Research Highlight Designer shoes to climb the social ladder? A novel take on conspicuous consumption
Conspicuous consumption, the ostentatious purchase of expensive, exclusive products to signal wealth and rank, often is an attempt to assert or improve social status. But consumers are more reliant on these status signals in certain contexts than in others, as a new study by two marketing professors reveals.
Expensive watches, designer sunglasses and luxury handbags do much more than give the time, shield from the sun or hold keys. Their primary function is to shout to the world: “See how well-off I am!?” Or in more sociological terms, these 'conspicuous goods' signal the wealth and social standing of those who can afford them. While the actual term 'conspicuous consumption' was coined by American economist Thorstein Veblen in 1899, it already existed back in the Middle Ages, when European aristocrats wore furs and gold to set themselves apart from the bourgeois and knights.
Since then, it's not as if the trend has waned. On the contrary, it is a prominent aspect of modern consumer behaviour. The market for personal luxury goods alone is set to keep growing and hit a record €362 billion in 2023, according to. And beyond luxury consumption, premium ('masstige') brands also appeal to a growing base of middle-class consumers who want to stand out from the crowd.
But why do individuals need (or think they need) to signal their social status with these expensive, exclusive goods? In a recent research paper on conspicuous consumption, Perrine Desmichel and Derek D. Rucker explain that these social markers not only convey, but also may boost social status in a hierarchy: when people arrive at a party where they hope to make new friends, or when lunching with colleagues from the trading floor. “Conspicuous consumption was first discussed as a means to signal or gain status (Veblen 1899). However, recent work has suggested that conspicuous consumption is more prevalent and relevant in some contexts than in some others (Cannon and Rucker 2019; Garcia et al. 2019, Scott et al. 2013),” the authors write.
They cite one instance when conspicuous consumption may help climb the social ladder: “Job candidates were more likely to be hired for a well-paying job when wearing a shirt with a conspicuous logo as opposed to a similar shirt with no logo (Nelissen and Meijers 2011).”
Professors Desmichel and Rucker point out that it may also backfire. Recent research has shown that conspicuous consumers can be perceived as shallow, superficial beings, so less likely to be selected for a job that requires strong human connections. “It seems prudent that consumers do not engage in conspicuous consumption at all times or occasions,” they observe. One question naturally follows: When might consumers be more versus less prone to do so?
Why some social hierarchies foster conspicuous consumption
To answer this question, they explored how the base of the social hierarchy contributed to consumers' drive for conspicuous consumption.
The researchers distinguished two types of pecking orders: rooted in dominance or in prestige. In dominance-based hierarchies, members are rewarded for being assertive and extraverted, whereas prestige-based hierarchies encourage individuals to operate more via the willful conference of esteem to others based on skill and talent.
Next, the researchers proposed that social hierarchy base affected conspicuous consumption via an unexplored psychological motivator: social anxiety. Individuals experience social anxiety when they fear being evaluated poorly or seen as inferior, whether this evaluation is real or purely imagined. This state tends to arise in situations marked by aversiveness, unpredictability and competitiveness – characteristic features of dominance-based hierarchies, where aggression and intimidation are used to navigate and ascend the social ladder.
Hence the authors suggest that “dominance-based hierarchies are more likely to foster social anxiety in consumers compared to prestige-based hierarchies.” This social anxiety, in turn, shifts consumers’ preferences toward acquiring and displaying conspicuous goods as a coping mechanism. In other words, they will feel more secure in how they will be evaluated if they are wearing an Armani suit, rather than one purchased in a mundane store.
Luxury sneakers can be a faux pas
These hypotheses were confirmed through five main studies and four supplemental studies, which explored the consumption behaviour of employees in their workplace and tested causal relations.
The researchers also showed that conspicuous goods only buffered social anxiety when this consumption was “normative.” Conversely, if the consumption of conspicuous goods disrupted the social norms, for instance wearing fashion sneakers to a business meeting, then it may bring unwanted attention, no matter how high the price tag on the footwear. “Extremely non-normative consumption can even lead to a loss of social status (Warren and Campbell 2014),” write the authors, citing such a faux pas as wearing counterfeited luxury products.
Interestingly, non-normative conspicuous consumption (of expensive eco-trendy products for example) could actually be attractive in prestige-based hierarchies: as an opportunity to stand out, but in a positive way. The authors cite “teaching a class wearing a T-shirt” as a possible “sign of competence and status among professors.”
Applications for marketing
The findings are relevant to managers who would like to leverage the nature of their targets' social context. Understanding the customer's workplace environment (dominance-based or prestige-based) and their perception of the brand (normative or not) can help salespeople find the right outfit for their clients to wear.
The researchers even suggest that high-end conspicuous brands might benefit from targeting their advertising towards consumers in situations or regions where dominance prevails: professions such as stockbrokers and lawyers, countries marked by high levels of social inequality or authoritarian regimes, where consumers would be expected to have a heightened desire for conspicuous goods.
One intriguing area the researchers point to for future research is the virtual world. Gamers might be willing to pay for digital Prada, Balenciaga or Louis Vuitton outfits for their avatars, especially in highly dominant games of the player-versus-player type.