BENTLEY UNIVERSITY, WALTHAM, MA, USA
Introduction
By definition, luxury has value due to a perception of scarcity (Kapferer, 2015) and the prestigious sign-value (Baudrillard, 1998) it elicits. As Shukla (2011) delineates, luxury products are “conducive to pleasure and comfort, are difficult to obtain, and bring the owner esteem, apart from functional utility” (p. 243). They are products that allow consumers to capture their dreams and that hold psychological benefits such as social recognition and self-esteem (Chandon, Laurent, & Valette-Florence, 2016). They include goods, services, and experiences that Berry (1994) classifies into four categories: substance (e.g. food and drink), shelter (e.g. hotels), clothing and accessories (e.g. haut couture fashions, jewelry, perfume), and leisure (e.g. travel, entertainment, prestigious sports, and events). However, how one separates luxury products from ordinary items is difficult, and perhaps best viewed on a continuum (Tynan, McKechnie, & Chhuon, 2010). Luxury is thus a subjective, relative and dynamic concept, especially in today’s consumer landscape. Products that were once considered luxury are now becoming readily available as the market expands through mass produced prestige products (masstige), counterfeit products, brand extensions, growth in emerging economies, and an increased involvement of consumers in procuring luxury sales (prosumerism). A hyper-connected market is eroding the key attribute of luxury—exclusivity. Digital, online channels are expanding access to goods. Fashion bloggers are spreading awareness and acculturating masses on how luxury should be consumed. The sharing economy is eroding the ability of price points to constrict acquisition. Luxury has become democratized (Chandon et al., 2016; Kapferer, 2015). What Veblen (2009) once ascribed to be the exclusive right of the leisure class, Goffman (1951) labeled as a status symbol, and Bourdieu (1984) positioned as the visible enactments of the elite’s symbolic and cultural capital, is now available to consumers across socioeconomic categories. Luxury is being shaped by an iterative interplay between producers and an increasingly empowered base of consumers. Consequently, luxury is a function not only of a brand manager’s ability to adopt “abundant rarity” strategies (Kapferer, 2015), and to align and deliver high-quality, aesthetically and hedonically pleasing products to predetermined, segmented consumer groups; it is also a concept influenced by consumers’ co-creation of value and desire to reshape value propositions for their own expressive purposes (Tynan et al., 2010).
This chapter will summarize these changes. It will start with a brief overview of how scholars have historically conceptualized luxury and luxury consumers. It will explore how, against the backdrop of a changing marketscape, academics redefined who could be considered a luxury consumer by creating consumer segments based on consumers’ perceptions of luxury brands and extrinsic and intrinsic motives. It will review the more recent literature that shifts consumers from objects to be segmented to subjects with agency who (although influenced by social structures) use luxury—conspicuously or inconspicuously—for hedonic and sensory purposes, to express dreamed identities, and to maintain distinctions and a sense of group affiliation. It will conclude with a consideration of how more recent technological disruptions and consumer movements—such as demands for sustainability, the rise of social media and prosumption, and the transition of luxury to experiences vested in a sharing economy—are shifting luxury from a system based on clearly delineated socioeconomic levels to a system built around desired lifestyles and sociocultural preferences.
Luxury Consumers: Then and Now
In 1889, Thorstein Veblen adapted an evolutionary perspective to describe a society that was increasingly evolving along class-based stratifications. In his Theory of the Leisure Class, he argued that the leisure classes’ status was not conferred through the mere accumulation of wealth, but by wealth as evidence of excessive leisure time and an abstention from labor. These conditions were represented through what he called conspicuous consumption, that is, the wasteful exhibition of wealth for the purpose of conferring prestige. The leisure class exhibited conspicuous consumption through acquiring fine silverware, hand-painted china, and the latest fashion wear. The purpose of these goods was not vested in their ability to convey food or to cover the body, as this could be achieved with less expensive substitutes, but in their ability to denote that the leisure class had sufficient wealth to afford such unproductive goods. Veblen (2009) accordingly demarcated consumption of “luxuries and the comforts of life [to] belong to the leisure class” (p. 50). Given that the proliferation of goods allowed luxuries to be consumed by lower classes, Veblen further stressed whom the “rightful” consumers of luxury entailed. He categorized the conspicuous consumption of the higher, leisure class as “invidious consumption”—consumption used to convey and legitimize one’s “relative worth or value” and to dissociate from lower classes (p. 27). The consumption of the lower class was deemed as “pecuniary emulation”—competitive consumption used to associate with higher classes. Accordingly, from Veblen’s theory emerged a segmentation of luxury consumers in which income-related dimensions were perceived to shape motivations.
Although prior to Veblen, philosophers and academics had noted the (often negative) sociocultural effects and (often positive) economic underpinnings of luxury and its affiliation with a life of “ease, pleasure and pomp” (Barbon 1905, p. 14), it was Veblen’s theory of conspicuous consumption that became synonymous with modern day theories about luxury (see Mason (1993) and Berry (1994) for historical overviews). This was, in part, brought about by fellow sociologists, Simmel ([1904] 1957), Goffman (1951), and Bourdieu (1984), reinforcing a perspective of legitimate versus illegitimate consumers of luxury.
Simmel (1957), for example, denoted that it was the “upper classes” who had to protect their symbols of status and demarcation (in this case fashion) from the “charm of imitation,” that is, the belief amongst the lower classes that they could achieve group affiliation with upper society through imitating their fashions (p. 542, p. 545). This threat led to an incessant change in fashion: as the masses imitated the elites, the elites abandoned the fashion for a newer mode to maintain their distinctions from the lower classes; the masses would then seek to imitate the new style and the cycle would begin anew. Goffman (1951) built upon the themes of “fraudulent” imitation and “conspicuous consumption,” arguing that class-based status symbols hold expressive purposes (they express the cultural values, lifestyles, privileges, or duties a person holds) and categorical purposes (they visibly divide the social world) (p. 296). As a consequence, classes attempt to protect status symbols through the enactment of restrictive devices (e.g. moral restrictions such as a cultural disdain or societal proprieties, or intrinsic restrictions such as sufficient means of wealth). Bourdieu (1984), in turn, expanded upon the ways class-based distinctions and the “legitimate” owners of luxury were maintained through agentic forces (similar to Veblen, Simmel and Goffman) and structural forces, or what he termed modes of capital. Bourdieu argued that varying levels of capital—which included economic (e.g. income), social (e.g. networks), cultural (e.g. education), and symbolic (e.g. conferred prestige)—determine a class’s position within the social hierarchy and shaped class-based distinctions. Groups maintain their social distinctions through reproducing acculturated, shared and embodied lifestyles, values, norms, and tastes (or a person’s appreciation and atheistic orientation for things such as music, art and food). Distinguishing between various sources and levels of capital allowed Bourdieu to break apart the grouping of “elites” into luxury consumers versus ascetic aristocrats. The latter he defined as academics or public sector executives who, because they held less economic capital and presumably more cultural capital, were orientated towards “the least expensive and most austere leisure activities and towards serious … cultural practices” (p. 286). In contrast stood the luxury consumers—“members of the professions” whose “luxury tastes” led them to “amass the (culturally or economically) most expensive and most prestigious activities, reading expensive glossy magazines, visiting antique-dealers, galleries and concert-halls, holidaying in spa towns, owning pianos … works of art … foreign cars …” (p. 286).
Collectively, these theories and studies by Veblen, Simmel, Goffman, and Bourdieu (re)created assumptions that access to wealth determined access to luxury, and luxury was “conspicuous consumption,” a “squandering,” and “destruction of wealth” vested with a desire to exhibit economic power (Bourdieu 1984, p. 55). In subsequent studies, scholars and practitioners grouped luxury consumers according to the interaction of these two effects: those higher in wealth consumed luxury to maintain status and group affiliation, and those lower in wealth consumed luxury to obtain status and group affiliation.
These dominant views held sway over much of the marketing literature until the early 1990s when academics expanded their surveys to probe for nuances in consumer motives for luxury consumption (Dubois & Duquesne, 1993). Contrasting the perspectives of Allérès (1991) with Dubois and Duquesne (1993) demonstrates this shift. Although Allérès (1991) highlighted a fragmenting market, he still denoted his multiple tiers of consumer segments by income-related attributes: Classe Nantie, the wealthy class whose consumption was a maintenance of their privileges; Classe Intermédiarie, the intermediate class whose consumption was social mimicry; and Classe Moyenne, the middle class whose consumption was consumer greed. Dubois and Duquesne (1993), on the other hand, studied not only income-related motives akin to Veblen’s conspicuous consumption, but also cultural motives, such as symbolic and self-expressive purposes as revealed in the works by McCracken (1988), Hirschman and Holbrook (1982), and Belk (1988). They found that both types of motives operated, with some luxury consumers driven more by one motive and others by both. Consumers categorized as buying luxury for “income” related purposes predominately viewed luxury brands as the standards of excellence and guarantees of authenticity that aligned with their socioeconomic status. Consumers described as buying luxury for “cultural” reasons used luxury brands as hedonic and self-expressive symbols of accomplishment and demonstrations of adaptation to cultural trends.
This shift in perspectives paved the way for future studies to interrogate a variety of consumer motives. Although the income-culture dichotomy could be critiqued for ignoring the importance of the social milieu, or obscuring the interrelation of status and self-expressive motives (see for instance works that extend Bourdiean theory such as Holt, 1998; Allen, 2002; and Arsel & Bean, 2013), it gained prominence in luxury studies. The addition of cultural motives, such as luxury being symbols of accomplishment, aligned with what sociologists Peterson and Kern (1996) noted as generational shifts in elites’ highbrow tastes: younger generations consumed music more indiscriminately, replacing snob-like tastes with an open-minded approach that demonstrated an aptitude for recognizing cultural trends. Moreover, Dubois and Duquesne’s theory encouraged scholars to note the effects of the growth of luxury: its democratization. As Dubois and Laurent (1995) argued, no longer was the market polarized between the “Excluded” (for whom luxury was at best a dream) versus the “Affluent… Old money [and] Nouveaux Riches” (for whom luxury was an “art de vivre”); rather, there was a third consumer segment emerging—the “Excursionists” whose consumption of luxury, while intermittent and linked to exceptional circumstances, was plausible (p. 69–70).
Luxury Consumers in a Democratized Marketplace
The effects of democratization called into question who was a luxury consumer and what luxury entailed, especially as luxury consumption started to grow exponentially in Japan, China, and Russia (see, for example, concerns voiced in Powell, 1990; Dubois & Laurent, 1995; Barnier, Rodina & Valette-Florence, 2006; Chadha, 2006; Thomas, 2007). As Baudrillard (1998) described, Veblen’s conspicuous consumption could be seen across all consumer levels, regardless of income. Consumer society, since it was organized around the consumption and display of goods, meant that the higher the prestige of the good (fashion, houses, cars, etc.), the higher its sign value, and the higher one’s standing would be in society. In a recursive manner, consumer demand pushed the companies to expand their product offerings, and companies pushed new product offerings to expand customers’ consumption practices and preferences. The emergence of affordable but superpremium products (e.g. a cup of Starbucks coffee with a 40% premium over a more generic cup of coffee) and masstige products (mass produced prestige products), combined with a downward stretch by luxury brands to capture more of the market through brand extensions (e.g. sunglasses or perfume), contributed to what Silverstein and Fiske labeled in 2002 as the “Trading Up” phenomenon. Middle-market consumers selectively traded up to premium or affordable prestige products while trading down on categories less meaningful to them (Silverstein, Fiske, & Butman, 2008). Silverstein and Fiske (2003) aptly concluded, “people’s buying habits do not invariably correspond to their income level” (p. 50). Consequently, “luxury” for some categories was becoming decoupled from income, Veblen’s notions of conspicuous “waste” was transitioning to conspicuous “taste,” and “luxury,” and “premium” brands and their consumers were increasingly becoming blurred. As Twitchell (2003) stated in his examination of the American market, the movement since the 1980s to “move more and more objects up into luxury brands” had strained the credibility of the category (p. xiii). In an attempt to gain clarity on what luxury actually entailed, and to help marketers maintain value in the sight of their globally expanding consumer groups, academics undertook studies to assess consumers’ perceptions, attitudes, behaviors, and motives related to luxury (often delineated by brand name goods) and then to cluster them based on these perspectives (Vigneron & Johnson 2004).
The Segmentation of Consumers: Perceptions, Attitudes, Behaviors, or Motives?
In the scramble to segment consumers, academics proposed a myriad of scales. As described below in detail, one can see how this reflected a fragmentation of the meaning of luxury and an extension of who was a luxury consumer. For example, in delineating luxury, scales differed in their approach: was luxury to be measured based on attributes of luxury in general or attributes of brands, or was it to be measured based on consumers’ underlying motives? These differences in defining what was under study led to variances in how consumers would be segmented (e.g. along their perceptions of luxury or luxury brands or based on their personal motives). Important to note, however, is that most of the studies emanated from Western scholarship. As such, the scales and segmentations reflected Western-based individualistic traditions and sociocultural beliefs about luxury consumption, which came under challenge as luxury brands extended into Asian markets.
One of the preliminary studies that moved beyond an income-based segmentation model was completed by Kapferer (1998). He clustered consumers based on aspects of luxury brands that appealed to them. Drawing from a pool of students at HEC School of Management in France, Kapferer used student responses to draw up a list of why brands deserved the “appellation of luxury” (p. 44). He uncovered 16 brand attributes, including international reputation, uniqueness, craftsmanship, and quality, and also less recognized attributes such as the sense of magic, beauty, fashionability, and creativity. Based on the top five attributes respondents selected, Kapferer grouped respondents into four segments and aligned these with representative brands. The prototypical consumer held beauty of the object, excellence quality, magic and uniqueness of great importance (e.g. Hermes). The second group held creativity, the product’s sensuality, then beauty and magic as imperative (e.g. Gucci). The third segment attached greater importance to beauty, magic, the brand’s classical value yet ability to stay fashionable (e.g. Louis Vuitton). The fourth segment, driven by conspicuous purposes, sought exclusivity yet international reputation (e.g. Chivas). Although some of these clusters overlapped, there were demarcations between groups based on overriding affinities (e.g. beauty and craftsmanship versus creativity versus fashionability versus status symbols). Many of the brand attributes Kapferer identified found resonance in other studies. (Refer to Vigneron and Johnson (2004) for a summary of how Kapferer’s (1998) attributes were applied in subsequent studies). However, key subjective attributes, although widely appealing—magic, the importance of beauty and creativity—became lost in much of the literature going forward. Rather, the focus shifted towards more objective attributes that companies could more readily control, such as quality, and motives that could be used to denote consumers who wanted luxury goods versus those who wanted premium products. Forming a basis for this latter stream of segmentation variables was Vigneron and Johnson’s (1999) classifications of prestige-seeking consumers.
Vigneron and Johnson’s (1999) article, based on a review of the literature, classified consumer motives into five major themes. These included: Veblenian motives, where conspicuous value appealed; snob motives, where tendencies to engage in social comparisons (Festinger, 1954) resulted in consumers seeking exclusivity of brands to maintain distinctions; bandwagon effects, where the symbolic value of luxury brands and their use as a marker of group membership made the social value important (Solomon, 1983; McCracken, 1988; Belk, 1988); hedonism, where emotional desire and subjective intangible benefits (e.g. sensory pleasure) came to the fore (Hirschman & Holbrook, 1982; Sheth, Newman, & Gross, 1991); and perfectionism, where the superiority and quality of the good mattered (Roux 1995). They took these themes forward in their development of the “Brand Luxury Index” (BLI)—an index that could be used to gauge why consumers sought certain luxury brands and how they perceived the value of a luxury brand (Vigneron & Johnson, 2004). The BLI divided the valuation consumers attributed to brands into two groupings: non-personal aspects, which reflected extrinsic factors, such that luxury brands were valued based upon their conspicuous, unique/exclusive and high-quality merits; and personal aspects, which measured hedonic and extended-self attributes, such as luxury brands being viewed as “glamorous” and “rewarding” (p. 502). It was hypothesized that consumers could be clustered based upon their different perceptions of luxury brands. Hudders, Pandelaere, and Vyncke (2013) eventually repeated a similar brand-centric approach, clustering consumers according to whether they valued luxury brands for their expressive (e.g. conspicuous, exclusive), functional (e.g. excellent quality, craftsmanship), or emotional (e.g. elegance, comfort, creativity) qualities. Their findings resulted in three consumer segments: the impressive group who consumed for self-indulgence rather than to fulfill extrinsic needs; the expressive group who sought to impress others or express their identity to or disassociation from others; and the mixed segment (the largest grouping) that rendered both the indulgent and distinctive attributes of brands as important.
Taking a different approach, Dubois, Czellar, and Laurent (2005) decoupled the segmentation of luxury from brand attributes by segmenting consumers based on attitudes and self-reported practices regarding luxury in general. Their questionnaire, for example, asked: “In my opinion, luxury is flashy”; “Truly luxury goods cannot be mass produced”; “I almost never buy luxury products” (p. 117). Additionally, taking into account the globalizing market, they sought to assess the diversity of luxury attitudes by testing the scale in 20 countries (Dubois, Laurent, & Czellar, 2001). Their findings, although limited by the scale’s Western cultural biases, were used to segment consumers into three groupings (comparable to Dubois and Laurent’s (1995) previous work). These included: elitists, who held luxury to be an exclusive good reserved for refined people who can demonstrate true taste and appreciation; democratics, who believed luxury should be more widely available and that anyone should be able to consume it; and distants, who were not attracted to luxury and believed that a “fine replica” is a perfect substitute (Dubois et al., 2005, p. 122). In a similar vein, Deeter-Schmelz, Moore, and Goebel (2000) developed a scale to capture factors underlying consumer practices related to shopping for prestige clothing. The Precon scale assessed the importance of brand name, product quality, fashionability, store atmosphere, and social acceptability of the store. Both of these scales, created based on exploratory interviews, were argued to help managers position their upscale brands and to create positioning strategies to target prestige or luxury consumers.
In parallel, Tsai (2005), in an attempt to understand what other motives besides “buying to impress” lay beneath consumers’ purchase intentions, started to expand into motives that might explain purchases of not only Western consumers but also the growing base of Asian consumers (p. 442). In his “Personal Orientation towards Luxury Brand” model, he added the motives of: self-directed pleasure (the purchase of luxury for hedonic purposes without emphasis on whether it pleases others); self-gift giving (the purchase of luxury for celebratory or emotionally compensatory purposes); congruity with internal self (the purchase of brands because they align with their self-perceived image); and quality assurance (the choice of goods based on the superiority of quality over prestige or other people’s opinions). Although Tsai did not create customer segments, the robust results achieved in testing the questionnaire in eight countries, including geographical representations from Asia Pacific, Western Europe and North America, provided further impetus for marketers and academics to recognize that “social motives of displaying status, success, and distinction” were only part of the picture, and that non-Western traditions and perspective were imperative if marketers were to build and strengthen brand loyalty.
In taking a step back to develop a broader and cross-culturally relevant perspective of luxury consumers, Wiedmann, Hennigs, and Siebels (2009) and Hennigs et al. (2012) assessed the merits of the various scales, and combined three of these scales (Vigneron and Johnson 2004, Tsai 2005, and Dubois et al. 2005) with themes and questionnaires from literature streams outside of the luxury domain, such as Sheth et al.’s (1991) taxonomy of consumer motives and Richins and Dawson’s (1992) materialism scale. Wiedmann et al. (2009) conceived that their resulting conceptual model, which divided antecedent motives into four types of value—social, individual, functional, and financial—could determine consumers’ perceptions of luxury and be used to ascertain why consumers valued different luxury brands. Social value captured conspicuous and prestige motives (e.g. “I am interested in determining what luxury brands I should buy to make good impressions on others”). Individual value included self-identity, hedonistic, and materialistic motives (e.g. “I view luxury brand purchases as gifts for myself to celebrate something I do and feel excited about”). Functional value measured for the importance of quality, usability, and uniqueness (e.g. “I place emphasis on quality assurance over prestige when considering the purchase of a luxury brand”). Financial value considered price (e.g. “Luxury products are inevitably very expensive”) (Hennigs et al. 2012, p. 1026). Based on preliminary empirical results with European consumers, Wiedmann et al. (2009) clustered consumers as: Materialists, where quality and usability of goods mattered; Rational Functionalists, where quality value and personal preferences/self-identity was of importance; Extravagant Prestige-Seekers, where prestige value and hedonistic extravagance were imperative; and Introvert Hedonists, where personal pleasure and the way luxury enhanced their quality of life mattered. In extending the model to reflect a global market segmentation, Hennigs et al. (2012) tested the model with consumers from Asia, Latin America and Northern America, and Eastern and Western Europe. Their cluster analysis revealed four overarching groups: the Luxury Lovers, who viewed luxury’s exclusivity, uniqueness, social recognition, and fit with self-image as important; the Status-Seeking Hedonists, who valued luxury for its ability to impress people and to bring personal pleasure; the Satisfied Unpretentious, who held more individual versus social reasons, including quality assurance (versus prestige), buying luxury only when needed; and the Rational Functionalists, who, having a significant knowledge of the luxury world purchased luxury because of its superior product quality. Based on their analysis, Hennigs et al. (2012) concluded that since the basic motivational drivers of luxury consumers remained vested in financial, functional, personal, and social values of luxury—regardless of country of origin (e.g. Asia versus Western Europe)—and although these motives could fluctuate in their relative importance, it was better for marketers to “use groups of consumers rather than countries as a basis for identifying international segments” (p. 1020).
This finding contradicted the cultural recognitions that other scholars had argued were imperative to understand the Asian market. Wong and Ahuvia (1998), for example, raised concerns over the overly-Western individualistic rationales (upon which many of these scales were built). They hypothesized that the social orientation of Southeast Asian Confucian traditions, which led to an interdependent (versus Western independent) self-concept, a respect for hierarchies, and pressures to conform, would shift the motives from an internal, self-centered focus to motives vested in gaining external approval through publicly visible goods. Thus, the purpose of acquiring luxuries was to fit in or for gift exchanges, not for self-indulgences. The symbolic value of goods represented social positions within hierarchies versus self-expression. Indeed, in testing for these cultural nuances, Christodoulides, Michaelidou, and Li (2009) found that Vigneron and Johnson’s (2004) BLI scale items of conspicuousness and uniqueness had low reliabilities. Li and Su (2007) found support for variances between Chinese and American consumers, demonstrating that Chinese consumers were motivated to consume luxury for social pressures related to face, that is, a “favourable social self-worth that a person wants others to have of her or him in a relational and network context” (p. 239). Unlike the Western notion of prestige, face relates less to personal successes and more to the maintenance of individual and familial honor. As Li and Su (2007) ascertained, Chinese consumers were more likely to purchase luxury for reasons related to conformity, a need to maintain a distinctive identity that matched their social status, and in order to show honor to others (i.e. gift giving). (For similar findings see: Phau and Prendergast, 2000; Wang, Sun and Song, 2011; Bian and Forsythe, 2012; Walley and Li, 2015.)
Trends and Gaps of the Segmented Consumer View
We see from the previous summary how, over the course of a decade, the boundaries between prestige and luxury products became blurred, and the segmentations of luxury consumers shifted from income-centric groupings, towards a combination of intrinsic and extrinsic motives. This trend became more entrenched as scholars affirmed the power of scales through comparative analysis (Barnier, Falcy & Valette-Florence, 2012; Husic & Cicic, 2009), and expanded explanatory models for luxury consumption to include self-esteem (Truong and McColl, 2011) and the internal motives (versus merely external factors) driving consumers to engage in bandwagon consumption (Kastanakis and Balabanis, 2012).
Additionally, underlying many of the studies was the need to understand how to navigate the growing demand for luxury in China, Russia, Japan, and India, and a consumer market that was increasingly becoming well-informed and less loyal to a single brand (Okonkwo, 2007). Scholars demonstrated how companies could segment a globalizing consumer market in such a way that luxury brands could align their brand associations with their offerings and retail and marketing strategies to maintain consistency and appeal in the eyes of consumers, or attempt to subtly recognize cultural variances. (See for example: Phau & Prendergast, 2000; Barnier et al., 2006; Chadha, 2006; Okonkwo, 2007; Atwal & Williams, 2009; Fionda & Moore, 2009; Chernev, Hamilton & Gal, 2011; Atwal & Jain, 2012; Kapferer & Bastien, 2012.)
These studies, however, vested in assumptions that marketing managers could shape the value and associations attributed to brands, tended to obfuscate the importance of social influence and the role other consumers played in determining a brand’s association, despite the existence of a large body of literature (as detailed in Wood & Hayes, 2012). Indeed, as other academics found, symbolic meanings consumers attribute to brands are influenced by the consumer “types” who buy the brands (Muniz & O’Guinn, 2001) and whether other consumers use the brands conspicuously (Ferraro, Kirmani & Matherly, 2013). Secondly, the attempts to put consumers into segments resulted in placing too much emphasis on “why” individual consumers valued or purchased luxury, which overshadowed questions around “what” social groups consumers, through their symbolic consumption, were attempting to join or seek distance from, or how groups determined, enforced, or adjusted valuations of, and beliefs attached to, luxury and consumption practices. Thirdly, by treating consumers as objects, they failed to recognize the role that consumers played in co-creating value—a theme that would become increasingly imperative as technology allowed consumers to connect with each other and provided quick access to information that once used to be the cultural capital and markings of a privileged upbringing. In a parallel stream of literature, other researchers started to address these gaps by delving into how various groups responded to the democratization of luxury and how consumers and social structures interact to create or preserve social hierarchies and groupings.
The Luxury Consumer: Framed by Social Structures and Recognized as an Agentic Subject
To identify social structures or the agency of consumers as it relates to luxury, academics have pulled from literature on social comparison theory (Festinger, 1954), symbolic interactionism (Solomon, 1983), and the multiplicity of possible selves (Markus & Nurius, 1986). Although some of these theories had been used to develop the scales noted previously (such as social comparison and symbolic interactionism), the structured format of the scales muted the way consumers enacted or contradicted these theories. Applying these themes to study consumers’ lived experiences reveals that luxury consumers were not easily categorized. Before delving into how these have been applied in more qualitative, exploratory studies, a brief recap of each theory is provided.
Social Comparison Theory reveals how consumers’ self-evaluations and self-esteem, motives and ultimately their consumption preferences and behavior are influenced by comparisons either to those in their affiliated group (Bearden & Etzel, 1982; Phau & Prendergast, 2000), those in a group whom they aspire to be like (Escalas & Bettman, 2005; O’Cass & McEwen, 2004) and/or those they seek to avoid or disassociate (Berger & Heath, 2007; White, Argo, & Sengupta, 2012; Mazzocco, Rucker, Galinsky, & Anderson, 2012).
Symbolic Interactionism advocates that attention be brought to how consumers use products, language, and gestures to make sense of and interact with their physical and social world. In particular, perceptions of oneself are based on “a projection of how one appears to others—seeing oneself as others do” (Solomon, 1983, p. 232) (see also: Levy, 1959; Sirgy, 1982; Mick, 1986). Consumers are postulated to use goods that symbolically match the role society expects them to play, at times using goods to communicate new identities and at other times using goods to maintain established identities. As such, product symbolism allows social identities to be communicated between consumers and also internalized by consumers (Solomon, 1983).
Multiplicity of Possible Selves: A perspective on the multiplicity of possible selves argues that consumers should be viewed dynamically (rather than statically as the scales encourage). Possible selves represent “individuals’ ideas of what they might become, what they would like to become, and what they are afraid of becoming” (Markus & Nurius, 1986, p. 954). It recognizes how consumers can hold converging and diverging goals, motives, aspirations, fears and perceptions of threats, and how they have real selves, ideal selves they seek to obtain, and undesired selves from which they seek distance (Ogilvie, 1987).
Status Contestations and the Rise of Counterfeits and (In)conspicuous Consumption
These three theoretical angles, often weaved together with theories on social status and distinctions (i.e. Bourdieu, Goffman, and Simmel), allow luxury consumers to be viewed as active participants, though influenced by pressures from social groups and norms. Studies in this vein, although they often risk muting the role of the marketer, reveal how consumers enact taste regimes, engage in status games, or how their consumption and discourse reflect desires to protect social distinctions. For example, Arsel and Bean’s (2013) work on taste regimes—a concept central to Bourdieu’s theory of elites’ preference and ability to consume luxury—plots out how the emergence and reproduction of taste regimes are facilitated through: (i) the production and sharing of meaning brought about by mediated or face-to-face exchanges (e.g. knowing what luxury products to purchase); (ii) performances that enact and “conform to community-specific rules” (p. 901) (e.g. using luxury products in the approved manner); and (iii) “the embedding of objects in practice” (p. 902) (e.g. the use of luxury in ritualistic activities, or consciously contemplating or adopting (in)appropriate uses). Although this is a simplistic overview of the acculturation process that surrounds consumers’ acquisition or maintenance of identities, Üstüner and Thompson (2012) offer a more nuanced view, noting how identity projects may result in interdependent status games and uneasy acquisitions of Bourdieuan modes of capital. Based on Turkish elites and their service providers (hairdressers), Üstüner and Thompson describe the subtle power plays that manifest when hairdressers attempt to acquire higher levels of cultural capital and perform and enact new identities. The elite reinforce what Bourdieu describes as symbolic domination (i.e. hairdressers internalizing and accepting their lower status in society) and protect the social hierarchy by: maintaining emotional and physical distance; severing ties when hairdressers transgress protocols or fail to defer authority; and denigrating and delegitimizing hairdressers’ symbolic and cultural capital (e.g. their mode of dress or abilities to achieve hairstyles). Holt’s (1998) earlier work noted similar tactics. Explaining how high cultural capital (HCC) American consumers maintain class boundaries in a mass-consumer society, Holt draws parallels between Bourdieu’s theory of cultural capital, social comparison and discourse-based symbolic interactionism. Similar to Goffman’s (1951) description of moral restrictions and Bourdieu’s (1984) theories of vulgarization tactics, Holt concludes that HCC’s privileged position not only allows them to determine prestigious practices but also to denigrate the practices of those who attempt to emulate them with pejorative terms, such as “materialistic,” “showy,” “ostentatious,” “unrefined” (1998, p. 20). Over a decade later, Roper et al. (2013) recorded similar themes in their analysis of luxury consumers’ discourse: it became the “other” luxury consumers who depended on luxury brands to validate social identities and relations; the respondents, on the other hand, overtly mocked luxury brands, even ones they purchased, or acted “moderately dispassionate” in attempts to distance themselves from being labeled as “brand dupes” (p. 393). More specifically, Arsel and Thompson (2011) expand upon tactics consumers use to prevent the devaluation of their cultural capital when burgeoning popularity of their lifestyle or of a preferred brand leads to cultural clichés. As they note, the tactics consumers use is predicated on their cultural authority and community status. Those high in status can call into disrepute clichés by classifying the clichés as being views of uninformed outsiders. Those low in status, however, must navigate the lines between being a legitimate community member versus a cultural junkie. As such, they stress the ways their consumption habits reflect the true spirit of the community. Although Arsel and Thompson’s (2011) study is based on the experiences of Indie musicians and artists, it draws parallels to the experiences of luxury consumers and the clichés they must navigate (see e.g. Steinfield, 2015).
Collectively, these articles reveal how social comparisons and normative pressures clearly shape people’s perspectives of each other and their own motives and behaviors. They also reflect a navigation of undesirable possible selves as consumers attempted to distance or deny their luxury behavior that could be construed as a social faux pas. The prominence of sociocultural forces and consumer reactions continues to grow in the literature as scholars and practitioners grapple with the implications of counterfeits, masstige products, the proliferation of branded goods, and the dominance of the Asian market. As described next, research focused on these marketplace dynamics has ranged from psychological experiments and hypothesized models to qualitatively rich descriptions.
Counterfeits: Studies on counterfeits distinguish them as inauthentic luxury-branded goods (versus non-branded items), that are used to obtain social group affiliation within reference groups (Turunen & Laaksonen, 2011). Unlike luxury goods, studies have found that consumers do not tend to use them to gain admiration because they fear social backlash and public ridicule from other social groups who might be able to distinguish between the genuine and the fake (Wiedmann, Hennigs, & Klarmann, 2012). In order to avoid these negative consequences and feelings of shame, consumers use counterfeits in private or when with friends (Penz & Stöttinger, 2012). Penz and Stöttinger (2012) have also demonstrated that consumers who purchase significantly and slightly cheaper counterfeits view themselves favorably as smart shoppers. Although Penz and Stöttinger do not relate these findings to the multiplicity of selves, many of their descriptions exemplify cognitive dissonance between possible selves: the celebrated real self of the smart shopper stands in contrast to the undesirable self of the poser who risks being shamed. Applying a social comparison perspective, Wilcox, Kim, and Sen (2009) showed that consumers are more likely to purchase counterfeits with logos if they view luxury brands as status symbols, important for helping them to fit in to a social situation; authentic luxury brands are likely to be purchased if consumers view the brands as part of fulfilling self-expressive functions. In contrast, Francis, Burgess, and Lu (2015) recorded that younger generations are pursuing counterfeit luxuries not for social comparison purposes, but for more symbolic and self-expressive reasons. As part of a “cool” anti-brand trend, counterfeits are equated to ideals of rebellion, fun, and being a bit bad by going against the mainstream. Symbolic consumption practices were also found by Gentry, Putrevu, Goh, Commuri, and Cohen (2002) in their study of tourists who knowingly seek out and purchase counterfeits: counterfeits under this guise become symbolic tokens of an authentic travel experience.
Inconspicuous Consumption: More recently, studies have started to examine consumers who choose inconspicuous consumption of luxury or rejection of luxury altogether. Berger and Ward’s (2010) experiments conducted with fashion experts and normal students, demonstrated that those with high levels of cultural capital (i.e. knowledge of fashion) prefer subtle and inconspicuous signals on goods as long as these signals can be decoded by others in the know. This allows them to differentiate themselves from normal consumers and also to signal aspects of their identities to like-others. Berger and Ward concluded that similar results could be extrapolated onto luxury consumers: in order to avoid resemblance to middle-status individuals, high-status consumers may choose high-end options with subtle or absent logos even at the risk of resembling low-end options, (a result convergent with Holt, 1998). Findings from Geiger-Oneto, Gelb, Walker, and Hess (2012) also supported this proposition: respondents low in social status (measured by occupational prestige) and favoring status consumption were inclined to choose counterfeits. However, as social status increased, authentic luxury (an LV bag) was chosen over counterfeits, and, at higher levels of social status, respondents selected non-luxury items.
Status Games and Compensatory Consumption: Numerous experimental studies have specifically explored how consumers use luxury as part of status-related games. Han, Nunes, and Drèze (2010), for example, revealed that some consumers high in affluence but who have a low need for status use quiet signals (the patricians), while other wealthy consumers, who have a high need for status but lack the connoisseurship or culture necessary to interpret subtle signals, use loud signals (the parvenus). Consumers low in wealth who have a need for status mimic the parvenus often through the purchase of counterfeits (the poseurs), while those with a low need for status refrain from attempting to signal with luxury altogether (the proletarians). Rucker and Galinsky (2008) found that compensatory motives (compensation for a lack of power) cause low-status groups to choose high-status luxury goods, while Mazzocco et al. (2012) clarified that these higher levels of conspicuous consumption depend on the level of identification with a low-status group and the ego threat that arises from this identification. As Mazzocco et al.’s (2012) tests showed, although blacks (the low-status group) exhibited greater conspicuous consumption desires than whites, blacks who highly identified with their racial group held even greater conspicuous consumption desires, and whites, when made temporarily to identify with a low-status group, likewise had higher conspicuous consumption desires. Similarly, Sivanathan and Pettit (2010), in proposing an alternative explanation for low-income consumers’ costly social signaling, demonstrated that low income consumers’ purchase of status goods is motivated by compensatory behaviors aimed to restore or protect self-integrity and self-worth.
In contrast to the experimental studies, interpretive research by Gbadamosi (2015) captured how ethnic minority youth in the UK, in managing their various selves, use symbolic consumption to gain acceptance in society. Likewise, Steinfield (2015), who conducted interviews with South African luxury consumers, found that the emerging middle and upper class of black luxury consumers employ luxury as a loud or quiet signal depending on the social context and the identity respondents need to project to ward off undesirable stereotypes. For example, when attempting to instill confidence to secure tenders with black government officials, prestigious luxury items (bling watches) were often employed, or, when socializing with fellow blacks, the use of loud luxury (yellow suits) was encouraged as creative expressions of identity and success; however, when engaging with whites, blacks attempted to fit into the socialization restrictions and distanced themselves from perceptions of tainted wealth by wearing “safe black suits” (p. 33).
Collectively, these studies reveal that the assumed linkages between conspicuous consumption and status do not always hold (see also findings by O’Cass & McEwen, 2004; Truong, Simmons, McColl, & Kitchen, 2008). As Eckhardt, Belk, and Wilson (2015) contend, status – denoted by “high quality, luxury, and perhaps class”—needs to be decoupled from conspicuousness—associated with “recognisability, image and appearance” (p. 811). A high price may indicate a high status, but can also represent lower levels of conspicuousness (Berger & Ward, 2010). Moreover, as the growing body of research on young consumers indicates, compensatory consumption of luxury is being driven more by peer influence or sense of uniqueness or “coolness” rather than the achievement of higher levels of status (Francis et al., 2015; Gentina, Shrum, & Lowrey, 2016).
Comparing the “East” versus the “West” versus the Rest of the World: In offering a counterpoint to many of the Western-centric studies, a stream of literature has emerged to reflect upon differences between “East” and “West” luxury consumption. For example, in addition to the previously mentioned studies (e.g. Li & Su, 2007; Wong & Ahuvia, 1998), Phau and Prendergast (2000) demonstrated that the Confucian values of respect for authority and desire for harmony, affects the explanations given for the conspicuous consumption of Asian luxury consumers. As they argued from a social comparison perspective, the referent group shifts away from higher or lower social groups to members of the same group, leading to pecuniary emulations for conformity purposes. In contrast, Western consumers tend to use (in)conspicuous consumption for invidious purposes, as they seek to distinguish themselves from social groups. Although Han et al.’s (2010) study found that Western consumers also exhibit tendencies to engage in pecuniary emulations, the underlying motives were vested more in achieving individual prestige and distinction rather than saving face. Similarly, Jiang and Cova’s (2012) and Lin’s (2011) study on counterfeit consumption found that Chinese consumers’ purchase of counterfeits was driven by attempts to meet sociocultural demands within financial limitations: the need to save face results in conformity to the brands approved by peers and by social group, which means that a counterfeit version is better than no brand if financial resources cannot be secured to purchase legitimate luxury. Yet Jiang and Cova (2012) also found that consumers driven by a low need for status were likely to purchase counterfeits as part of a hedonically gratifying experience (enjoyable and fun shopping), and internally satisfying accomplishment (obtaining fashionable goods at lower prices).
Although India is often classified as part of the East, research on luxury consumers reveals different social pressures, self-expressive motives, and consumer behaviors than East Asians (Eng & Bogaert, 2010; Atwal & Jain, 2012). For example, luxury is framed more akin to the Western mindset as being symbolic of individual wealth and achievement. Luxury gifts are likewise viewed as a mode of creating distinction: gifts bought for social functions, such as wedding gifts, become markers of people’s wealth and success. However, luxury consumption is influenced by a strong pull towards preserving tradition and a preference to base luxury choices on local reference groups, such as Bollywood stars. As a result, foreign luxury becomes blended with traditional Indian clothes and creative designer wear (Eng & Bogaert, 2010).
As the research on India typifies, although initial forays have been made into the study of emerging markets in other areas of the world (India, Brazil, Russia, and wealthy markets in Africa) these studies tend to focus on how consumers are the same or different from the Western norm, often with a slant towards helping marketers understand and maneuver the landscape (Atwal & Bryson, 2014). Research that sheds light on the results of consumer agency (such as status games) remains limited (for notable exceptions see Steinfield (2015) and Üstüner and Thompson (2012) as discussed before).
The Luxury Consumer of the Future: Emerging Trends and Areas for Future Study
Demands for sustainability, the growth of luxury experiences and the sharing economy, and a globally and digitally connected market, are impending trends that will inevitably redefine luxury and the luxury consumer. Although research exists on some of these trends, their implications are still not fully understood and merit further consideration.
For example, Kapferer and Michaut-Denizeau (2013) and Joy, Sherry, Venkatesh, Wang, and Chan (2012), deliver convincing arguments that the luxury industry is well-aligned to address consumer demands for sustainability. However, as Kapferer and Michaut-Denizeau (2013) found, the sustainable focus taken by most companies to ensure properly sourced materials and environmentally friendly products, matter little. Moreover, it misaligns with human welfare concerns more heavily supported by consumers (i.e. exploitation of workforce). Questions remain regarding the generalization of these views: Kapferer and Michaut-Denizeau’s (2013) work was with French consumers; Joy et al.’s (2012) was based on consumers from Canada and Hong Kong. Studies thus need to probe for cultural or generational differences. Consumer reactions to social or environmental transgressions require consideration for unsustainable luxury goods and luxury experiences (most research is still heavily focused on luxury goods, negating the environmental impact of experiences and services such as luxury travel, spas, sporting events, etc.). Additionally, a potential shift to more animal- and environmentally friendly materials raises questions regarding effects on the perceived authenticity of the luxury goods, and thus raises questions for whether elements valued as status symbols are changing. Similar to how consumers currently use inconspicuous luxury to denote higher status, consumers may use sustainable luxury products to engage in different forms of social comparison games or to communicate real or ideal identities of an eco-friendly self. The questions raised are thus not only what motivates sustainable luxury consumers, but also how the non-sustainable luxury consumers may navigate potentially undesirable identities. Luedicke, Thompson and Giesler’s (2010) analysis of Hummer owners’ response to a backlash website sheds light on one dimension—discourse tactics. They note how these morally tainted consumers use culturally prominent mythological scripts (e.g. American war hero or American exceptionalism) to navigate criticisms of excessive and wasteful consumption. However, group and individual practices or tactics, especially in regard to face-to-face confrontations or behaviors, require further consideration.
Secondly, technology and hyper-connectivity may be redefining consumer and producer roles. Although the implications of social media as it relates to luxury brand management has benefited from numerous studies (see for example the special issues edited by Ko, Phau, and Aiello (2016), Chandon et al. (2016), and Phan and Park (2014)), further considerations are still needed on topics related to how a hyper-connected world affects consumers’ roles. Kapferer (2015), for instance, sheds light on numerous disruptive trends, including how online luxury, which lacks the traditional retail interactions and sensory components, will alter customer engagement, not only between luxury brands’ representatives and consumers, but between consumers themselves. Studies by Tynan et al. (2010) and Zhang (2015) have started to reveal how consumers employ networks and social media to shift their roles from a consumer to value co-creator (consumers who work collaboratively with companies to produce innovations that can expand the value proposition) or a prosumer (a consumer who has an increased involvement in content production, often working independently). Tynan et al. (2010) found that companies and consumers can leverage co-creation processes to offer a better, overall luxury brand experience, including giving certain consumers access to a company’s key designer or introducing them to artists doing cutting edge designs. Zhang (2015) critically examines Chinese women prosumers who use social media to engage in transnational reselling of Western luxury (i.e. they advertise goods by posting pictures on blogs featuring purchased luxury and then mail luxury goods to clients in China who place orders online). On one hand, Zhang lauds how this entails a form of agentic and participatory power that allows women to redefine boundaries between work and consumption, the commercial and the personal. On the other hand, she questions how this plays into maintaining divisions in societies along class, race, nationality and gender, and how this fosters a commoditization of the prosumer. Although these studies attest to inroads being made, questions remain. How will co-creative consumers and prosumers navigate the resulting multiple selves? And what implications will co-creation and prosumption have on the value proposition and symbolic value of luxury goods and experiences, especially as the prosumer starts to subsume the position of the advertiser and retailer?
Thirdly, luxury experiences, while being identified and shaped into a taxonomy (Atwal & Williams, 2009), connected to the retail space (Dion & Arnould, 2011), and studied at selective venues, such as hotels (Walls, Okumus, Wang & Kwun, 2011), have yet to be fully understood, especially with the rise of the hyper-connected, sharing economy. As Andjelic (2015) summarized, “Traditional luxury imagery may have been a reflection of our identity, but experiential luxury is our identity.” This new “memorandum of understanding” of the sharing economy may mean that rented luxury creates experiences that play to social expectations (e.g. yachts, high-end artworks, gowns, watches) and allows consumers to build unique identities through amassed global vacation swaps (e.g. a weekend in a NYC townhouse for a weekend on a private island). The shared economy, although still in a nascent research state in the consumer behavior literature (Belk, 2014; Bardhi & Eckhardt, 2012), clearly has the potential to disrupt the market, redefining goods that we once owned as goods that we merely experience for a rented time. Companies like Project Runway are taking the market to the next level of democratization. What are the implications of these for status games, the demarcation of luxury consumers, and the symbolic value of goods and experiences? Luxury, in this experiential world, may evolve to align more with groups built around desired lifestyles and sociocultural preferences than groups built around socioeconomics and owned status symbols.
In conclusion, while our understanding of luxury consumers has come a long way, much remains to be uncovered if we are to understand the way market changes affect status symbols, and in turn, the implications these have on the way they are used to shape, maintain, and communicate consumer identities.
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