luxury car. Put differently, while high-status Democrats spent $29,022 on average on their car, their similarly wealthy Republican counterparts spent $33,216. For luxury car sellers, that meant a median difference of a 14.45% increase in sales to conservative customers.

Working on the assumption that most people purchase luxury items to signal their social status to others, we further explored the difference between Republicans and Democrats. We wondered whether different political ideologies would unequally activate two distinct goals tied to the pursuit of status: the desire to maintain one’s status and the desire to advance their social standing vis-à-vis others. We predicted that because of conservatives’ proclivity for the status quo, they would desire luxury more when seeking status maintenance, but not status advancement. This would also explain why, among high-status consumers, Republicans purchased more luxury cars than Democrats.

To test this possibility, we randomly showed 403 participants (on Amazon’s Mechanical Turk survey platform) one of three advertisements for the same eyewear product as part of an online survey. The first ad careful avoided any status-related association: Eyewear for everyone. The second ad was a call to maintain their social status: Keep your status with status. And the third was an imperative to advance their social standing: Update your status with status. (A pre-test confirmed that each of these ads successfully activated the target status goal.)

Consistent with past work, across all participants the willingness to pay for the eyewear in the ad was greater in the status maintenance and the status advancement conditions than in the no-status positioning. Novel to our work, and unique to the group of Republicans, these consumers were much more drawn to the product emphasizing status maintenance than the one emphasizing status advancement or the one lacking status focus.

Building on these findings, we next asked another 300 participants how much they would be willing to pay for a set of luxury headphones, after collecting their political ideology and momentarily activating status maintenance or status advancement through a short writing task.

After status maintenance was momentarily activated, consumers who identified as strong conservatives were willing to pay, on average, $109.80 for the headphones. By comparison, the desire for the headphones was 83% lower after status advancement was activated among consumers with strong conservative beliefs, amounting to a willingness to pay of $59.90. As another comparison, consumers’ willingness to pay among consumers of weak conservative beliefs (that is, strongly Democrats), was just $65.10 — a stark difference of 65%, compared with the Republicans’ average of $109.80.

In other words, the dominant political ideology of the target market systematically affected consumers’ desire for luxury products, with consumers of strong conservative beliefs being much more responsive to luxury when their status-maintenance (but not status-advancement) goal had been activated.

Implications for Luxury Brand Management and Strategic Communication

These findings have implications for luxury brand management. Establishing a causal link between political ideology, status goals, and purchasing habits yields untapped opportunities to target, segment, and market luxury goods and services to novel types of consumer groups.

Our work not only sheds light on why conservatives might be more inclined to buy the watch, the sunglasses, the car, or even the condo, but also will help luxury brands to identify the channels, the positioning, and the messages to nudge these consumers more effectively along the customer journey.

Indeed, the political affiliation of a target group can easily be determined along geographical lines. We all know that Texas is more conservative than, say, Massachusetts, but brands can now go to a much more granular level in their segmentation strategies. There is a lot of fine-grained data readily accessible that enables brands to segment based on political ideology in databases from Gallup, Pew Research Center, and politicalmaps.org, among others.

It’s also easy to assess people’s political ideology from their digital footprints, such as search patterns, likes, or website visits, and from their preference for different media outlets and online platforms. Once luxury brands identified and located a relevant target, the focus becomes positioning one’s products and services accordingly.

In addition, marketers should pay attention to cues in the political or economic environment that might increase the desire to preserve status, particularly among conservative audiences. For instance, anxieties over the loss of global economic dominance in the U.S., or social threats associated with relinquishing one’s social group power or prestige in some way, can activate the status-maintenance impulse. External shocks like economic turbulence can also produce a surge in interest for conspicuous consumption, in particular beauty and appearance products — a phenomenon referred to as the lipstick effect. These findings suggest that the lipstick effect may be stronger among Republicans than Democrats.

In reality, connecting political ideology and the desire for luxury goods makes perfect sense — politics and the desire for status are both historical drivers of social stratification.

from HBR.org https://ift.tt/2vU7laj