If you’ve ever spent time scrolling through Instagram pages, then you have probably come across a variety of posts about luxury products and services. Sometimes it seems like everyone else is independently wealthy, or the recipients of a billion-dollar trust fund when it comes to buying luxury handbags.
There are a variety of reasons why people prefer luxury items over other options – sometimes that appeal is obvious. For example, some consumers will say that they prefer the luxury handbag because the quality is higher, and the leather looks better. For others, it’s a matter of “slow” fashion versus “fast” fashion. However, there’s still a lingering question about the appeal of luxury products and services, especially as it relates to purchasing items that are a bit costlier than your budget can comfortably accommodate.
There’s no doubt that luxury items can serve as a good investment. Quite frankly, sometimes a luxury purchase is just a matter of seizing the day, recognizing that you only live once. Whether it’s a pair of red bottom shoes or a luxury yacht charter, it’s perfectly fine to treat yourself, periodically. But what about purchasing those items when you still have bills to pay?
The amount of consumer debt that Americans have is growing because financial decisions made are not always rational. For instance, if a good quality pair of non-designer shoes can be purchased at a fraction of the price for designer shoes, is it considered an irrational decision to purchase the designer shoes if you have the money? The answer can be both yes and no. Consumers have always wanted to purchase the best product on the market – it’s something that will probably never change. Depending on the amount of joy that’s derived from the purchase versus the level of difficulty that it might create for you financially, the purchase could very well be worth every cent.
But what about a product that has a clear disadvantage, yet is purchased more than another item because it’s the latest trend? This is something that happens all of the time in the world of technology. Consumers tend to overlook flaws in order to be part of the in crowd. This is a phenomenon that happens across demographics. Another component is the influence of retail marketing and how much of an impact it has on the purchase decisions that are made every day.
Interestingly, some people automatically assume that higher priced goods are of better quality than lower-priced goods, when that is not always the case. As opposed to investigating the quality of an item, there is often an assumption that “you get what you pay for.” There have been studies that found this perception to be inaccurate, because sometimes a better-quality item has a lower price.
There are also studies on consumer behavior that have concluded that luxury goods are often tied to the self-esteem of the people who buy them. It some cases, it can cause a person to feel like they belong to a certain group or class of people, regardless of their income bracket. In short, the decision to buy luxury goods is often based on the perceived value and social status, instead of the actual quality.