Each year consumers spend billions of dollars on luxury products—relatively expensive products that provide increased prestige without providing additional utilitarian value. If you’ve been on a trip out of the country or at least flown in an international airport, you probably have noticed the increase in luxury retailers in the shopping area.
Several airports around the world have recently begun to seek out luxury retailers to include in their international terminals, including San Francisco, London, Hamad in Qatar, and Dallas/Fort Worth International. A recent post in The Guardian attributed the increase in luxury airport sales to new wealthy travelers, but I have a psychological hunch as to why luxury retailers have seen so much success at the runway.
Why would an American couple be more likely to buy a luxury bottle of wine when traveling to Iceland as opposed to Boston?
My hunch stems from the difference in brand concept between luxury and non-luxury goods. Brand concepts are just the unique associations (e.g., high status) that typically emerge from a particular combination of product features (e.g., high price, expensive-looking design, etc.) and a firm’s attempts to create meanings from these combinations (e.g., “the ultimate driving machine” by BMW).
Luxury goods tend to have brand concepts made up of more abstract associations than non-luxury goods. For instance, it’s more likely for consumers to think of “decadent” and “indulgent” when they see Godiva chocolate as opposed to Hershey’s.
Luxury brands’ abstract concepts allow consumers to perceive greater fit between them and brand extensions into product categories that are much different from the original product category (see Park, Milberg, and Lawson 1991). As an example, it is probably easier to image a Godiva brand of coffee than a Hershey’s brew. In other words, a luxury brand’s abstract associations allow it to transcend product categories.
When we travel across international borders, we similarly transcend cultures, timezones, and comfort zones. It’s much easier to describe an international trip in terms of its abstract associations (e.g., an opportunity to see the world) and a domestic trip in more concrete terms (e.g., to visit family). I argue that the similarity between brand concepts that transcend product categories and trips that traverse international borders increases our desire for luxury goods. This is because luxury brands benefit from the fact that consumers are literally crossing into foreign territories. This act produces a sort of fluency—or easy psychological processing—for consumers who are presented with luxury options.
Do you buy my argument? Why else do you think people might purchase more luxury goods when traveling internationally vs. domestically?
Aaron Barnes is a marketing doctoral student at the University of Illinois and the founder of Dapper Black Box—a monthly subscription service that sends its subscribers high quality men’s accessories exclusively curated from black owned companies. He is as avid learner and tries to match his (sometimes externally imposed) deep thinking with decisive actions that positively impact those around him. Read more about him here and more about Dapper Black Boxhere.
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