The Danger of Buying Luxury Goods

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NEW YORK (MainStreet) — Sales of luxury goods are expected to grow by 10% this year compared to 2009, thanks in part to increased demand from younger shoppers, making the luxury goods market one of the big comeback stories of 2010. But one new study should give shoppers pause before they splurge on a big ticket item.

When consumers purchase particularly nice products, they are more likely to buy other luxury items afterward to complement that initial purchase, according to a forthcoming study in the Journal of Marketing Research. So, for example, if you purchase an expensive rosewood bookcase for your living room, you may start to look at the other beat up furniture in that room and feel more inclined to replace them with new pieces of the same quality as the bookcase.

Researchers found that when consumers have just one nice thing in their homes, it seems to clash with other ordinary items, which leads consumers to do one of two things: return the item or buy another luxury item to match. More often than not, they seem to do the latter.

"When we buy something with unique design elements and it doesn't fit, it frustrates us," said Henrik Hagtvedt, a professor at Boston College and co-author of the study, in a press release. "This is because design has intrinsic value. So, rather than returning the item, we actively seek ways to make the item fit, often by making complementary purchases.

“This has financial implications that may have been entirely unforeseen when the consumer made the initial purchase,” Hagtvedt adds.

In one test, subjects were presented with a nice painting in an otherwise bland room. In response, many of the subjects actually changed the wallpaper in the room and upgraded the furniture.

Interestingly, this impulse to buy, buy, buy did not kick in with more ordinary items. For example, when subjects were presented with a toaster in a room that did not match well with it, they were more likely to just return it or give it away. This led the researchers to conclude that consumers are much more sensitive to aesthetic mismatches involving luxury goods rather than non-luxury goods.

Moreover, the researchers found that men and women handle this situation differently. Women were more likely to buy additional luxury goods to complement their initial purchase, while men were more likely to return that initial purchase, although men did sometimes buy more luxury goods as well.

So, when you go window shopping at fancy stores this holiday season, don’t just ask yourself if you need what they’re selling, ask yourself if you need all the other products that come with it.

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