If you’ve spent even 10 minutes in this industry, you could be forgiven for being surprised that even sellers of fine jewelry can’t agree on what motivates customers to buy luxury goods. .
Of course, there are also important occasions such as engagements, anniversaries, and holidays that we choose to celebrate with jewelry.
But the decision to decorate such an occasion with jewelry, as opposed to traveling or other options, is just that. It’s a choice, not an obligation, and people are happy to do it.
In fact, they have been doing so in record numbers in recent years.
In the 1940s, De Beers launched a hugely successful campaign that, over the next few decades, encouraged couples to covet diamond rings as the ultimate symbol of love and celebrate their anniversaries accordingly. It has become.
The use of diamonds in engagement rings has increased from about 10 percent in the ’40s, when De Beers started getting the message across, to about 85 percent today.
Ten years later, Tiffany & Co., the first retailer to carry Patek Philippe watches (1851) in the United States, entered into a co-branding initiative with Rolex that featured the Tiffany name on the dial.
This partnership served both companies until it ended in the 1990s as a result of disagreements over discrepancies in dial engravings.
Of course, our definition of luxury doesn’t have to include the aforementioned iconic brands.
It’s clear that we don’t buy jewelry out of necessity any more than we buy watches to tell the time. There’s something more fundamental, almost mysterious, about our decisions to spend money on luxury goods.
As we soon enter the all-important holiday season for many in the business, what we do in the coming weeks will go a long way in determining what the year will ultimately look like.
While major same-store sales have declined this year, independent jewelry stores remain on track for a very strong 2023 as of the end of September.
To that end, there is no more important factor in determining year-end results than excellent sales performance and, to put it bluntly, the store owner’s mindset.
If you believe that you are best serving your customers by imagining that they are motivated to find a sale, discount, or something a little cheaper than usual, then you are 100% correct and your customers and customers. work.
On the other hand, 95 percent of our thinking (and therefore the thinking of our customers) happens unconsciously, and customers actually want you to be unbiased about them and their motives for buying jewelry. Great things can happen if you recognize the possibilities.
Around this time every year, I write a column with a list of tips for sales professionals.
This year, we thought it might be more interesting to share a few reminders about why behavioral psychologists and academics believe customers buy luxury goods.
It might be an interesting topic for a meeting to kick off the season, or to help dispel any nagging thoughts about not reaching enough customers.
1) Sense of control/involvement
From an early age, we crave control and agency.
We see the negative effects of taking agency away from people in every field. This is very noticeable when it comes to human resources management.
This independence also applies to consumer behavior.
In some cases, the act of spending itself can be an important factor in purchasing luxury items. It’s as if the customer is saying, “I can do it, so I’ll do it!”
2) Build your own brand identity
When customers purchase luxury goods, they often do so (consciously or not) as part of the construction of their own brand identity.
They literally buy to express who they want to be, and wearing luxury brands and products can be a self-directed and/or outward expression of that desire.
It can also be a declaration about one’s place in the social hierarchy.
3) Psychological rewards for gifts
Giving a significant gift can be more rewarding for the giver than for the receiver. Again, behavioral psychologists have identified that givers enjoy a hit of dopamine when they give gifts to others.
The joy of gifting jewelry to a loved one, for formal or informal reasons, can be a more fulfilling experience than buying it yourself.
4) Often associated with a background of hardship
The late Jack Welch, former CEO of General Electric Co., once suffered a life-threatening heart attack.
Later, as he was taken to the ER by ambulance, a reporter asked him what was going through his mind, and he replied that if he survived, he would never buy wine worth less than $100 again.
Welch revealed that he grew up poor, “without a nickel to rub together” and has drunk enough cheap wine in his life.
A life full of hardships and hardships can be a great motivator for buying luxury goods if you are later in a position to do so.
There is ample evidence to support the fact that even people who are not typically considered part of the luxury buying demographic will sacrifice other needs in their lives to make it happen. .
It’s as if buying luxury goods itself is an act of rebellion.
5) Price is a proxy for quality
When purchasing luxury goods, price acts as a proxy for quality, especially for products that are not well understood by customers.
Customers believe that if they are going to pay a lot of money for a piece of jewelry, it must be of exceptional quality.
The effect is even greater if the item is limited edition, one-of-a-kind, or in short supply.
6) The act of spending is hedonistic
There’s a certain hedonistic quality to spending a lot of money on luxury goods.
Some psychologists speculate that because “investing” is done privately, the act of “spending” is a public statement to announce one’s status.
In such situations, pleasure comes from the act of spending money.
7) Just because
Finally, people buy luxury goods because they want them.
Making a big purchase doesn’t necessarily require internal or external streamlining. It’s just something they choose for some reason or no reason at all.
When customers spend money on jewelry, diamonds, and watches, we don’t need to know their motives. Just compliment them on their good taste and thank them for their business.
Enjoy retail.
